US drugmaker Cephalon Inc is planning to expand into generic drug business to diversify its product line. With an increase in its shares by 1.5 percent, the company is looking to expand internationally. Cephalon announced that they would be buying Mepha AG for about $590 million for expansion.
Mepha AG, the Swiss generic drugmaker is owned by Germany’s Merckle family and markets above 120 products in 50 countries. Mepha had sales of about $377 million in 2009 and Cephalon is looking to double the size of its international business with the deal.
Cephalon gained popularity with its sleep disorder drug Provigil. Nuvigil, its successor drug, also features in its product line along with pain product Fentora and cancer drug Treanda. Mepha features multiple products including Diclofenac for pain, as gel and patch. The merger move by Cephalon denotes a departure from its usual mergers and acquisitions strategy.
Generic drugmakers are being aimed at by pharmaceutical companies around the world to help them make up for the declining revenue from bigger brands. Cephalon is expecting to close the deal in the next 10 to 12 weeks and update the forecast in the quarterly reports on Feb 11. It expects to achieve substantial results from the merger that will help it use the increased global reach to expand its products sales.
The Mepha acquisition would provide a wide range of products to Cephalon that include treatments for bacterial infections, schizophrenia, anemia, pain, allergies, heart disease, hypertension, respiratory tract infections, malaria, cough, ulcers and mood and anxiety disorders.
Cephalon is looking to make other acquisitions too and aims to launch 50 new products in the next four years with 150 commercial launches of products varying in dosage and location.
