Teva Pharmaceuticals Industries Ltd. expects the acquisition of generic drug manufacturer Allergan to be completed by June. The Israel-based drug maker will hold the reigns of Allergan which is worth $40.5 billion.
Teva expects the deal to be finished by the first quarter of this year but an analyst said the negotiations are tougher than expected. This delay will probably miss the initial launch of the drug Crestor, a cholesterol medication, on May 2 which will shift the per-share earnings of 11 cents to Allergan as per The Wall Street Journal.
Teva, however, is confident that it has made significant progress towards completing the deal. The June deadline will include the timetable to complete its clearance from the US Federal Trade Commission. According to Reuters, it has already received its regulatory approval from the European Commission for its acquisition which will be subjected to divestitures.
According to analyst Sanford C. Bernstein, the FTC is in critical point because it is still waiting for the input from the US Food and Drug Administration and this process will take ample amounts of time. He added that the FDA must be asking for more divestitures which Teva still negotiates. This will take about three to five weeks. As reported by Haaretz, Allergan will impose a $1 billion penalty if Teva fails to get a regulatory approval.
This latest acquisition of Teva is just a part of the wave of consolidation in the drug industry. The combination of Allergan and Teva will now increase their dominance in sales and manufacturing department. This will further increase the scale in the competitive generic drug market and the chance to further lower the cost which will help it cope with big patent expirations.
Teva has also agreed to buy Actavis Generics in July for a cash and stock deal. This will further lock the Israel company's position straight into the top ranks of global drug makers.
