Galen's Generic Gamble
Galen's $359 million acquisition of Pfizer's women's health portfolio fits in well with the group's strategy to date. But the structure of the deal also highlights Galen's increasing exposure to generic competition.
You may also be interested in...
After this summer's failed merger talks between the two companies, Galen's three-pronged deal with US-based generics play Barr Laboratories might be the next best thing for Galen investors. At little cost, the deal removes much of the risk associated with the Northern-Irish company's legal battles. And even though agreements between branded players and their generics competitors often raise eyebrows at antitrust authorities, this deal's structure and focus on the heavily genericized oral contraceptives market may get it past the regulators.
The recent meltdown at Akzo Nobel's Pharma unit was caused by a perfect storm of genericization, macroeconomic gloom, pipeline delays and product underperformance. But Akzo Pharma hopes that by beefing up R&D and cutting costs through restructuring, it can return to growth in 2005.
In buying rights to market Lilly's Sarafem, Galen figures it can compete with Pfizer and GSK by detailing where they don't--Ob/Gyns. And in growing its valuation, Galen aims to compete with other public European small pharmas by focusing on the US.