Actavis in talks to buy Ireland’s Warner Chilcott

Actavis Inc, the largest generic drug maker in the US by market value, today said that it is in ''early stage discussions'' to buy Irish specialty pharmaceutical company Warner Chilcott Plc.

The talks come a few weeks after Actavis put on hold merger talks with Canada's Valeant Pharmaceuticals International Inc after both companies differed  on the size of the cash premium to be paid in the over $13 billion all stock acquisition of Actavis.(See: Valeant Pharma's $13-bn Actavis deal put on hold)

''Actavis has entered into early stage discussions with Warner Chilcott Plc regarding a potential combination of the two companies,'' New Jersey-based Actavis today said in a statement, which was issued in response to a Bloomberg yesterday report on the potential merger talks.

Dublin-based Warner Chilcott issued a similar statement and both companies added that no agreement had been reached and they would not comment further on the talks.

Warner Chilcott had last year entered talks to sell itself to German pharmaceutical giant Bayer and private equity groups, but pulled out as it was unable to secure its expected price of $25 a share. (See: Warner Chilcott scraps sale plans; to pay $1 billion dividend)

Since then, its stock had fallen by 30 per cent only to see it rise today by 23 per cent to $18.46, adding around $750 million to its market value after Bloomberg's report.

The company's market value rose from $3.76 billion on Thursday to about $4.51 billion on Friday.

In April 2012, Warner Chilcott, which makes women's healthcare, dermatology, gastroenterology and urology products, had announced plans to explore strategic options, including a possible sale and had hired Goldman Sachs Group as its financial adviser.

Reuters had then reported that the drug maker received buyout offers from three potential suitors, including both private equity and industry buyers, but their offers did not meet with its expectations of around $25 a share.

With products that include well-known oral contraceptives Loestrin 24 FE, Femcon FE and Ovcon, Warner Chilcott was taken private in a $2.1 billion deal in 2005 by a consortium that included Thomas Lee Partners, Bain Capital, JPMorgan Chase & Co and Credit Suisse.

It returned as a public company in 2007, but Credit Suisse sold its stake in 2010, while the others still own about 30 per cent.

Since being spun out of Warner-Lambert in 1996, Warner Chilcott has grown through a series of acquisitions and divestitures, from a small seller of undifferentiated products to a fully integrated pharmaceutical company with a broad portfolio of leading branded products.

Its largest acquisition was carried out in 2009, when it purchased Procter & Gamble's global prescription drug business for about $3.1 billion.

Warner Chilcott focuses on women's healthcare, gastroenterology, urology and dermatology segments of the branded pharmaceuticals market, primarily in North America.

Apart from well-known oral contraceptives, the Nasdaq-listed company also makes multiple treatments for menopause symptoms such as hot flashes and vaginal dryness, including Femhrt, Femring and Estrace.

It also sells Doryx - a skin product used to treat acne and Pyridium - for pain from urinary tract infections, Taclonex ointment for psoriasis and Moisturel skin cleansers and therapeutic creams.

Other Warner Chilcott products include the ulcerative colitis treatment Asacol, which is its top-selling drug, and Delzicol, an ulcerative colitis medication that was approved in February. The company also sells oral contraceptives including Lo Loestrin FE.

The company's sales declined over the last two years and analysts expect the company to report revenues of $2.34 billion for fiscal 2013.

Warner Chilcott has manufacturing facilities in Puerto Rico, Northern Ireland and Germany.

Actavis, the world's third-largest generic drugmaker was established in January after New Jersey-based Watson Pharmaceuticals acquired it for around $5.60 billion, in order to expand in Europe.

It develops, manufactures and markets generic, branded generic, legacy brands and over-the-counter (OTC) products in more than 60 countries.

The company is ranked among the top 3 in 12 global markets, the top 5 in 16 global markets, and in the top 10 in 33 global markets.

Actavis has one of the broadest product portfolios and strongest pipelines in the generics industry. It has more than 750 molecules in 1,700 dosage combinations marketed globally through operations in more than 60 countries and around 40 per cent of its generic drug revenue comes from outside the US.

The company is in leading market positions in key established commercial markets and emerging markets in Central and Eastern Europe, Russia, the UK, France and Australia.

It has 30 manufacturing and distribution facilities around the world, including in China, India, Indonesia and Singapore.

Actavis Specialty Brands, formerly known as the Global Brands business, markets more than 40 brand pharmaceutical products, primarily in the US.

Actavis Pharma also develops and out-licenses generic pharmaceutical products outside the US through its Medis third-party business, the world's largest generic pharmaceutical out-licensing business. Medis has more than 300 customers globally, and offers a broad portfolio of more than 200 products.

Actavis, the maker of the generic version of Pfizer's blockbuster cholesterol busting drug Lipitor, has a market value of $12.9 billion and generated revenue of $5.9 billion last year.