Valeant Pharmaceuticals eyes Swedish specialty drug maker Meda

Canada's Valeant Pharmaceuticals International Inc has made a takeover approach for Swedish specialty drug maker Meda AB, The Wall Street Journal today reported, citing people familiar with the matter.

Meda, based in Solna, Sweden, has a market value of about $3.4 billion based on its last closing stock price. If the deal materialises, it could be worth over $4 billion, the report said.

Both companies are familiar with each other with Valeant having sold its European drugs business to Meda in August 2008 for $425 million. In June 2011, Valeant also acquired the rights to sell two of Meda's dermatology drugs, Elidel and Xerese in the US and Canada.

Meda focuses on five key therapy areas, respiratory, cardiology, dermatology, pain and inflammation, and CNS. In 2010, products in these therapy areas generated about 80 per cent of its total sales. The gastroenterology area has now become significant following the acquisition of Alaven in 2010.

It is the world's 50th largest pharmaceutical company with operations in 50 countries and products sold in more than 120 countries. The company posted net income of SEK 1.4 billion ($214 million) on revenues of SEK 11.6 billion ($1.75 billion) in 2010.

The sale of Meda would require the blessing of the company's largest shareholder, Swedish shipping magnates, the Olsson family, which holds a 22.5-per cent stake in Meda.