Dublin-based Actavis has completed its acquisition of Forest Laboratories in a cash and equity transaction valued at approximately $28 billion. The combination creates a specialty pharmaceutical company with annual revenues of more than $15 billion anticipated for 2015.
Paul Bisaro, formerly chairman and CEO of Actavis, has been named executive chairman of Actavis. Brent Saunders, formerly CEO and president of Forest, has been named CEO and president of Actavis. Robert Stewart, formerly president, global operations for Actavis, has been named chief operating officer.
"The combination of Actavis and Forest creates an innovative new model for success in the global specialty pharmaceutical industry, built to compete within today's evolving healthcare landscape," said Saunders, Actavis CEO and president. "Our business model is driven by a broad portfolio of strong brand, generic and OTC products, a commitment to development-focused, results oriented research and development and the size and scale needed to efficiently and cost-effectively meet the needs of our global customer base.”
“The new Actavis is uniquely positioned to deliver exceptional long-term financial performance and expand access to pharmaceutical products for patients around the world,” he added, “marketing more than 35 products across seven therapeutic market segments and maintaining blockbuster product franchises in five therapeutic categories, as well as a global generics business, with operations in approximately 60 countries.”
“With the acquisition now complete, we will immediately begin executing on our comprehensive integration plans to ensure we are leveraging our strengthened global organization to generate sustainable organic earnings growth from our newly expanded base," Saunders said.
Actavis expects the transaction to generate double-digit accretion in 2015 and 2016, including $1 billion in operating and tax synergies to be realized within three years following the close. Actavis expects to generate strong operating cash flow in excess of $4 billion on a pro forma basis for 2015.
The company said the combination creates a new breed of specialty pharmaceutical company, with size and scale, a balanced offering of strong brands and generics, a focus on strategic, lower-risk drug development and a flexible, scalable business model that permits it to adapt quickly to ever-changing industry dynamics and drive sustainable, long-term organic growth.
On a pro forma combined basis for full year 2014, Actavis' brand pharmaceutical business now includes a $2 billion revenue CNS franchise; Gastroenterology (GI) and Women's Health franchises valued at $1 billion in revenue each; a Cardiovascular franchise that generates $500 million in revenue; and Urology and Dermatology/Established Brand franchises approaching $500 million a year in revenue each; as well as emerging and sustainable portfolios in the Infectious Disease and Respiratory categories.
The combined company's North American sales force has strength among primary care physicians, gastroenterologists, psychiatrists, cardiologists, neurologists and infectious disease specialists, in addition to its focus on OBGyns, urologists, gastroenterologists and dermatologists. The sales force is strongly positioned to leverage select products in the legacy Actavis Specialty Brands portfolio to the broader primary care physician base in the U.S.
Actavis said it now has one of the strongest development-focused R&D organizations in the pharmaceutical industry, with an emphasis on strategic, innovative development of important durable products that will drive long-term value, and on being the partner of choice for new and existing development collaborations. The transaction strengthens Actavis' specialty brands pipeline, with more than 25 products in the near- or mid-term stage of development. It now includes 16 product candidates at phase III or NDA stages of development, including treatments for Alzheimer's disease, cardiovascular disease, infectious disease, Schizophrenia and bipolar disorders, COPD and an array of Women's Health conditions. The pending acquisition of Furiex Pharmaceuticals is expected to further strengthen the pipeline.
Actavis' generic product development organization has approximately 220 Abbreviated New Drug Applications (ANDAs) currently filed in the U.S., 60 of which are believed to be confirmed as new first-to-file applications, and more than 750 filings across the globe.