Small, but perfectly strategic

Shiri Habib-Valdhorn

Teva's acquisition of Theramex is part of its plan to raise its profile in women's health.

The acquisition of Ratiopharm has been completed, and Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) is continuing its M&A tradition and buying another European company. This time, the acquisition is less costly Teva spent $5 billion to buy Ratiopharm, whereas here the amount is €265 million ($366 million), but in this case too it is a matter of a strategic acquisition for Teva.

The company being acquired is Theramex, a unit of Merck-Serono, of the Merck KGaA group, in a move designed to deepen and broaden Teva's activity in women's healthcare.

Teva entered the women's healthcare field when it bought Barr Pharmaceuticals in 2008, and the expectations at the time were high: the company spoke of a revenue target of $1 billion annually from this field of activity. The strategic plan that Teva published at the beginning of this year includes the ambitious target of 17% of branded revenue (original drugs) coming from women's healthcare products in 2015, implying sales of $1.56 billion. However, at present the rate of sales is a long way below that, amounting to $82 million in the second quarter.

The company being acquired has a range of women's healthcare offerings, among them drugs for gynecological treatments, osteoporosis, and symptoms caused by the menopause. In 2009, its sales totaled €100 million, mostly in Italy and France. As part of the sale agreement, Teva is also buying the distribution rights to Theramex products in several countries, including Spain and Brazil. Theramex plans to enter the contraceptives market, and in its product pipeline is a contraceptive pill based on natural estrogens that recently completed advanced clinical trials and is awaiting marketing approval in Europe.

Published by Globes [online], Israel business news - - on October 28, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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