|
Barr Labs to buy Duramed
|
 |
June 29, 2001: 2:19 p.m. ET
Contraceptive makers set stock swap merger valued at $589M
|
NEW YORK (CNNfn) - Drug maker Barr Laboratories Inc. agreed Friday to acquire Duramed Pharmaceuticals Inc. for $589 million in stock in an effort to boost its female health-care and oral contraceptive portfolio.
Barr (BRL: down $2.30 to $69.14, Research, Estimates) said it will swap one share of its stock for every 3.9032 shares of Duramed. Based on Thursday closing prices, the deal is worth about $589 million.
The combined company will have revenues of $700 million in 2002, Barr said. The deal is expected to be neutral to earnings in 2002 and accretive after that.
Elliot Wilbur, drug analyst with CIBC World Markets, said he believed Barr was getting a "rather attractive price," paying at the lower end of Duramed's valuation range.
Both Barr and Duramed offer oral contraceptives and female health-care products. Barr said Duramed will contribute oral contraceptives, such as its Apri and Aviane products, to Barr's existing line of products. Duramed (DRMD: up $0.30 to $17.20, Research, Estimates) also sells hormone-replacement therapy products such as Cenestin.
Duramed said in May that it had four generic drugs awaiting approval by the U.S. Food and Drug Administration, and expected to submit eight additional copycat medicines to the FDA in 2001.
"Coincidentally, many of the oral contraceptives we worked on first were those Duramed planned to work on later, and vice versa," Barr Chairman and CEO Bruce Downey told CNNfn's The Money Gang. "So collectively we'll have a complete line of oral contraceptives much faster than we could achieve independently."
"Together, in very short order, we'll have the broadest line of oral contraceptives of any company brand or generic," Downey added.
Downey also said Barr is developing the brand-name drug side of its business to complement the generic side.
"The company right now is obviously focused on generics but they have articulated a pretty aggressive strategy in targeting higher-margin proprietary products," Wilbur said. "I don't know if there's a right target mix, but I think as a proportion of total revenue, somewhere in excess of 30 percent of Barr's revenue could come from propriety products sometime in the next few years." 
-- from staff and wire reports
|
|
|
|
|
|
Barr Labs
Duramed
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
