Warner Chilcott’s focus on women's healthcare, dermatology and urology has produced an extensive product range of oral contraceptives Estrostep and Ovcon, as well as Doryx, a treatment for acne. Actavis is most widely known for its pain medication Percocet and it also manufactures generic birth control pills.
According to a spokesperson for the New Jersey based Actavis, reportedly in contact with Tokyo International, the deal is an all stock offering with Warner Chilcott shareholders receiving 0.16 shares in Actavis for each of their shares of Warner Chilcott.
The resulting $20.08 per share has a premium of 4.5 percent over the pre offer closing share price. Actavis will also take on over $3 billion of Warner Chilcott’s debt, bringing the overall value of the transaction to over $8.5 billion.
“This really is the culmination of the Actavis strategy of building a global specialty pharmaceuticals company,” according to Paul Bisaro, Actavis’ CEO on a conference call with analysts. CFO Todd Joyce added on the same call that Actavis will now be the number one pharmaceutical company for women’s health.
“The combination is commercially and financially compelling, and reshapes the specialty pharmaceutical universe by creating a powerful global competitor,” he added. “It creates a company with an exceptionally strong balance sheet, coupled with a favorable tax structure to support future growth.”
Actavis currently develops, manufactures and markets generic, branded generic, legacy brands, and over-the-counter products in more than 60 countries. The combined company will hold an even broader portfolio of specialty products for commercialization in key markets outside of North America, says Bisaro.
In addition to Actavis’ current portfolio, it will have one marketed dermatology product, an R&D portfolio of more than 25 experimental therapies in various stages of development, including 15 candidates in women's health; and the ability to grow through additional in-licensing opportunities within those therapeutic categories.
Actavis and Warner Chilcott combined will have annual revenues of around $11 billion, with Actavis also having products for the treatment of dermatology and gastroenterology as well as women’s health products. Tokyo International apparently commented that there could also be a tax break worth $4 per share available to Actavis, as Warner Chilcott is incorporated in Ireland.
Warner Chilcott has disclosed over a year ago that is was seeking suitors; however a source at that time is believed to have told Tokyo International that they ended the process and decided on a special dividend and share buyback program, as they felt that would be more beneficial to shareholders.