- Teva Pharmaceuticals on Wednesday signaled the closing of its $40.5 billion acquisition of Allergan's generics portfolio was imminent, putting out rosy revenue projections for the next few years at the same time.
- The acquisition of Allergan's generics unit has now dragged on for over a year, weighed down by regulators' antitrust concerns. Since then, Teva has sold off hundreds of millions of assets to comply with Federal Trade Commission and European Commission requirements.
- The companies expect the deal to close within weeks, but to be safe, they announced further tweaks to the deal Wednesday morning: the new deadline to complete the merger is Oct 26, rather than the original July 26 deadline, and two generics are now off the table, reducing the deal's value by $221 million.
"We expect the closing of the Actavis Generics deal at any time now," said Teva CEO Erez Vigodan to a conference of investors early Wednesday morning, adding of course the deal was "pending final approval of the commissioners of the U.S. FTC."
With one year having passed since Teva's acquisition of Allergan's generics portfolio (Actavis) was first announced, stakeholders are likely itching for the deal to close.
Teva and Allergan have worked hard to get the deal approved by regulators. In the past month alone, Teva has made deals to sell off at least 65 generic products to companies like Mayne Pharma, Dr. Reddy's and Impax Laboratories. All three of the divestitures—potentially worth some $1.8 billion—remain pending closure of the Allergan transaction.
But seeing the light at the end of the tunnel, Teva released a preliminary financial outlook that illustrates the post-deal company's prospects.
"In spite of the fact that we do not yet have full visibility into the Activis Generics numbers and in particular certain pipeline information we have decided to provide you today with the best estimates of the financial outlook for Teva in 2016 to 2019," said Vigodan. The company also promised to update the outlook following the close of the deal.
Teva anticipates its revenues will rise 41% in three years, from 2015's $19.7 billion to a high-end estimate of $27.8 billion by 2019. Similarly, the company expects its operating income will grow by 44% to at least $10 billion during that time frame.
In the more immediate future, Teva said it expected the generics deal would contribute $1.9 billion to 2017 net income, principally due to lower tax and finance expenses than it had previously estimated.
The rosy picture underscores Teva's confidence the deal will gain regulatory approval in the U.S., despite blowing past prior predictions of imminent approval.
The FTC has yet to release an official statement regarding the acquisition deal's status.