Dive Brief:
- Teva Pharmaceuticals will pay Allergan $500 million to acquire the latter's wholesale distributor, Anda, the companies announced Wednesday. Teva will now own three distribution centers in Olive Branch, Mississippi; Weston, Florida; and Groveport, Ohio.
- The acquisition of Anda will allow Teva to consolidate its supply chain in the U.S., since Anda is the fourth largest generics distributor in the country. The deal was reached a day after Teva completed its $40.5 billion acquisition of Allergan's generics portfolio.
- Anda distributes products from over 300 brand and generic manufacturers directly to pharmacies, healthcare facilities, clinics and offices.
Dive Insight:
Although the deal is officially separate from the Teva-Allergan generics deal, the sale is linked to Teva's efforts to exercise greater control over the generics market.
U.S. regulators delayed approving the larger deal for a year over concerns of antitrust violations, but finally cleared it under the condition Teva divest 79 drugs and provide long-term contracts for 15 active pharmaceutical ingredients.
Now, with three new distribution centers in the U.S. and an expanded generics portfolio, Teva should be able to move more of its manufactured products directly to the wholesaler at lower cost.
"Teva is one of Anda's most important suppliers, enhancing the significant strategic fit of Anda within Teva's business," said Brent Saunders, president and CEO of Allergan.
In an FAQ with investors, Allergan said it had negotiated distribution agreements with Teva so as to minimize material impact from the sale.
Asked why Anda had not been sold as part of the original generics deal with Teva, the company responded: "As a result of the short timing from negotiation to announcement of the original Teva generics agreement, we focused initially on completing the Actavis global generics business sale to Teva."
Unlike the previous deal, however, Allergan claims it expects the Anda acquisition to clear U.S. regulators by the end of the year.