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Par Pharmaceutical buys rival Anchen

by Lou Whiteman  |  Published August 24, 2011 at 11:16 AM
Par Pharmaceutical Cos. said Wednesday, Aug. 24, that it will buy privately held rival Anchen Pharmaceuticals Inc. for $410 million in cash to extend its portfolio of generic products.

The deal is part of a rush by generic drug manufacturers to boost their production capacity and research arms ahead of a coming wave of drug patent expirations. Teva Pharmaceutical Industries Ltd. this year has announced plans to buy Cephalon Inc. for $6.8 billion and Taiyo Pharmaceutical Industry Co. Ltd. for $943 million, while Watson Pharmaceuticals Inc. in May said it would buy Specifar Pharmaceuticals SA for $561.80 million.

Anchen of Irvine, Calif., has five commercialized products and hopes to launch between eight and 10 additional generic drugs over the next two years.

Woodcliff Lake, N.J.-based Par, a $1.01 billion-sales manufacturer of generic and branded drugs, said the deal would open up new avenues for growth.

"This transaction accelerates the expansion of Par's research and development infrastructure and reinforces our strategy to provide long-term sustainable growth," company chairman and CEO Patrick G. LePore said in a statement. "Anchen has an excellent development track record and robust product pipeline, which, when combined with Par's existing capabilities and pipeline, more than doubles our product opportunities."

Anchen employs 218 from its 72,000-square-foot manufacturing and warehouse facility.

Par plans to finance the deal with cash on hand and a $350 million term loan. The company had $345.7 million in cash and no debt on its balance sheet as of June 30.

This is Par's second deal this year, following its May purchase of India-based generics developer Edict Pharmaceuticals Pvt. Ltd. for $37.6 million.

Shares of Par opened up 6%, or $1.80, to $31.01.

Par was advised by JKF Advisors LLC, Orrick, Herrington & Sutcliffe LLP, Arent Fox LLP and PricewaterhouseCoopers LLP. The company received a fairness opinion from J.P. Morgan. Anchen was advised by Jefferies & Co. and Winston & Strawn LLP.

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Tags: Anchen Pharmaceuticals Inc. | Arent Fox LLP | branded generics | Cephalon Inc. | Edict Pharmaceuticals Pvt. Ltd. | emerging market | generic drugs | J.P. Morgan | Jefferies & Co. | mergers and acquisitions | Orrick Herrington & Sutcliffe LLP | Par Pharmaceutical Cos. | pharma | pharmaceuticals | PricewaterhouseCoopers LLP | Taiyo Pharmaceutical Industry Co. Ltd. | Teva Pharmaceutical Industries Ltd. | Watson Pharmaceuticals Inc. | Winston & Strawn LLP

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