Impax buys Teva and Allergan generics for $586 million

Impax has signed a deal to buy a portfolio of generics from Teva and Allergan for $586 million, paving the way for one of the largest pharma M&A deals of the year.

Teva is acquiring Allergan's generics business, formerly known as Actavis, for around $40 billion but is required to sell off certain assets by US competition authorities.

Israel-based Teva said in March that the requirements of the US Federal Trade Commission would delay the merger until this month.

Impax has signed a deal for a portfolio of Teva and Allergan generic drugs, including 15 which are already marketed.

The deal also returns rights to its generic of Janssen's hyperactivity drug, Concerta (methylphenidate), which was previously partnered with Teva.

It also brings one approved generic and two approved strengths of a currently marketed product, which have not yet launched.

California-based Impax will also boost its pipeline with a handful of yet to be approved generics.

The deal will immediately boost revenues and the acquired products generated around $150 million in net sales, and around $100 million in gross profit last year.

According to IMS Health , the pending and development pipeline programs are estimated to have U.S. brand and generic sales of approximately $3.1 billion for the 12 months ending in March 2016.

The purchase price of $586 million for the portfolio of products will be funded with existing cash and $400 million in new fully committed term loans.

Impax noted the deal is also subject to approval by the US Trade Commission. Impax has also adjusted financial guidance, noting that earnings per share for 2015 will be around 20% higher than the prior year, as opposed to the 10% previously expected.

CEO Fred Wilkinson said that the deal is also expected to offset a revenue decline due to recent competition to its diclofenac sodium gel and metaxalone products.