Big Pharma vs. Indian Generics, The Plot Thickens (PFE, TEVA, MYL)
Pfizer Inc. (NYSE: PFE) is sort of stuck between a rock and a hard place. If you thought that Big Pharma drug companies being under fire because of generic drugs, the issues may about to be getting much more convoluted. There are reports that Pfizer may try to make an acquisition offer for a majority stake in the Indian generic giant Ranbaxy. This would be a counter-bid or counter-fight since Japanese drug maker Daiichi Sankyo’s recent plan to spend up to $4.6 Billion to acquire a majority stake in Ranbaxy.
What is interesting is that Ranbaxy is India’s biggest drug maker. To make matter more complicated, Ranbaxy has been involved in many cases globally over launching generic versions before Pfizer’s patents expire on Lipitor as a cholesterol treatment. Ranbaxy may launch a generic version of Pfizer’s Lipitor as soon as 2010, although this will vary greatly depending on which country it pertains to.
The fighting between generic drug makers and name brand makers is an endless one. Teva Pharmaceutical industries (NASDAQ: TEVA) recently saw a huge hit to its stock because of a generic MS drug out of Mylan Labs (NYSE: MYL) of Teva’s blockbuster Copaxone. Guess where the generic is going to be made….. Mylan teamed with NATCO Pharma, out of India. The irony here is that Teva’s lion share of revenues come from generic drugs that it makes of other Big Pharma labels. The sword cuts both ways.
The wars with generics and Big Pharma makers are only going to get worse and are only going to get more complicated. Throw in the biotech angle and the recent moves where Big Pharma companies have been acquiring biotechs for their prized pipelines. Stay tuned.
Jon Ogg
June 13, 2008
