Mylan Inc. / Abbott Laboratories (non-U.S. developed-markets specialty and branded generics business)

Diversified non-U.S. specialty and branded generics (cardio/metabolic, GI, anti-infective, CNS/pain, women's/men's health)

$135.0B Global generics market ~$135B (2015 est.)

Disease Overview

This transaction is a multi-therapeutic-area branded-generics portfolio rather than a single-disease deal. The acquired business comprised 100+ specialty and branded generic products sold across non-U.S. developed markets (Europe, Japan, Canada, Australia, New Zealand) spanning cardiology/metabolic, gastroenterology, anti-infective, CNS/pain, and women's and men's health. Branded generics in developed ex-U.S. markets compete on physician relationships, formulary placement, and brand trust as much as on price.

Competitive Landscape

The 2014 global generics market was estimated at ~$129B-$135B and growing ~9% annually, with developed-market branded generics increasingly contested by Teva (post-Cephalon, world's largest generics maker), Novartis/Sandoz, Mylan, Actavis (which had just absorbed Forest Labs and would acquire Allergan), Sun Pharma (then merging with Ranbaxy), and Aspen Pharmacare in select EU/EM geographies. Mylan's acquisition of Abbott's non-U.S. specialty/branded generics business added a portfolio of 100+ products and ~$1.9B in annualized revenue, expanded Mylan's commercial footprint in Europe, Japan, Canada and Australia, and created pro-forma 2014 sales of ~$10B with EBITDA of ~$3B. Strategically, the deal was structured as a Netherlands-domiciled tax inversion that lowered Mylan's tax rate to ~20-21% (declining toward the high teens), giving Mylan capital-allocation parity with Teva and Actavis, both of which were also pursuing scale-driven roll-ups. BioPharma Dive and FierceBiotech framed it as part of two simultaneous trends: diversified players (Abbott) divesting non-core assets to focus on devices/diagnostics, and generics players pursuing inversion-enabled scale.