Pharma BD Deal Intelligence
Collapse: Mylan's $4 billion stock-for-stock bid for King Pharmaceuticals fell apart in February 2005 after King's product-return-expense restatement and the FDA pushed nebivolol's PDUFA to May 31, 2005 — Carl Icahn called the deal 'stupid' and claimed vindication.
Outcome grade pending — assessed 5 years post-close.
Full analysis, sources & comparables →King CEO Brian Markison: "the combination of these two companies' strong and complementary business models, we will create the nation's leading diversified…
"Mylan Laboratories Inc. and King Pharmaceuticals, Inc. today announced that the companies have mutually agreed to terminate the agreement... Following…
Icahn called the collapse 'a victory for all Mylan shareholders and a victory for shareholder activism in general,' having previously labeled the deal 'stupid'…
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Stock-for-stock; 0.9 Mylan shares per King share; $16.659/King share; deal terminated February 2005
Hypertension is chronically elevated blood pressure that drives risk of stroke, MI, heart failure and renal disease. In 2004, the US cardiovascular market was dominated by ACE inhibitors, ARBs, beta-blockers and statins, with branded blockbusters facing imminent loss of exclusivity.
King Pharmaceuticals' anchor product was Altace (ramipril), an ACE inhibitor generating roughly $450M/year and licensed from Aventis, which placed it head-to-head against generic ACE inhibitors (lisinopril, enalapril) and the rising ARB class led by Merck's Cozaar/Hyzaar (losartan), Novartis's Diovan (valsartan), and BMS/Sanofi's Avapro (irbesartan). Mylan's strategic logic was to bolt King's branded cardiovascular salesforce onto Mylan's own pipeline candidate nebivolol (a beta-blocker). The merger collapsed in February 2005 after King disclosed restatements for 2002-2003 and H1 2004 stemming from product-return expense recognition flaws, and after Carl Icahn's High River accumulated ~9% of Mylan and launched a competing $20/share bid, calling the deal 'an egregious mistake' and 'too expensive for Mylan and too dilutive for Mylan shareholders.' The collapse left Altace exposed to its 2007 patent cliff and pushed Mylan back toward generics-only strategy until the 2007 Merck KGaA generics acquisition. Source: http://www.pharmatimes.com/news/mylanking_terminate_merger_plans_998619
| Deal | Year | Value | Outcome |
|---|---|---|---|
| Mylan Laboratories Inc. / King Pharmaceuticals Inc. (this deal) | 2004 | $4.0B | — |
| Mylan Laboratories Inc. / Merck Generics (Merck KGaA) | 2007 | $6.7B | 81 |
| Mylan Laboratories Inc. / Matrix Laboratories Limited | 2006 | $736M | 66 |
| Mylan Laboratories Inc. / Matrix Laboratories Limited | 2005 | $736M | 39 |
| UCB SA / Celltech Group plc | 2004 | $2.7B | 92 |
| Yamanouchi Pharmaceutical / Fujisawa Pharmaceutical Co. Ltd. | 2004 | $7.6B | 84 |
| Abbott Laboratories / TheraSense Inc. | 2004 | $1.2B | 81 |