Actavis Completes $28 Billion Acquisition of Forest Laboratories

Actavis plc has completed the acquisition of Forest Laboratories, Inc. in a cash and equity transaction valued at approximately $28 billion. The combination creates a specialty pharmaceutical company with annual revenues of more than $15 billion anticipated for 2015.

In conjunction with the close of the acquisition, Paul Bisaro, formerly chairman and CEO of Actavis, has been named to the position of executive chairman of Actavis. Brent Saunders, formerly CEO and president of Forest, has been named CEO and president of Actavis. Robert Stewart , formerly president, global operations for Actavis, has been named chief operating officer. Bill Meury , formerly executive vice president, sales and marketing for Forest, has been named executive vice president commercial, North American Brands, and David Buchen , formerly Actavis’ chief legal officer, has been named executive vice president commercial, North American Generics and International.

In addition to Saunders, the new members of the Actavis board are Nesli Basgoz, M.D., and Christopher J. Coughlin, both of whom are former members of the Forest board. Current Actavis board members Paul M. Bisaro, James H. Bloem, Christopher W. Bodine,Tamar D. Howson, John A. King, Catherine M. Klema, Jiri Michal, Patrick J. O’Sullivan, Ronald R. Taylor, Andrew L. Turner, and Fred G. Weiss will continue as members of the new Actavis board. The board changes are effective until Actavis’ next annual meeting of shareholders in May 2015. Actavis also announced that Sigurdur Olafsson has resigned from the company’s board of directors. The new board will have several standing committees, including Audit and Compliance, Compensation, Nominating and Corporate Governance, and Operations and Innovation.

​Actavis continues to expect the transaction to generate double-digit accretion in 2015 and 2016, including approximately $1 billion in operating and tax synergies to be realized within three years following the close. These synergies exclude any additional revenue or manufacturing synergies and are in addition to standalone synergies announced publicly by Forest as part of its Project Rejuvenate and acquisition of Aptalis. Actavis further expects to generate strong operating cash flow in excess of $4 billion on a pro forma basis for 2015.

On a pro forma combined basis for full year 2014, Actavis’ brand pharmaceutical business now includes: an approximately $2 billion revenue central nervous system franchise; gastroenterology (GI) and women’s health franchises valued at approximately $1 billion in revenue each; a cardiovascular franchise that generates approximately $500 million in revenue; and urology and dermatology/ established brand franchises approaching $500 million a year in revenue each; as well as emerging and sustainable portfolios in the infectious disease and respiratory therapeutic categories.

The transaction strengthens Actavis’ specialty brands pipeline, with more than 25 products in the near- or mid-term stage of development. Actavis’ innovative specialty brands pipeline now includes 16 product candidates at the Phase III or new drug application stages of development. The pending acquisition of Furiex Pharmaceuticals, Inc. is expected to further strengthen the pipeline, with Furiex’s lead development GI product eluxadoline. The combined company also has 220 abbreviated new drug applications currently filed in the United States, 60 of which are believed to be confirmed as new first-to-file applications, and more than 750 filings on a global basis. 

Source: Actavis (Forest Laboratories closing) and Actavis (board appointments)

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