Bayer gets FTC approval to buy Teva animal-drug division

Posted: January 05, 2013

Bayer HealthCare said Thursday that it had received regulatory clearance to complete its $145 million acquisition of the animal-drug division of Teva Pharmaceutical Industries Ltd.

Teva is based in Israel and has several facilities in the Philadelphia region, but the animal-products factory is in St. Joseph, Mo. The factory and about 300 employees will be transfered to Bayer.

Bayer AG is based in Leverkusen, Germany, and its animal-health division has headquarters in Shawnee Mission, Kan., a suburb of Kansas City. Bayer, which also has facilities in New Jersey and Pennsylvania, said Thursday that the Federal Trade Commission had approved the sale.

"This acquisition fits nicely with our strategic goals," Joerg Reinhardt, chief executive officer of Bayer HealthCare, said in a statement. "It allows us to strengthen and broaden our range of animal care solutions in the U.S. market."

Unlike human products, drugs for dogs, cats, horses, and other animals produced by pharmaceutical companies are rarely constrained on price by insurance companies or governments. People tend to splurge on their pets, and even on livestock, which generates revenue for drugmakers. That is part of why Pfizer Inc. plans to offer up to 20 percent of its animal-health division as separate stock under the company name Zoetis Inc.

Pfizer had $1 billion in revenue from animal health in the third quarter of 2012, according to its filing with the Securities and Exchange Commission.

Conversely, Teva's new strategic goals are to pare down its wide range of facilities, products, and areas of focus.

Jeremy Levin took over as Teva CEO on May 9, after having been named to the position Jan. 1, 2012, and the company has been trying to refocus. It recently said it would cease planning a $300 million Northeast Philadelphia facility. Teva has its Americas headquarters in Montgomery County.

When the animal-health deal was announced in September, Teva said it would get $60 million up front and then could get up to $85 million more if the animal products met manufacturing and sales targets.

"We are committed to making disciplined decisions that focus on our core businesses and strategically position the company as setting a new standard in both generic and branded medicines," Itzhak Krinsky, Teva executive vice president and head of business development, said in a statement in September when the deal was announced. "As part of our overall strategy to refine our global footprint, we will continue to leverage our product portfolio and R&D efforts while selling or out-licensing assets that no longer fit within the scope of our business."


Contact David Sell

at dsell@phillynews.com or 215-854-4506. Read his blog at www.philly.com/ phillypharma and on Twitter @phillypharma.

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