Inc. and Specifar Pharmaceuticals S.A. today jointly announced that
Watson has acquired the privately-held multinational generic pharmaceutical
developer, manufacturer and marketer for EUR 400 million ($562 million) in cash
and certain contingent consideration. As a result of the acquisition, Watson
gains a leading generic product development company that develops and
out-licenses products throughout the world. In addition, this acquisition
enhances Watson’s commercial presence in key European markets by providing a
portfolio of approved products. The transaction also gives Watson a strong
branded-generic commercial presence in the EUR 6 billion Greek pharmaceutical
market. Specifar’s pipeline includes a generic tablet version of Nexium
(esomeprazole), which could launch in certain European markets as early as the
fourth quarter of 2011. Under the terms of the acquisition agreement, Specifar’s
former owners could receive additional consideration based on future profits
from this product.
Watson anticipates that the transaction will be immediately
accretive to 2011 non-GAAP earnings.
Specifar, with annual revenue of approximately EUR 85
million for 2010, operates two core businesses. The Company is a third-party product
developer, with approximately 400 marketing authorizations licensed to third
parties for sale in 36 countries, predominantly in Europe.
Specifar has eight products currently filed in the EU and additional products
in development. The Company’s development business, which operates
internationally, accounts for more than 70% of total revenues.
The Specifar group is in the top five in the Greek
branded-generic market, with a portfolio of more than 30 products, including internally
developed and in-licensed products sold through a sales force of 170 employees.
Specifar also markets products in Greece under the Alet Pharmaceuticals
brand through a separate 55 representative sales force.
Specifar currently manufactures generic pharmaceutical
products in a modern, EU-approved facility located in Athens with capacity for approximately 1
billion doses annually. A new state-of-the-art facility is currently under
construction just outside of Athens.
This facility will provide capacity to manufacture an additional 3 to 5 billion
doses, further enhancing Watson’s global supply chain. EU certification of the
new facility is expected in mid-2012. This capacity will ultimately permit
Watson to convert additional third-party manufactured products to
“We are very pleased that Specifar has become part of
our global organization. We look forward to working with the management team to
continue Specifar’s growth and to expanding the opportunities for success
within Watson,” said Paul Bisaro, Watson’s President and CEO.
“The strategic significance of this combination is
Watson will now have a powerful product development
capability recognized throughout the industry for its strong track record of successfully
launching products in key European markets, supported by an accomplished
R&D and regulatory capability. The development business will continue to
develop and market products to third parties under the Specifar name and now
will also develop products for Watson’s commercial groups worldwide. In
addition, we intend to expand Specifar’s development capabilities and create a
center of excellence for product development in international markets. We also believe
that Specifar’s European management expertise and existing business
relationships will support Watson’s current and future commercial expansion in
“Watson also gains a substantial commercial position in
the Greek branded-generic market where the Specifar and Alet brands currently rank
in the top five, Watson can leverage its portfolio of products through these
effective sales platforms. Greece’s
generic product utilization is currently one of the lowest in Europe,
providing us with a significant opportunity to capitalize on growth in this market,”
“Finally, the Esomeprazole tablet opportunity
represents a significant upside potential for Watson. As there are certain
variables surrounding this product, we have structured the esomeprazole opportunity
as an earn-out allowing Specifar’s former owners to participate in any
potential commercial upside from this product,” Bisaro concluded.