UPDATE 2-Teva Pharma to acquire CoGenesys for $400 mln

Tue Jan 22, 2008 9:15am EST

(Changes dateline from NEW YORK, adds analyst comments)

TEL AVIV Jan 22 (Reuters) - Israel's Teva Pharmaceutical Industries Ltd TEVA.O (TEVA.TA) said on Tuesday it would acquire privately held biopharmaceutical company CoGenesys Inc for $400 million in cash.

Teva said the deal, to be funded from its internal resources and expected to close during the first half of 2008, would help its position in the biogenerics market.

Teva said it sees biopharmaceuticals, and primarily biogenerics, as a key, long-term growth opportunity. Biogeneric drugs are based on biologics, or proteins manufactured in living cells.

CoGenesys was spun out of Human Genome Sciences Inc HGSI.O in June 2006. CoGenesys said its albumin fusion technology allows its drug candidates to have the potential to last longer in the body and require less frequent doses.

CoGenesys' pipeline of biologic drugs includes treatments for cardiovascular disease, multiple sclerosis, diabetes and autoimmune diseases. The company has 80 employees, including 20 scientists.

Teva said its large-scale operations and experience in bringing drugs to market will help boost the potential development of CoGenesys' technologies and drug pipeline.

Leader Capital Markets analyst Yoav Burgan said the market has been waiting for a major acquisition from Teva, but this was not it.

"The market has been looking for an acquisition in the amount of $1 billion to $2 billion," Burgan said, adding that $400 million was medium size for Teva, a company with over $9 billion a year in sales and a market cap of $38 billion.

Two years ago, Teva acquired drug maker Ivax for $7.4 billion.

Yisca Erez, an analyst at Israeli brokerage Clal Finance Batucha, said deals such as this are measured over the long term.

"It is difficult to estimate how worth while this deal is or its enhancement to Teva as it is the acquisition of a technology that will serve as a platform for innovative and biogeneric products," she said.

Currently, Teva markets a small number of biopharmaceutical drugs including human growth hormone.

Teva shares were down 1.3 percent in afternoon trade in Tel Aviv, compared with declines of 1.9 percent in the broader market. (Reporting by Tova Cohen in Tel Aviv, Ritsuko Ando in New York and Jessica Hall in Philadelphia; editing by Elaine Hardcastle)

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