Sweden's Meda says it a predator, not prey in drugs industry consolidation
STOCKHOLM (Reuters) - Swedish drugmaker Meda (MEDAa.ST), a recent takeover target of U.S. rival Mylan Inc (MYL.O), said on Wednesday acquisitions could double its size in two years and that it considered itself a predator and not prey in a consolidating pharma industry.
Meda, which last month spurned two takeover approaches from the U.S. generic drugs firm, said major acquisitions were again "a top subject" for the company.
"Either you eat or you will be eaten," Meda Chief Executive Jorg-Thomas Dierks told a conference call. "And I think that it is quite logical that we prefer to eat and not to be eaten."
Meda was built through the acquisitions of other companies and product portfolios, and doubling sales in two years would be a repeat of Meda's performance in the years 2006 to 2008.
Last year Meda had sales of 13 billion Swedish crowns ($2 billion), an almost 17-fold increase from a decade ago.
Dierks said acquisitions were necessary to complement organic growth and still key to Meda's strategy after a pause of a couple of years.
"I see absolutely no reason why we should not double our size within the timeframe of two years," he said, adding that acquisitions would either complement Meda's existing product portfolio, or be of a "transformational, strategic" kind.
"What we see in the industry is that it is an industry of consolidation, and as I said before it is very simple. You will belong to the winners or you will belong to the losers, and there is nothing in between."
Meda has been seen as takeover candidate for years in an industry which is trying to cut costs and add specialized expertise as it faces pressures on prices from healthcare service providers in developed countries seeking to restrict their spending.
A flurry of multi-billion dollar deals and bids in recent months is set to make this year the busiest ever for M&A in the healthcare sector with Pfizer's (PFE.N) $106 billion offer for AstraZeneca (AZN.L) on May 2 the biggest proposed deal so far.
Meda's earnings before interest, tax, depreciation and amortization (EBITDA) rose to 1,010 million crowns in the first quarter from 923 million in the same period last year. The result was in line with the mean forecast of 1,018 million crowns in a Reuters poll of analysts.
On a like-for-like basis, sales rose by 3 percent, but in Russia and Ukraine sales fell because of the political and economic uncertainty there, Meda said.
Meda's shares fell 2.5 percent by 1114 GMT while the broader Stockholm market index .OMXSPI was down 0.4 percent.
Meda repeated it expected organic sales growth, which excludes exchange rate movements and acquisitions, to this year be in line with the 4 percent advance seen in 2013 while its operating margin (EBITDA) is expected to improve on last year's 28.5 percent.
Link to full report: r.reuters.com/xyd29v
(Additional reporting by Rebecka Roos; Editing by Greg Mahlich)