Barr sees deeper Europe growth for M&A
NEW YORK (Reuters) - Barr Pharmaceuticals BRL.N is focusing its acquisition priorities on pieces to complement its current base in Europe and on development of a second therapeutic category beyond its current specialty in women's health, the drugmaker's chief executive said on Monday.
New Jersey-based Barr gained a European presence through its $2.5 billion acquisition of Croatia's Pliva last year that also transformed it into one of the world's largest generic drug companies. Barr now has expanded its sales into Germany, Croatia, Russia and Poland.
Some have speculated Barr would seek to expand into Western Europe, but Barr Chief Executive Officer Bruce Downey said he would prefer to "get deeper (in the company's current regions) than think about expanding elsewhere."
"In Europe, I think it would be more of the small pieces that complement or add to what we already have, as opposed to some new geographic expansion," Downey told the Reuters Health Summit in New York by telephone.
Downey said Barr had evaluated 20 companies in the last three years as possible acquisition targets to develop its long-sought second therapeutic category.
The company has two urology products in development, "so by default that may become a second category," Downey said in the interview. He also mentioned ophthalmology, dermatology, neurology and oncology as among the other possibilities.
Although Pliva gave Barr an overseas presence, the boost to its U.S. business is the aspect of the deal most underestimated by investors, Downey said.
For example, with Pliva in the fold, Downey projected that Barr would have 35 to 40 generic injectable products in the United States in three years, up from its current six. The antibiotic azithromycin is one of the bigger injectable products the company has, Downey said.
Overall, Downey said the benefits of Pliva are not reflected in the stock price and that some on Wall Street have been skeptical about the deal.
"I think we've done a pretty good job on the integration front," Downey said. "I think people are starting to recognize that."
The Pliva deal also added capabilities to help Barr develop generic versions of pricey biotechnology drugs.
Downey said that Barr was one of a handful of companies to have complete expertise in the area, along with Hospira (HSP.N), Teva Pharmaceutical Industries (TEVA.O) and Sandoz, the generic drugs unit of Novartis AG. (NOVN.VX)
Downey said he expected the United States to create a legal pathway for approval of generic biotech medicines in 2008 or 2009. The first drugs to use that pathway could reach the U.S. market by 2011 or 2012, he said.
Barr has cut back its generic biologic development to about six products, Downey said. A generic version of G-CSF, a white blood-cell booster now marketed by Amgen Inc (AMGN.O) as Neupogen, will probably be Barr's second generic biologic to reach the U.S. market, he said.
Downey declined to disclose the other generic biotech drugs Barr is developing.
(For summit blog: summitnotebook.reuters.com/)
(Additional reporting by Bill Berkrot, editing by Phil Berlowitz)
