* CEO says generic industry consolidation to continue
* Says will have to seek deals to complement organic growth
* Stada remarks follow Watson-Actavis deal worth $5.6 bln
FRANKFURT, May 30 German generic drugmaker Stada
said rivals' growing appetite for takeovers is
spurring it to also seek acquisitions as the industry goes for
size to cut costs and compete on price.
Consolidation in the pharmaceutical and generics industry
was set to continue, Chief Executive Hartmut Retzlaff told
shareholders at the group's annual general meeting on Wednesday.
"In the face of this we, too, want to and have to
complement organic growth through acquisitions."
Swiss drugmaker Novartis this month agreed to buy
generic dermatology products maker Fougera for $1.53 billion, a
week after Watson snatched up rival generic drugmaker
Actavis Group for $5.6 billion.
The Watson-Actavis deal which will create a group with $7.1
billion in sales, almost three times Stada's $2.4 billion.
Israel's Teva remains the undisputed No.1 in generics,
having chalked up billions in takeover deals over the last 10
Retzlaff earlier this year, however, said the need for size
was overstated, rejecting a view held by a number of analysts
that Stada was lacking economies of scale.
A recent Reuters report showed that Stada failed to strike
two takeover deals following months of exclusive talks in a key
emerging market, Russia.
Burdened with net debt worth three times its annual core
earnings, Stada's financial firepower is seen as limited.
Thomson Reuters StarMine data shows that the debt multiple for
Teva and Watson stands at 1.5 and 0.8, respectively.
Retzlaff also said on Wednesday that Stada's initial goal to
cut 800 jobs by 2013 would be reached this year.