Amneal and Impax to Marry, Creating the 5th Largest Generics Biz in the U.S.

Finance

Privately held Amneal Pharmaceuticals and Impax Laboratories are combining into a new entity that is expected to have the fifth largest generics business in the United States.

The new company, Amneal Pharmaceuticals, Inc., will have a portfolio of about 165 generic drugs. Under terms of the deal Amneal Holdings will own approximately 75 percent of the new company and Impax shareholders will own approximately 25 percent. Despite the merger, shareholders of Impax Laboratories are not responding favorably. Shares of California-based Impax are down about 10 percent in early trading, falling from Monday’s close of $19.95 to $17.95.

The deal is expected to be finalized in the first half of 2018. The combination of the two companies is expected to achieve annual cost savings of approximately $200 million within three years. That cash flow will be used to pay debt and invest in the new entity’s pipeline.

Chirag Patel, co-chief executive officer of Amneal, said that since the company was founded 15 years ago, Amneal has become a leader in the U.S. generics industry. Chintu Patel, the other co-CCEO at Amneal, agreed. In a statement, he said that the combination of Amneal and Impax will help the company achieve the long-term goal of “providing greater access” of medicine to a larger group of people, as well as position the company for continued success.

"This transaction combines the complementary strengths of both Amneal and Impax to create an even stronger company with the diversification, capabilities and resources to deliver enhanced value for patients, new opportunities for our collective employees and increased growth and value creation for shareholders,” Chirag Patel said in a statement.

Paul Bisaro, CEO of Impax, said the combination of the two companies will create a highly diversified company with “one of the industry's leading high-value generic product pipelines and a growing specialty business.” Bisaro added that the combined portfolio from the two companies will be supported by “global, high-quality development and manufacturing capabilities."

As part of the deal, Bisaro will serve as CEO of the new company while the two Patels will serve as co-chairmen of the boards for the new company. Bryan Reasons, chief financial officer of Impax, will serve as Chief Financial Officer of the combined companies. 

The combination of the two companies is expected to create a pipeline of approximately 150 pending ANDAs and 165 projects in active stages of development. The combination also adds a foundation for commercial entry into biosimilars with two in-licensed products, one filed and one near-term filing opportunity in development, the companies announced this morning.
 

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