Teva announced today that it will pay €265m (plus possible performance-related milestones) to acquire Laboratoire Theramex, a Monaco-based subsidiary of Merck KGaA that specialises in hormone replacement therapy and other women’s health products. Theramex had sales of approximately €100m in 2009, a figure that has remained almost unchanged for the last few years, due to the company’s mature portfolio. Its main markets are France and Italy, although it sells in 50 countries overall. Theramex employs about 300 people, covering sales, admin, R&D and manufacturing and it makes its own APIs.
Theramex’s main products are Orocal (calcium carbonate, sold OTC to prevent osteoporosis), Colpotrophine (promestriene, an oestrogen used to treat vaginal dryness), Lutenyl (nomegestrol acetate, used for HRT), Monazol (sertaconazole, used to treat candida infections) and Estreva gel (estradiol, used for HRT). It has also developed a novel contraceptive containing nomegestrol acetate and beta-estradiol that is in pre-registration in Europe through Theramex’s licensee Merck & Co (which acquired the rights from Organon via its takeover of Schering Plough). Given that Merck does not appear to be particularly interested in oral contraceptives, it may be that Teva can regain these rights and commercialise the product itself, which might be an attractive option given that very extensive clnical trials have already been carried out.
The rationale for Teva buying Theramex is straightforward. Teva is commited to substantially increasing the size of its women’s health franchise (most of which it acquired along with Barr at the end of 2008) and the only realistic way to do this is by acquisition. At Teva’s strategy day at the start of this year, managment stated that women’s health was expected to grow from 12% of 2009 sales to 17% of 2015F sales, which means from $500m to $1.4bn in the next five years. Given that growth of this franchise to date has been pretty limited, it was always clear that the inorganic route was the only possible way to achieve this goal and even with Theramex on board, Teva still has an awful long way to go.
Merck Serono is not likely to be the only company divesting women’s health assets, though. As noted, Merck & Co didn’t buy Schering Plough for Organon and might well look to dispose of it, while Abbott could also shed Solvay’s women’s health business, which was non-core even for Solvay. We would therefore expect further deals in this space to follow.