Actavis (ACT) is expanding its footprint in the international generics markets, and the company intends to implement the following initiatives:
- launch new products
- market authorization of existing products in the international market
- in-licensing products through acquisitions and strategic alliances
Due to Actavis’s broad portfolio, it is able to customize products for certain markets. For example, the company may develop rosuvastatin, a generic product that it can launch as an unbranded generic in the US and the UK. However, the same product could be launched as a branded generic in Russia.
Also, Actavis is focusing on high-growth markets and is divesting the businesses that are either low growth or highly sensitive to pricing. The company divested its unprofitable Western European business in 2014. Mylan (MYL) is also expanding its business outside the US through the acquisition of Abbott’s non-US branded generics business.
Acquisition for market expansion
Actavis has been actively involved in mergers and acquisitions to expand its international presence. The company plans to acquire Auden Mckenzie, focusing on the development, licensing, and marketing of niche generic medicines and proprietary brands in the UK.
This move is expected to make Actavis the top supplier of generic products in the UK. The acquisition of Silom Medical Company, a private company based in Thailand, has expanded the company’s position in the Thai generics market.
Teva (TEVA) has the leading position in European markets such as Germany, the UK, and Italy.
Acquisition of products
Actavis’s acquisition of Auden Mckenzie is expected to add approximately 175 new generic and branded products. Additionally, a pipeline of around 40 additional products across a broad spectrum of therapeutic areas.
The profitability derived through the international generics market could be capitalized through investing in pharmaceutical ETFs like the Health Care Select Sector SPDR Fund (XLV) and the iShares US Healthcare ETF (IYH).