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Allergan Generics Has Strengthened Teva’s Research Pipeline

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Sep. 30 2016, Updated 10:04 a.m. ET

Teva’s research pipeline

The acquisition of Allergan’s (AGN) generic business has proved pivotal to the success of Teva Pharmaceutical’s (TEVA) research programs. This acquisition enabled the company’s R&D (research and development) pipeline to become the strongest generic drug pipeline in the world. Teva is capable of developing formulations across all levels of complexity for multiple therapeutic areas.

The deal also added to the company’s ability to develop generic drugs in a limited time. A timely product launch is a key driver for a generic pharmaceutical company’s growth. Teva’s increased capacity to adhere to aggressive deadlines in its generic drug research programs could be considered a major differentiating factor. This may raise Teva Pharmaceutical’s share prices as well as those of the SPDR MSCI ACWI ex-US ETF (CWI). Teva makes up about 0.30% of CWI’s total portfolio holdings.

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Global generic R&D network

The above diagram shows Teva Pharmaceutical’s generic R&D network across therapeutic areas and geographies. The company has about 3,000 employees in its research programs across 26 development sites in 20 countries and six clinical sites in India and Florida. The clinical sites help optimize the cost and time for the company’s bioequivalence studies. The broad R&D network could help Teva pose strong competition to other generic players such as Mylan (MYL), Pfizer (PFE), and Novartis (NVS) in the future.

Prior to the acquisition of the Allergan generics business, Teva Pharmaceutical was strong in areas such as immediate release solid oral dosages, extended release solid oral dosages, injectables, complex injectables, inhalation, ophthalmics, and biosimilars. Allergan Generics has been strong in areas such as immediate release solid oral dosages, extended release solid oral dosages, semi-solids and liquids, transdermals, injectables, and rings and suppositories. So the combination of these two companies has resulted in a product pipeline with minimal gaps.

In the next and final part of our series, we’ll analyze the performance of the research pipeline for the combined Teva–Allergan Generics company in 2015.

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