Mylan To Snap Up Aspen’s Thrombosis Unit For $757M As Street Is Bullish

Mylan has entered into an agreement to buy the rights to Aspen Pharmacare’s thrombosis business in Europe for EUR 641.9 million ($756.8 million).

Under the terms of the agreement, Mylan (MYL) will acquire the intellectual property and commercialization rights of Aspen’s thrombosis business in Europe, subject to customary closing conditions and European regulatory clearances. The transaction will be immediately accretive to the US pharmaceutical company upon closing of the deal, which is expected before Dec. 31.

Mylan said it will fund an upfront payment of EUR 263.2 million to Aspen from existing cash and expects to utilize cash generated from operations to make the final deferred payment of EUR 378.7 million on June 25, 2021. The company does not expect the deal to impact its target of approximately $1 billion of 2020 debt repayments.

“The acquisition of this thrombosis portfolio is a significant addition to Mylan’s European business that will not only make Mylan the second largest supplier of these products to patients in Europe, according to IQVIA, but also bolster our existing commercial infrastructure to further expand access to complex injectables,” said Mylan President Rajiv Malik. “By adding to our highly experienced sales and marketing team, we will further strengthen our current reach in hospitals and enhance the future growth of our biosimilars franchise in Europe.”

The Aspen portfolio consists of injectable anticoagulants sold in Europe under the brand names, and variations of the brand names, Arixtra, Fraxiparine, Mono-Embolex and Orgaran. These products had combined net sales of about EUR 231 million for the 12 months ended June 30, 2020 and are expected to be accretive to Mylan’s consolidated adjusted EBITDA margins, as well as the anticipated consolidated adjusted EBITDA margins of Viatris.

Furthermore, the South African drugmaker will retain manufacturing and product supply responsibilities and will provide Mylan with the finished product. Aspen has a fully vertically integrated supply chain predominantly located in Europe. 

Mylan shares have plunged 21% so far this year, with the $23 average price target indicating 45% upside potential lies ahead over the coming year.

Earlier this month, Raymond James analyst Elliot Wilbur reiterated a Buy rating on the stock with a $27 price target.

“MYL shares are underperforming generic peers (…) near-term technicals in the name and the group in general have been deteriorating for several weeks,” Wilbur wrote in a note to investors. “No real identifiable new source of concerns emerging over the group, at least to our knowledge, but rather just more of the same – sluggish US generic trends and additional avenues of litigation opening up against other key players.”

Overall, MYL has a bullish Strong Buy analyst consensus with 3 Buys and 1 Hold. (See MYL stock analysis on TipRanks)

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