Mylan Laboratories and King Pharmaceuticals yesterday said that they have “mutually agreed” to call off their planned $4 billion dollar merger because they had been unable to agree on the terms for a revised transaction. A joint statement from the companies gave little else away.
The proposed merger, which was originally announced in July last year [[27/07/04d]], would have given generics company, Mylan, access to King’s $450 million-a-year blood pressure drug, Altace (ramipril), in addition to the latter’s cardiovascular salesforce, which it hoped to use to sell its own hypertension offering, nebivolol. However, the merger faced strong opposition from the outset, principally in the form of Mylan’s billionaire investor, Carl Icahn, who lambasted the deal as an “egregious mistake” [[18/10/04e]]. He vowed to block the agreement [[02/11/04b]], buying a large tranche of the company’s shares [[23/08/04e]], [[02/11/04b]], and even launched his own takeover offer [[22/11/04b]].
The agreement was also put in jeopardy back in October [[29/10/04b]], after King revealed that it would have to restate its financial results for 2002, 2003 and the first six months of 2004 due “methodological flaws concerning the timing of expense recognition for product returns.” Mylan had the right to terminate the deal, or renegotiate the terms, if King had to restate its previously announced results – the restatement was completed last week [[23/02/05d]].
- Meanwhile, the US Food and Drug Administration delivered another blow to Mylan when it revealed that it was extending the original ten-month approval deadline for nebivolol to May 31. The firm had originally hoped to have an FDA decision today, but this was put back after the agency requested “an additional presentation of already-submitted data.”
However, Mylan notes that the agency could complete its final review before the new action date.