Drugmaker Mylan's shares jump 10 pct on deal talk, rosy outlook

Thu Feb 27, 2014 2:20pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Bill Berkrot

Feb 27 (Reuters) - Shares of Mylan Inc jumped more than 10 percent on Thursday after the U.S. generic drugmaker provided a 2014 forecast above analysts' estimates and said it planned a major transaction this year that would add to future earnings.

Mylan's plan for a big transaction comes amid a wave of recent acquisitions in the generic and specialty drug sectors.

"We're looking at anything that would be strategic and complement us and be accretive and I would say ... we have seen several interesting things out there that would accomplish this," Mylan Chief Executive Heather Bresch told analysts on a conference call after reporting fourth-quarter results.

The company said it was not limiting its options to generic opportunities and was open to looking at makers of branded drugs and deals outside the United States.

Mylan rival Actavis earlier this month agreed to buy Forest Laboratories for about $25 billion. It previously acquired specialty drugmaker Warner Chilcott in a move that enabled it to relocate to Ireland and enjoy a substantially lower tax rate, a move that Mylan could follow.

"You look at a lot of their peers who have much lower tax rates now and it would suggest that they potentially have to go after one of those remaining Irish-domiciled companies," Morningstar analyst Michael Waterhouse said.

Mylan was reported to have shown initial interest in Irish drugmaker Elan before backing away from that process.

"While any deal would have to bring accretion and strategic value, we also believe a tax inversion deal would be well received by investors," JP Morgan analyst Chris Schott said in a research note.   Continued...