Following Mylan's offer to purchase Perrigo, analysts believe that generic companies such as Actavis, Forest and Teva could also be prompted to pursue deals, TheStreet reported Wednesday.
Charles Yon of Bowditch & Dewey noted that Actavis, Forest, Teva and Abbott's generics division are the only remaining consolidators, leading to speculation that the companies could begin to prey on each other.
Jefferies & Co. analyst David Steinberg noted that because of consolidation, the number of publicly traded generic drugmakers has shrank to 11, down from 27 six years previously, noting that although Novartis' Sandoz unit is a major player in the generics market, the company has not been as active in M&A as other drugmakers.
Steinberg, who suggested that Mylan's offer for Perrigo could be a pre-emptive move to prevent a takeover by Teva, indicated that if Teva were to purchase Mylan, the company would gain a pricing advantage from becoming the world's largest generics manufacturer.
"I'm wondering that as it becomes more concentrated if antitrust authorities will be looking closer at this," Yon commented, adding "there's been enough consolidation that my impression is it wouldn't be surprising to ask for certain information and for second requests."
"My thesis is the global giants will become increasingly larger in scale, further diversify internationally and fill in where they don't have a product offering domestically," explained Steinberg, adding that small, nice drugmakers will be the principle targets.