Actavis workers are passing through a renewed patch of uncertainty as the pharmaceutical company is in the process of being bought by new owners.
This is the second change in four months after Actavis, a generic drug maker, joined with Allergan, a pharmaceutical company best known for its Botox anti-wrinkle treatment, in March.
The latest deal, worth more than $40 billion (€36 billion), was reached at the end of July and will see Israel’s Teva Pharmaceutical Industries buy Actavis, Allergan’s generic business.
The deal, which is expected to be finalised in the first quarter of 2016, will strengthen Teva’s position as the world’s top maker of generic medicines.
But it also leaves Actavis employees in Malta worried over their future. Two years ago Actavis closed its research and development unit after the company was bought by American firm Watson.
Every change brings fear but at this stage it is still too premature to say what will happen
Sergio Vella, Actavis vice-president for manufacturing operations in Western Europe, would not say whether the Teva deal would lead to downsizing at the Malta plants.
“Many of the details will be worked out in the months ahead as we approach closing of the transaction, anticipated in Q1 2016,” he said.
Mr Vella said until the manufacturing sites in Malta are transferred to Teva they will remain part of Allergan’s network.
General Workers’ Union section secretary Jason Deguara said the union would not have any information before the merger is complete, which will be some time next year. As yet the union has no indications that the Malta plants will downsize, he added. He explained that Actavis had no less than four owners in four years as cut-throat competition in the pharmaceutical sector saw multiple company mergers and acquisitions.
“Every change brings fear but at this stage it is still too premature to say what will happen after the merger, but just before going out on shut down we were informed by the company its intention was to have three quarters of the workforce work on a four-shift basis by November,” Mr Deguara said.
This was a result of more work orders and would also entail employing more people, he added.
Reuters has reported the deal will be the largest in Israel’s corporate history, allowing Teva stronger economies of scale, crucial in the low-margin generic drugs business. But regulatory pressures may force Teva to sell off some drugs to allay antitrust concerns.
When asked whether this shedding of products will have an impact on the Malta Actavis plants, Mr Vella said that the transaction was still at “a very early phase”.
The Israeli company had been trying to find new revenue sources to combat generic competition for its branded multiple sclerosis drug Copaxone. Copaxone accounts for about half of Teva’s profit.
In the first quarter of 2015 Teva had revenue of $2.6 billion, a nine per cent increase over the same quarter last year.
The US market accounted for 59 per cent of the company’s revenue, followed by Europe with 25 per cent.
The company is expected to have revenue of $26 billion and earnings before interest, tax, depreciation and amortization of $9.5 billion in 2016 after the merger is complete. Teva will gain a portfolio of more than 1,000 products.
kurt.sansone@timesofmalta.com