Galen's Generic Gamble

Galen's $359 million acquisition of Pfizer's women's health portfolio fits in well with the group's strategy to date. But the structure of the deal also highlights Galen's increasing exposure to generic competition.

In March 2003 Warner Chilcott PLC announced a proposed acquisition of Pfizer Inc. 's women's health portfolio—comprising the oral contraceptives Estrostep and Loestrin and the combination hormone replacement therapy Femhrt—for an initial cash payment of $359 million (£228.1 million) [See Deal]. Combined sales of the three Pfizer products peaked in 2001 at more than $265 million.

Galen's move was expected, given the fit with its own therapeutic focus and intent to expand within the US market,...

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