Saturday, November 20, 2004

Corporate Raider Poison Pills Mylan

Pittsburgh-based drug maker Mylan (MYL) shares shot up 10 percent last Friday after 80's raider Carl Ichan offered $5.38 billion for the company's shares he doesn't already own. According to sources, Icahn may be attempting to block Mylan's $4 billion acquisition of King Pharmaceuticals (KG).

Mylan has been a long time Catablast! favorite since the company decided to fight back against the larger brand name companies who were aiming to nibble at the generic drug company's profits via a process called authorized generics--the procedure by which a brand name co. picks ONE generic co. to sell whatever drug is nearing expiration. Even while earnings growth for most of the generics remains lackluster, Mylan continues to merge with rivals and fight tooth and nail for patent extension. Another boost for Mylan is their lawlyerly savviness--while chemists make Mylan's products, their fast-acting legal team builds the road to big profit. "Mylan, particularly adept at weaving through the legal maze and grabbing first-to-market status, is one of the best generic manufacturers at seizing opportunities in the courtroom," claimed Investors Business Daily. TEVA Pharmaceuticals is also against authorized generics.

"We believe that there are much better alternatives for Mylan than the acquisition of King," Icahn averred in a securities filings Friday. "In fact, in light of the many risks associated with King, we believe that an acquisition of King would be an egregious mistake," he continued.Icahn, who owns just under 10 percent of Mylan, offered $20 a share for the company's 2.7 million outstanding shares. Mylan Laboratories Inc. confirmed that it received a letter from Icahn and stated that it would respond in due course. This letter appears to be a standard Icahn tactic, containing factual misrepresentations, and is notable in its lack of detail and commitment, replied Mylan CEO Robert J. Coury.

(D.Andres Jacome did not hold a position in Mylan at the time of publication)

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