Actavis Inc (ACT) Profits Decrease As Acquisition Takes Toll: Teva Pharmaceutical Industries Ltd (ADR) (TEVA), Mylan Inc. (MYL)

Unlike in the U.S., generic drugs do not feature in top lists in Europe, which essentially indicates high potential in these markets. Mylan Inc. (NASDAQ:MYL) started its international push in a big way by acquiring the generics business of the German pharmaceutical company Merck in 2007 but has since then expanded in India too. The management was not shy, saying that it would consider deals valued at “well over” $4 billion.

The consolidation is not endless as the largest generics player Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) has slowed, after growing exponentially through a series of buyouts. The Israeli-based generic major has clearly moved toward an organic growth model, said its chairman Phillip Frost in November, marking a major shift from its history of acquisitions.

Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) has made 25 acquisitions in the past 10 years, including five valued at $3 billion or more. The last major acquisition for Teva was in July 2011 when it acquired a majority stake in the Japanese generic drug company Taiyo Pharmaceutical Industry.

Acquisitions will still continue to be important to Teva but the shift will be toward small to medium-sized deals that fit strategically with its pipeline.

All three companies are trying to maintain their growth rates through different strategies. While Actavis and Mylan seem to favor inorganic growth which offers instant benefits in boosting revenues and profits, Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA)’s more calibrated approach of limiting buyouts to “bolt-on” acquisitions is aimed at consolidating and getting the best out of the acquired businesses. As such, Teva’s strategy provides a glimpse of the things to come for Actavis and Mylan.

The article Actavis Profits Decrease As Acquisition Takes Toll originally appeared on Fool.com and is written by Jacob Wolinsky.

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