SICOR's stockholders voted on Friday to approve the merger, in which SICOR will become a wholly-owned subsidiary of the Israeli firm. The merger is expected to be completed in the first quarter of this year.
SICOR brings to Teva a complementary stable of generics, but also the capability to manufacture copycat versions of biotechnology drugs - so called biogenerics. This is an area with significant long-term growth potential; there are currently no approved biogenerics in the world's main pharmaceutical markets, mainly because of the difficulties in mapping out a regulatory route for their approval.
The acquisition will also give Teva a strong position in the field of injectable generics. Last year, around three quarters of SICOR's $455 million (€366m) turnover came from its injectable operations.
Teva's chief executive, Israel Makov, has said that the deal will probably be earnings-enhancing within its first year. The Israeli firm also has a growing API business, providing another strategic fit from the merger.
The global generics sector has powered ahead in the last two years as the allure of strong profit margins coupled with increasing political will to use cheaper drugs, particularly outside the US, has seen an increasing number of players in the market.
Generics specialists such as Mylan Laboratories and Watson Pharmaceuticals have now been joined by the likes of Novartis and Merck KGaA, which, despite having their roots in branded drugmaking, have viewed the potential revenues from selling generics as an opportunity that cannot be missed.
The rapid growth of the generics market has been underpinned by a number of key patent expirations on blockbuster products in recent times. These include, AstraZeneca's multi-billion-dollar earning antiulcerant Prilosec /Losec (omeprazole), Merck KGaA's diabetes drug Glucophage (metformin; partnered with Bristol-Myers Squibb) and Eli Lilly's antidepressant Prozac (fluoxetine).
SICOR currently manufactures 25 APIs for its own generics, as well as 36 APIs for sale to other pharmaceutical companies for use in finished dosage pharmaceutical products, including anti-inflammatories, oncolytics, immunosuppressants and muscle relaxants.
The company also produces APIs for use in the manufacture of finished dosage pharmaceutical products for oral, pulmonary, intravenous and topical administration.