The price tag is twice the €375m paid for Viatris by Advent International, a private equity firm which bought it from spun out of German chemicals company Degussa in 2002.
Aside from Meda, a number of other companies have been reported to be eyeing Viatris, which is in the process of rolling out an innovative new inhaler device, called Novoliser/Novolizer, in European markets.
Novoliser is a dry powder inhaler that has a full dose counter and makes it clear to patients when they have taken a dose, and with accurate and consistent delivery of active drug to the lungs - something which it is said can be a problem with other DPIs. It also offers a refill system for a number of different active substances which reduces cost and waste.
The current European roll-out is proving successful, according to Viatris, and the Novoliser brought in first-half 2005 sales of €13.5m, an increase of over 130 per cent year-on-year. Overall, Viatris' products fall into four therapeutic areas: respiratory and allergy; pain/neurology; dermatology and hygiene; and metabolic regulation. Respiratory is the firm's most important therapeutic area.
Total Viatris sales in 2004 were €377m, with earnings before interest, tax, depreciation and amortisation (EBITDA) of €49m.So far the product is available in Germany, France, Spain, the UK, Ireland, Italy, Netherlands, Belgium and Portugal.
Under the terms of the agreement, Meda will pay €538m in a cash and share transaction for all Viatris' shares and will assume net debt (including pension provisions) of around €167m.
Other drugmakers reported as being interested in Viatris include two Indian firms, Wockhardt and Ranbaxy, Belgium's UCB, Spain's Almirall Prodesfarma, Chiesi Farmaceutici of Italy and Germany's Altana. Meda said it swooped on Viatris as part of its previously-announced strategy of establishing marketing affiliates in larger European countries. Meda's main market is the Nordic area, where Viatris does not have a presence.
In addition, Meda owns no production facilities and works with contract manufacturers, while Viatris has modern sites for inhalation products and tablet production. Also, Viatris has capacity for pharmaceutical development, which Meda lacks, allowing the combined company to squeeze more potential out of existing products.