Impax Laboratories Inc. and Amneal Pharmaceuticals LLC are close to a merger agreement, The Wall Street Journal reported, citing people familiar with the matter.
The parties are in advanced negotiations for a potential deal that would create the fifth-largest generic-drug company in the U.S. by revenue. Under the all-stock deal, Impax shareholders will hold 25% of the new entity and Amneal owners will hold the remainder, the sources said.
The merged company, which will be called Amneal Pharmaceuticals, is expected to be worth $6.4 billion, or about $9 billion with debt, some sources said. Further, Paul Bisaro, who was appointed Impax CEO in March, is expected to lead the new company as CEO.
According to the Journal, the new company will be better placed to handle the changing generic drug market. In a recent report, S&P Global Ratings said pricing pressure will continue to plague generic drugmakers in 2018, reflecting larger challenges in the industry that could bring on more consolidation. S&P said it expects double-digit price erosion from smaller generics manufacturers such as Impax.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.