Forest Labs to be sold to Actavis for $25B
Drugmaker Forest Laboratories Inc., which employs more than 600 people in Commack and Hauppauge, is being purchased by another industry leader for $25 billion, executives said Tuesday.
Manhattan-based Forest has agreed to be bought by Actavis PLC, formerly known as Watson Pharmaceuticals Inc. Last year the company moved its global headquarters from Parsippany, N.J., to Dublin to save on U.S. corporate taxes; Parsippany is still its U.S. base.
Forest spent its early years in Inwood, pioneering the technology that slowly releases a drug into the body, and developing branded prescription drugs. It is known for Bystolic, which treats high blood pressure, and Teflaro, a remedy for skin infections.
Actavis specializes in branded and generic pharmaceuticals used in women's health, urology, gastroenterology and dermatology. It employs about 200 people at a gum plant in Copiague.
Executives said Tuesday the deal would create a powerhouse with annual sales topping $15 billion next year. It also represents a victory for corporate raider Carl Icahn, who has been agitating for a Forest sale and management changes since first buying Forest stock in 2009.
"We believe, over time, that being able to offer customers a variety of products in both branded and generics will be something that will give us an advantage over many of our competitors," Forest chief executive Brent Saunders said. He took charge of Forest in September, with Icahn's blessing.
Forest, though no longer headquartered on Long Island, is the most well-known of the region's two dozen or so drugmakers. The Forest sale follows a pending buyout of Hi-Tech Pharmacal Co. in Amityville and the 2010 takeover of OSI Pharmaceuticals, which relocated to Illinois from Farmingdale.
Forest began moving operations from Inwood to Suffolk in the 1990s. By 2011, it had amassed 945,000 square feet of space in nine buildings, 55 percent of which wasn't being used.
To remedy that problem, the drugmaker embarked on a $40-million plan to convert a former packaging facility at 500 Commack Rd. in Commack for administration and research. The company also kept two small offices in Commack and Hauppauge.
The ongoing project was aided by $5 million in grants and tax credits from New York State and $2.16 million in tax breaks over 10 years from Suffolk. In return, Forest promised to maintain 679 jobs locally and to add 10.
Forest spokeswoman Mandy Kaufman told Newsday, "It's too early to comment on the impact to specific sites or on employment."
An Actavis spokesman didn't immediately return a telephone call.
Shares of Forest rose 27.52 percent Tuesday to close at $91.04; Actavis climbed 5 percent to $201.47.
Drugmakers at a glance
Forest Laboratories Inc.
Employment: 5,800 (including about 600 in Suffolk County)
Annual sales*: $3 billion
Annual loss*: $32 million
Key products: Alzheimer's drug Namenda; depression drug Lexapro
Founded: 1956; roots in Inwood
Headquarters: Dublin, Ireland
Employment: 17,700 (including about 200 in Copiague)
Annual sales*: $6 billion
Annual profit*: $97 million
Key products: generic medicines
Founded: 1956; formerly called Watson Pharmaceuticals
* Latest annual figures available for Forest Laboratories are as of March 31, 2013. Latest annual figures available for Actavis PLC are as of Dec. 31, 2012.
SOURCES: Securities filings; Newsday research