Mylan will bolster its sales force ahead of the launch of the beta blocker nebivolol through a $4 bil. acquisition of King.

"Mylan looks forward to leveraging King's sales force for the expected launch of nebivolol," CEO Robert Coury said during a July 26 conference call.

King's "1,200-person sales force and marketing expertise drive the strong performance of their brands," Coury said.

King markets the ACE inhibitor Altace (ramipril) under a co-promotion agreement with Wyeth.

"With Altace in the market now and nebivolol in the pipeline, we expect to have two key cardiovascular products and be able to extend the opportunities of this very important franchise," Coury said.

Mylan believes the deal can be closed by year-end, ahead of the February user fee deadline for nebivolol.

The acquisition marks a significant expansion by Mylan into the branded arena.

Ahead of the deal, Mylan tapped former Wyeth VP-U.S. Sales Michael Marquard to fill the role of president of its branded division, Mylan Bertek (¹ Also see "Mylan Names Brand Business President" - Pink Sheet, 22 June, 2004.).

At Wyeth, Marquard played a key role in the Altace launch. Once again, he will oversee the product through the King/Wyeth co-promotion arrangement.

Mylan believes its operational experience will complement King's product portfolio and branded marketing expertise.

"Specifically, we will apply Mylan's financial, regulatory, manufacturing and compliance expertise to the combined businesses," Coury said.

The stock swap transaction is valued at $4 bil. based on Mylan's closing price of $18.51 on July 23; the deal calls for King stockholders to receive .9 Mylan shares for each King share.

The purchase price represents a 60% premium above King's July 23 market capitalization of $2.5 bil., but is less than half the company's peak market cap of over $10 bil. in 2001.

King has faced several challenges in recent months. The company is under investigation for Medicaid rebate underpayments related to Altace and has been plagued by significant inventory volatility for the antihypertensive (² Also see "King Wholesaler Agreements Planned To Stabilize Altace Inventory Levels" - Pink Sheet, 19 February, 2004.).

In addition, King's muscle relaxant Skelaxin (metaxalone) could face generic competition sooner than expected due to FDA's determination that ANDAs can "carve out" protected labeling on food effects (³ Also see "Skelaxin Generics May Launch Before July 2005: FDA To Allow Labeling "Carve Out"" - Pink Sheet, 12 March, 2004.).

In May, King CEO Jefferson Gregory resigned, marking the last member of the founding Gregory family to have a management role in the company (⁴ Also see "King Intensifying CEO Search; Gregory To Immediately Step Down" - Pink Sheet, 17 May, 2004.).

Mylan said it believes it is well equipped to face the challenges inherent in bringing two companies together as well as the specific issues that King is currently facing.

"Mylan has built a very strong management team with the breadth and depth of experience to address these types of challenges while executing on its strategies," Coury said.

- Lee Kalowski

Mylan To Pay $4 Bil. For King Ahead Of Launch Of Beta Blocker Nebivolol

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