If your revenues live by the generic sword, they can die by it, too. That seems to be the case today for Barr Pharmaceuticals
Due primarily to this loss of sales exclusivity, and the entrance of other generic competitors, sales of generic products were down 5% year over year to $198 million. That hurt overall revenues, since this division accounted for 61% of Barr's total revenues for the quarter. Things should improve in the coming quarters for Barr's generic division; it has exclusivity on a just-launched generic version of Cephalon's
Sales of its proprietary products were a much brighter spot for Barr this quarter, rising 73% to more than $100 million. Sales should continue to grow strongly with the acquisition of one version of Shire's
The other big announcement this quarter was the closing of the Pliva deal, for which Barr will take on more than $2 billion in debt. The company would be well-served to start paying this off soon, even though most of the debt is at low rates. The acquisition offers some compelling opportunities, including an expansion into Pliva's European operations for Barr's proprietary and generic products, and synergies from the movement of operations into some of Pliva's lower-cost facilities.
From the perspective of its sales and earnings numbers, Barr's third quarter was not particularly exciting. But in the longer term, Barr made good strides in ensuring that its future prospects remain strong.
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