Monday, March 13, 2006

Hit #86

Generic drugs company Andrx (ADRX) is being acquired by Watson Pharmaceuticals for $1.9 billion in cash. The offer, of $25/share, is a premium of 30% to my average cost per share of $19.23.

I had sold a part of my holdings earlier at around $27/share.
Watson (WPI) itself would be a target in the not so distant future.

I had mentioned Andrx as a speculative target in an earlier post on Ivax's acquisition by TEVA.

The consolidation in the generics sector isn't over yet, though most of the smaller players have now been acquired over the last year. One player that looks attractive after its recent large pullback is Impax Laboratories (IPXL). I own a few shares, and plan to add at current levels. Another small player, Caraco Pharmaceutical Labs (CPD) is already majority owned by Indian drug manufacturer, Sun Pharma. At some point it will make an offer for the part that it doesn't own. Shares have gained almost 100% since I bought them a few months ago.

Previous hit - Lexar (#85)


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