PITTSBURGH – Generic drug maker Mylan Laboratories Inc. (MYL) and King Pharmaceuticals Inc. (KG), a branded drug maker, have agreed to call off their planned merger because they cannot agree on terms.
Mylan, based in Pittsburgh, had made a $4 billion all-stock offer in July to buy Bristol, Tenn.-based King. Mylan had a chance to negotiate new terms when King announced recently that it would have to restate earnings for 2002, 2003 and the first six months of 2004.
"Following discussions, the companies were not able to agree upon terms for a revised transaction," the companies said in an announcement Sunday night.
A King spokesman did not immediately return a call for comment Monday, but the Tennessee company issued a statement saying it was "repositioned for growth" and made no mention of Mylan.
"With the addition of new talent and rigorous new acquisition criteria, King is working to strengthen the company's portfolio," the statement said. "By sensibly adding products with significant growth potential and divesting underperforming assets, King expects to improve the company's long-term prospects and build value for its shareholders."
Mylan did not return phone messages Sunday night seeking further comment.
In trading Monday, Mylan shares rose 43 cents, or 2.5 percent, to $17.37 on the New York Stock Exchange (search), while King shares fell 69 cents, or 6.7 percent, to $9.56. Mylan shares have traded in a 52-week range of $14.24 to $24.95. King shares have traded in a 52-week range of $10.01 to $20.22.
Wall Street has been sour on the King deal from the start, with Mylan's shares falling 20 percent on the news of the planned acquisition.
Billionaire investor Carl Icahn (search), Mylan's second-largest shareholder, had been a prominent opponent of the merger and sued to block recently amended corporate bylaws at Mylan that aimed to expedite it. Efforts to reach Icahn Associates Corp. for comment Sunday were not successful.
Mylan officials at the time said Icahn did not have a solid plan for the company.
Mylan announced Friday a delay in any approval to market the company's blood pressure medication Nebivolol, a key part of the proposed King acquisition. Officials said King's 1,200-person sales force would be used to market the hypertension drug.
The FDA had asked for a new presentation of Mylan's clinical data on more than 2,000 patients with high blood pressure, which could result in a delay of up to 90 days. Mylan officials said they hoped the delay would not be that long and didn't consider it a setback.
Mylan announced a March 10 conference call to provide investors with financial guidance and an update on Nebivolol.