Teva Pharmaceutical offers $6.8 billion for Cephalon

Teva Pharmaceutical Industries, seeking to expand its specialty drug portfolio, plans to acquire Cephalon Inc. for $6.8 billion.

Teva, which is based in Israel, has a large manufacturing plant in Irvine. That plant resumed operation in April after closing for a year following a warning by the Food and Drug Administration over quality-control problems.

Sales of Copaxone, used in the treatment of multiple sclerosis, constituted about 30% of Teva’s earnings in recent years, said Judson Clark, a healthcare analyst with Edward Jones & Co.

That dominance has been threatened recently by new multiple sclerosis drugs from rival companies, Clark said.

“There have been a number of areas where Teva is facing increased competition,” Clark said. “To the extent that it’s possible, it hopes to reduce the impact of Copaxone on its earnings.”

Cephalon, based in Frazer, Pa., is known for making Nuvigil and Provigil, both used in the treatment of narcolepsy.

Teva said in a statement that the two companies would have about $7 billion in combined sales.

Recently, Cephalon spurned a hostile takeover attempt by Canada-based Valeant Pharmaceuticals International Inc.

Teva offered Cephalon stockholders $81.50 a share, 12% more than Valeant’s offer of $73.

Teva has about 40,000 employees and Cephalon has about 4,000.

Teva spokeswoman Denise Bradley declined to comment about the possibility of layoffs once the takeover was complete. She also would not speculate about the future of Teva’s plant in Irvine.

“It’s too early to comment on that at this time,” Bradley said.

The deal, which is subject to approval by Cephalon shareholders, is expected to close in the second half of the year.

U.S.-traded shares of Teva increased 3.4% to $47.27 on Monday. Cephalon stock rose 4% to $80.11. Valeant shares fell 5.8% to $49.58.

shan.li@latimes.com