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Watson Offers $1.9B for Andrx

Watson Pharmaceuticals Inc. said Monday that it plans to spend $1.9 billion to buy Andrx Corp., a Davie, Fla.-based rival.

Watson, a drug maker with headquarters just across the county line in Corona, said it signed a definitive deal to buy Andrx for about $25 a share, or 16% above Andrx’s closing price on Friday.

The deal would create the third-largest U.S.-based generic drug company, Watson said. Shares of Watson were down 3% to $28.65 in afternoon trading Monday.

Watson makes generic and name brand drugs. Watson said the combined company would have a much bigger product pipeline that includes 60 regulatory applications filed to produce generic versions of current private label drugs.

Watson’s deal to buy Andrx comes roughly a month after it released fourth-quarter results that disappointed Wall Street.

Andrx, meanwhile, said that it was having some problems with the Food and Drug Administration over its manufacturing plants.

The company’s third-quarter sales were lower than a year earlier and short of Wall Street expectations. But Andrx recently won some patent rulings, including one against AstraZeneca PLC. The ruling that paves the way for Andrx to make a generic version of AstraZeneca’s heart drug Toprol XL was appealed by the British drug maker.

Watson has a rather prominent Orange County tie,Allen Chao, the drug maker’s founder and chief executive. Chao lives in Anaheim Hills and has made big donations to the University of California, Irvine.

The Chao Family Comprehensive Cancer Center at UCI is named after the executive and members of his family.

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