Although I think they have a strong case against Barr, I admit I am in a minority of just about one, and I wouldn't be disappointed if they did do a deal."Barr has a track record of settling patent disputes and did an innovative asset swap and licensing deal on contraceptive drugs with Galen in 2002 which meant the companies shared revenues from some of the disputed products.. The branded pharmaceutical industry, in its turn, has become more adept at protecting exclusivity for its high-margin products, and Shire filed additional patents on the way Adderall is made just days before the US law change that banned such moves.Shire shares jumped 41.5p to 681p yesterday.Robin Gilbert, at Numis, said: "A deal with Barr would be one of a number of strategies that can delay sales of Adderall from caving in during the first quarter of next year. Barr is first in line to launch a copycat version, after filing for regulatory approval in the US.Barr is a specialist in copycat, or generic, medicines and has become increasingly aggressive in its legal challenges to patents. The company, headed by Matt Emmens, says it believes its patents are valid and plans to mount a robust defence of its intellectual property.Shire is suing Barr for infringing patents it claims protect the way it has turned Adderall into a controlled-release drug, effective for up to 12 hours. A new anti-abuse drug, which Shire acquired at the beginning of this year, is due to be approved in the US around the middle of next year, but the City is expecting Shire to lose a court battle with Barr scheduled to start in January.
The company's shares surged to a three-year high as word spread that it is considering agreeing a deal with Barr Laboratories to halt a court battle over Adderall, the attention-deficit drug that accounts for almost half of Shire's revenues. An agreement would lift the uncertainty that has dogged Shire's prospects, and offers the possibility that it could save some revenues from Adderall to tide it over until it launches a new generation attention-deficit drug. Shire Pharmaceuticals, the FTSE 100 drug maker, is in talks that could head off a patent challenge to its most important product next year. Federated Department Stores, which owns Bloomingdale's and Macy's, agreed to buy its rival May, the owner of Lord & Taylor's and Marshall Field's, for $11bn in February.. Europe sales are still enjoying growth.A sale of Hilfiger, which has a market capitalisation of $1.5bn and is debt-free, would be the latest example of consolidation among retailers. The decline reflected the fact that US sales have slowed in clothing for men, women and children.
It has been restructuring over the past two years after closing most of its speciality stores and cutting back some of its wholesale distribution.The company, which started as a retailer of men's jeans and sportswear, has expanded to include clothes for women and children, as well as perfume, glasses, shoes and home furnishings.In its full year ended 31 March 2005, net revenues fell 5 per cent to $1.78bn. Both focus mainly on women's clothes and could use an acquisition of Hilfiger to get into menswear.Hilfiger, which has suffered from a decline in revenues, says on its website its clothes are meant to convey "the spirit of the American dream". The move comes after Hilfiger, which is based in Hong Kong, ended an 11-month federal investigation by agreeing last week to pay a total of $18.1m in back taxes and interest.The settlement removed a cloud that has hovered over the company since September, when news of the inquiry sent shares tumbling to below $9 a share from more than $14.Potential buyers include Jones Apparel, whose brands include Nine West and Anne Klein, and Liz Claiborne. Shares in Hilfiger shot up 15 per cent higher to $18.55 yesterday on various reports which said that while the initial approach did not result in a deal, the company will now consider bids from private-equity firms and other retailers. Hilfiger is understood to have hired JP Morgan to handle the auction The investment bank would not comment. The company, founded by the US designer of the same name, is understood to have been approached in the past few months by a potential buyer.