Drug manufacturers are constantly looking for food offerings to grow their pipelines, but not all go as planned.
Consider nasty dispute between Teva Pharmaceuticals and two Mexican brothers, Fernando and Leopoldo Espinosa. During the past two weeks, they have filed lawsuits mourning after his $ 2.3 million was sour and now both sides are blaming the other by debris.
It was a move made last year by Teva, which is one of the largest manufacturers of generic drugs in the world, to expand in Mexico by buying Rimsa, one of the largest manufacturers of independent pharmaceutical products in the country, the Espinosa brothers. At that time, Teva acclaimed acquisition, which closed in March, as a larger in Latin America “significant platform for growth” in the second market.
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Now, Teva said that the brothers engaged in chicanery, maneuvers, and misrepresentations about their business in order to walk away with huge profits, according to their demand which was presented on Tuesday. Rimsa is “was involved in a scheme year to sell defective and illegal products and to conceal those violations of Mexican regulators.”
Meanwhile, the Espinosa denies the “baseless allegations.” As far as they’re concerned, Teva is suffering from a classic case of “buyer’s remorse” after failing to properly carry out due diligence, and as a result, “desperately” wants to return a “significant portion of the purchase price , “according to its September 13 demand .
The problems, according to Teva, surfaced shortly after the deal closed six months ago. An anonymous email was sent to the transition team integrating the two companies discussed alleged corruption, double paperwork, incomplete stability tests, and several irregularities in a plant in Guadalajara. This immediately sparked an investigation by Teva executives.
say they have subsequently discovered “rampant corruption.” In particular, Teva charges Rimsa “uses an elaborate scheme to avoid long-term legal requirements” for the presentation of product formulations regulators. “Instead of recording actual formulations for finished products, Rimsa composed of false formulations for not yet developed or tested products.”
In doing so, Teva accused Rimsa avoided costs of developing and testing products before submitting documentation to regulators. “Rimsa then launch fraudulently their real products under the guise of those invented formulations – although the actual products were often completely different,” Teva loaded on demand
The Teva demand continues to claim that Rimsa submitted fraudulent regulators on ingredients suppliers information and lied about laboratory tests, including tests of stability that should ensure the shelf-life indicated for each product was accurate and that the product It would remain stable, and therefore, safe and effective, according to demand.
There is a more interesting in demand reading 52 pages containing more specific details about the numerous allegations.
The Espinosa, meanwhile, argue that the board and management of Teva team is embarrassed and trying to compensate for lack of judgment. “The fact is that Teva completely misunderstood what I was buying and want to undo the transaction for any desperate measure, including making false accusations of fraud. He did not understand Rimsa companies or the Mexican market,” the lawsuit said.
“It’s over virtually the entire management team. Unilaterally ceased the production of most Rimsa products. It has destroyed the Rimsa companies and now wants his money back because, otherwise, Teva knows its management will accountable for its shareholders and other components for negligence and incompetence, “the lawsuit said.