This drugmaker spent 2 years trying to buy another company -- and now that it has, its shares are crashing

Epi PenGreg Friese via FlickrAn EpiPen, one of Mylan’s core products.

Mylan, the generic drugmaker, has had its eye on a multi-billion takeover for a long time.

Last year the company went after Perrigo, a company that makes over-the-counter medications, with a $26 billion offer.

Perrigo’s shareholders didn’t bite.

In 2014, it also failed in its effort to acquire Sweden’s Meda Pharmaceuticals for almost $7 billion.

But despite the effort to strike a big deal, when Mylan actually reached an agreement investors were not pleased. Mylan is going to acquire Meda after all.

It will pay $7.2 billion for the maker of allergy medications. It’s a price that might’ve been acceptable in years past, when stock prices were soaring and drugmakers were on a buying spree.

But for shareholders in 2016 that price just is too high. Mylan’s paying nearly twice what Meda’s shares were trading for before the deal was announced.

So Mylan’s shares are crashing. They’re down nearly 20% this morning following the deal news, and word that sales of its EpiPen — a device that treats severe allergic reactions — were lower than expected.

UBS analysts explained:

“It seems that many investors were long into the quarter, assuming a beat driven by EpiPen, but instead got a 4Q slight miss and a deal that is clearly not inexpensive while the macro environment is looking more volatile and uncertain,” the analysts wrote in an investor note. “If Mylan would have done this deal at this valuation a year ago, it probably would have been well received, but the spec pharma sentiment has turned negative.”

Here’s how far the stock tumbled on Thursday morning.

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