A brief report in the Israeli business daily, Globes, cites unnamed sources as saying that the big generic drugmaker is in talks to acquire Barr Pharmaceuticals for between $7 billion and $7.5 billion, assuming Teva Pharmaceuticals pays a premium of 35 percent to 40 percent. Barr has a market cap of about $5 billion, Globes notes.

Options trading in Barr was some 10 times the usual volume on Wednesday, according to Reuters, which adds that Barr August call options, which convey the right to buy Barr shares at prices of $50 and $55 apiece, were the most active. Barr stock closed at $46.82 yesterday.

Of course, there has been increasing consolidation among generic drugmakers as generic usage rises in response to patent expirations on brand-name meds. Earlier this year, Teva paid $400 million to buy CoGenesys and is expected to close soon on a deal to purchase Bentley Pharmaceuticals for about $350 million.

“Given Teva’s plans to boost revenue to $20 billion a year by 2012, we are not surprised by the report,” writes Phil Seligman, healthcare analyst at Standard & Poor’s, in a research note. “The acquisition, assuming approvals and consummation, would strengthen Teva’s Eastern Europe presence, give it an oral contraceptive market, and add 70 Abbreviated New Drug Applications, including first-to-file opportunities.”