Pernix Acquires Cypress and Hawthorn - Analyst Blog
04 Januar 2013 - 7:15PM
Zacks
Pernix Therapeutics Holdings, Inc. (PTX)
recently announced that it has completed the acquisition of Cypress
Pharmaceuticals, Inc. and Hawthorn Pharmaceuticals.
Both the companies are privately
owned. While Cypress Pharma is a generic pharmaceutical company,
Hawthorn Pharma is a branded pharmaceutical company.
The acquisitions were announced
on November 14, 2012 but the terms of the payment were modified on
December 28, 2012.
As per the amended agreement,
Pernix will pay up to $102 million which includes an up-front
payment of $52.0 million in cash and $34.0 million in equity on
closing while $11 million will be paid in December 2013 along with
an additional milestone payment of $5 million.
Previously, Pernix was supposed
to pay up to $101 million which included an up-front payment of
$68.5 million in cash and $12.5 million in equity on closing
coupled with $11 million payable in December 2013 and an additional
$5 million in a milestone payment.
Pernix undertook a $42 million
credit facility to finance the acquisitions. Both Cypress Pharma
and Hawthorn Pharma are expected to generate sales of approximately
$50 million in 2012 consisting of approximately 54% generic
products and 46% branded products. On a consolidated basis, Pernix
now expects to generate approximately $135-$145 million of sales in
2013.
Cypress Pharma offers generic
products targeting the fields of cough and cold, nutritional
supplements, analgesics, urinary tract, women’s health, pre-natal
vitamins and dental health. Meanwhile, Hawthorn Pharma offers
branded pharmaceutical products for allergy, respiratory, iron
deficiency, nephrology and pain management.
Hence, the acquisitions will
widen Pernix’s portfolio in the respective arenas. Pernix currently
markets generic products through its wholly-owned subsidiary,
Macoven Pharmaceuticals.
Pernix has been active on the
acquisition front with the acquisition of Great Southern
Laboratories in July 2012 and the merger agreement to acquire
Somaxon Pharmaceuticals, Inc. (SOMX) for $25
million in December 2012.
We currently have a Neutral
recommendation on Pernix, which carries a Zacks #3 Rank (Hold).
Pharma stocks which currently look attractive are
Allergan, Inc. (AGN) with a Zacks #2 Rank
(Buy).
ALLERGAN INC (AGN): Free Stock Analysis Report
PERNIX THERAPTC (PTX): Free Stock Analysis Report
SOMAXON PHARMAC (SOMX): Free Stock Analysis Report
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