Summary

Other Scenarios:

Buyer: West Pharmaceutical Services Inc. (WST) Last Price: 45.75 Market Cap.: 1.51B
Target: Penwest Pharmaceuticals (PPCO) Last Price: 10.13 Market Cap.: 233.43M

Lines of Business Summary:

Product Summary:

Overlap & Complementary Sectors

Sector Buyer Target # of Focused Companies
*Healthcare 874
Biopharmaceuticals 331
Medical Devices   247
Outsourced Services 65
Scientific Products   40

- Focused. Denotes that the company is considered focused in this area. In general, Focused Companies draw the majority of their earnings in the sector/product area specified.

- Sector Pure-Plays. Denotes that the company is focused in the selected sector and generates nearly all earnings in the sector/product area specified.

- Sector Participation. Denotes that the company develops products in this line of business.

Sample Products in Similar Lines of Business

Sample Products in Complementary Lines of Business
Buyer (Total: 28)
  • Contract Laboratory Services
  • LyoTec Stoppers
  • Targit Gastroretentive System
  • ChiSys Chitosan Nasal Technology (Solution)
Target (Total: 12)
  • Geminex
  • TIMERx
  • SyncroDose
  • Gastroretentive Drug Delivery System
Buyer
  • Targit Budesonide
  • Nasal Granisitron
  • ChiSys Insulin
  • ChiSys Nasal Influenza Vaccine
Target
  • Procardia XL (Nifedipine)
  • PW2132 (Torsemide ER)
  • PW4110
  • PW4153

Business Relationship Summary:

Top Key Suppliers

Top Key Customers
Buyer (Total: 1)
  • American Software, Inc. (AMSWA)
Target (Total: 2)
  • Mylan Laboratories Inc. (MYL)
  • DRAXIS Health Inc. (USA) (DRAX)
Buyer (Total: 3)
  • Becton, Dickinson and Co. (BDX)
  • Nektar Therapeutics (NKTR)
  • DexCom, Inc. (DXCM)
Target (Total: 4)
  • Mylan Laboratories Inc. (MYL)
  • sanofi-aventis (ADR) (SNY)
  • Endo Pharmaceuticals (ENDP)
  • E Merck

Key Financial Summary:

Key Metrics

  Buyer Target
Number of Employees 6,323 72
Revenue Per Employee 147,175.4 41,255.9
Total Revenue 231.9 0.7
Total Expenses 210.9 10.2
Other Revenue 0.0 0.0
Cost of Revenue 166.3 0.1
SG&A Expense 43.9 3.6
Research & Development 0.0 6.4
Other Operating Expense 0.7 0.0
Operating Income 21.0 -9.4
Unusual Income 0.0 0.0
LT Debt to Capital 36.26 n/a
Fwd P/E 20.35 -6.71
Fwd P/Rev n/a 61.54
Book Value 414.5 n/a
Curr Portion of LTD/Cap Lease 0.0 n/a

Individual Company Summary

Focused

Buyer

Focused (): *Healthcare > Outsourced Services > Development/Manufacturing Services > Packaging Services

Target

Focused (): *Healthcare > Outsourced Services > Drug Delivery Technology > Oral Delivery

Business Description

Buyer

West Pharmaceutical Services, Inc. (West), incorporated on July 27, 1923, is a manufacturer of components and systems for injectable drug delivery, and plastic packaging and delivery system components for the healthcare, personal care and consumer products markets. The Company's products include stoppers and seals for vials, and components used in syringes, intravenous delivery systems, and blood collection and diagnostic systems. Its customers include pharmaceutical, biotechnology, generic drug and medical-device producers. West operates in two business segments: Pharmaceutical Systems and Tech Group. The Pharmaceutical Systems segment designs, manufactures and distributes a variety of elastomer and metal components used in parenteral drug delivery for pharmaceutical, generic and biopharmaceutical industries. On May 20, 2005, West acquired The Tech Group, Inc. On February 11, 2005, it acquired Monarch Analytical Laboratories, Inc.

Target

Penwest Pharmaceuticals Co. (Penwest) develops pharmaceutical products based on drug delivery technologies. The Company is focusing its development efforts principally on products that address disorders of the nervous system. The advanced product in Penwest's drug development pipeline is oxymorphone ER, an extended release formulation of oxymorphone that it is developing with Endo Pharmaceuticals Inc. (Endo). Penwest is also developing several additional product candidates designed for the treatment of depression, pain, epilepsy and Parkinson's disease, as well as a product candidate designed for the treatment of edema resulting from congestive heart failure. The Company conducts its business primarily in North America.

Deal Summary

Key Ratios

  Buyer Target
Gross Margin % 28.67 93.4
Operating Margin % 10.41 -962.1
Quick Ratio 1 n/a
Current Ratio 1.8 n/a
Coverage Ratio -0.11 -0.07
Total Assets 918.2 n/a
Return on Equity % 14.45 n/a
Return on Assets % 6.52 n/a
Cash+ ST Inv. Per Share 1.4 n/a
Total Debt 236.3 0.0
Total Debt to Equity % 57.01 n/a
Total Debt to Tangible Equity % 96.29 n/a
Debt to Asset % 25.74 n/a

Product Summary

Sector Buyer Target
*Healthcare
Biopharmaceuticals
Cardiovascular System
The Cardiovascular System Subsector includes therapeutics that treat disorders affecting the heart and blood vessels.
  
Digestive System
The Digestive System Subsector includes therapeutics that treat disorders affecting the digestive system.
  
Endocrinology/Metabolism
The Endocrinology/Metabolism Subsector includes therapeutics that treat metabolic disorders and conditions resulting from the dysfunction of hormone secreting glands.
  
Immunology
The Immunology Subsector includes therapeutics that treat disorders affecting the immune system.
  
Infectious Diseases
The Infectious Diseases Subsector includes therapeutics that treat diseases caused by the invasion and reproduction of microorganisms in the body.
  
Musculoskeletal System
The Musculoskeletal System Subsector includes therapeutics that treat disorders of the bones, joints, ligaments, tendons, and soft tissue involved with them.
  
Neurology
The Neurology Subsector includes therapeutics that treat disorders of the central nervous system, including the brain, spinal cord, and nerves.
  
Obstetrics/Gynecology
The Obstetrics/Gynecology Subsector includes therapeutics that treat female genital disorders, pregnancy, and childbirth.
  
Oncology
The Oncology Subsector includes therapeutics that treat and manage various types of cancer and related complications.
  
Pain Management
The Pain Management Subsector includes therapeutics that treat and management pain.
Medical Devices  
Drug Delivery
The Drug Delivery Subsector includes medical devices that facilitate the delivery of medications through different anatomical entryways, including blood vessels, skin, the mouth, and the lungs. Common devices in this sector include vascular access catheters, needles, implants, and inhalers.
  
Outsourced Services
Analytical Services
The Analytical Services Subsector includes outsourced services that utilize analytical instruments to analyze biological and chemical samples.

Buyer Products:

  • Contract Laboratory Services
  
Development/Manufacturing Services
The Development/Manufacturing Services Subsector includes companies that provide research, development, manufacturing, sales and marketing to biopharmaceutical and medical device companies.
  
Drug Delivery Technology
The Drug Delivery Technology Subsector includes companies that develop novel delivery methods for therapeutics.
Scientific Products  
Consumables
The Consumables Subsector includes chemicals, reagents, standards, media, and disposable labware that are normally depleted or worn out by continuous use.
  
General Laboratory Equipment
The General Laboratory Equipment Subsector includes products that are used during routine laboratory procedures, such as sample preparation, processing, storage, cleaning, and purification.
  

- Focused. Denotes that the company is considered focused in this area. In general, Focused Companies draw the majority of their earnings in the sector/product area specified.

- Sector Pure-Plays. Denotes that the company is focused in the selected sector and generates nearly all earnings in the sector/product area specified.

- Sector Participation. Denotes that the company develops products in this line of business.

Product Details

Sector Buyer Target
*Healthcare
Biopharmaceuticals
Cardiovascular System  
Heart Disorders  
Angina  
Calcium Channel Blocking Agents
Therapeutics that treat chest pains by preventing the entry of calcium into heart muscle cells.

Target Products:

  • Procardia XL (Nifedipine)
  
Phase I/Phase II Clinical Stage Products
Therapeutics that are being investigated for the treatment of heart and circulatory system disorders in early stages of clinical research where human subject is involved.

Target Products:

  • PW2132 (Torsemide ER)
  
Vascular Disorders  
Hypertension  
Calcium Channel Blocking Agents
Therapeutics that treat high blood pressure by blocking the beta adrenergic receptors of the heart muscle and increasing the excretion of sodium ions, potassium ions, and water through urine.

Target Products:

  • Procardia XL (Nifedipine)
  
Digestive System  
Phase I/Phase II Clinical Stage Products
Therapeutics that are being investigated for the treatment of digestive disorders in early stages of clinical research where human subject is involved.

Buyer Products:

  • Targit Budesonide
  
Research/Preclinical Stage Products
Therapeutics that are being investigated for the treatment of digestive disorders in very early stages of research where no human subject is involved.

Buyer Products:

  • Nasal Granisitron
  
Endocrinology/Metabolism  
Phase I/Phase II Clinical Stage Products
Therapeutics that are being investigated for the treatment of endocrinology disorders in early stages of clinical research where human subject is involved.

Buyer Products:

  • ChiSys Insulin
  
Immunology  
Phase I/Phase II Clinical Stage Products
Therapeutics that are being investigated for the treatment of immune disorders in early stages of clinical research where human subject is involved.

Buyer Products:

  • Targit Budesonide
  
Infectious Diseases  
Phase I/Phase II Clinical Stage Products
Therapeutics that are being investigated for the treatment of infectious diseases in early stages of clinical research where human subject is involved.

Buyer Products:

  • ChiSys Nasal Influenza Vaccine
  • Nasal Diphtheria & Tetanus
  
Musculoskeletal System  
Phase I/Phase II Clinical Stage Products
Therapeutics that are being investigated for the treatment of skeletal system disorders in early stages of clinical research where human subject is involved.

Buyer Products:

  • ChiSys PTH
  • ChiSys Calcitonin
  
Neurology  
Phase I/Phase II Clinical Stage Products
Therapeutics that are being investigated for the treatment of nervous system and mental disorders in early stages of clinical research where human subject is involved.

Target Products:

  • PW4110
  
Research/Preclinical Stage Products
Therapeutics that are being investigated for the treatment of nervous system and mental disorders in very early stages of research where no human subject is involved.

Target Products:

  • PW4153
  • PW4150
  • PW4158
  
Obstetrics/Gynecology  
Phase I/Phase II Clinical Stage Products
Therapeutics that are being investigated for the treatment of female reproductive disorders in early stages of clinical research where human subject is involved.

Buyer Products:

  • ChiSys Leuprolide
  
Oncology  
Phase I/Phase II Clinical Stage Products
Therapeutics that are being investigated for the treatment and management of cancer in early stages of clinical research where human subject is involved.

Buyer Products:

  • ChiSys Leuprolide
  
Research/Preclinical Stage Products
Therapeutics that are being investigated for the treatment and management of cancer and are currently in an early research or preclinical stage of development.

Buyer Products:

  • ChiSys Taxane
  
Pain Management
Narcotics  
Opioids
Therapeutics that treat pain by binding to certain nervous system receptors which alter both the perception of pain as well as the emotional response to pain.

Target Products:

  • Opana ER (Oxymorphone Hydrochloride Extended Release)
  
Phase I/Phase II Clinical Stage Products
Therapeutics that are being investigated for the treatment of pain in early stages of clinical research where human subject is involved.

Buyer Products:

  • ChiSys Fentanyl
  • Nasal NSAID
  • ChiSys Morphine
  • Nasal Ketoprofen
  • Nasal Morphine -6 -Glucuronide

Target Products:

  • PW4142 (Nalbuphine ER)
Research/Preclinical Stage Products
Therapeutics that are being investigated for the treatment of pain in very early stages of research where no human subject is involved.

Buyer Products:

  • ChiSys Midazolam
  • ChiSys NSAID
  
Medical Devices  
Drug Delivery  
Percutaneous (Subcutaneous/Intramuscular/Intravenous)  
Needleless  
Disposable  
Intravenous (I.V.)
Disposable needles designed to deliver medications and fluid solutions to the venous blood of patients

Buyer Products:

  • Flashback Bulbs
  
Syringes  
Specialty  
Prefillable
Syringes designed for the advanced loading and storage of medications prior to use

Buyer Products:

  • Clip'n'Ject
  
Outsourced Services
Analytical Services
The Analytical Services Subsector includes outsourced services that utilize analytical instruments to analyze biological and chemical samples.

Buyer Products:

  • Contract Laboratory Services
  
Development/Manufacturing Services  
Packaging Services
Outsourced companies that provide packaging services for healthcare products.

Buyer Products:

  • Contract Laboratory Services
  • LyoTec Stoppers
  
Drug Delivery Technology
Oral Delivery
Hydrogel Based/Polymer Coated
Drug Delivery Technologies used to deliver drugs in a jelly like base which are enclosed using a polymer matrix.

Target Products:

  • Geminex
  • TIMERx
  • SyncroDose
  
Polymer Coated
Drug Delivery Technologies used to deliver drugs in a polymer based matrix to hold/enclose the drug.

Buyer Products:

  • Targit Gastroretentive System

Target Products:

  • Gastroretentive Drug Delivery System
Pulmonary Delivery  
Liquid
Drug Delivery Technology used to deliver drugs in a fine solution containing drugs for deep lung delivery.

Buyer Products:

  • ChiSys Chitosan Nasal Technology (Solution)
  
Powder
Drug Delivery Technology used to deliver drugs in a powder of hollow, porous spheres containing drugs for deep lung delivery.

Buyer Products:

  • ChiSys Chitosan Nasal Technology (Powder/Microsphere)
  
Scientific Products  
Consumables  
General Laboratory  
Vials/Stoppers
General laboratory consumables which are glass or plastic containers used to store and to prevent spilling of samples.

Buyer Products:

  • LyoTec Stoppers
  • Daikyo Resin CZ
  • Stoppers
  • Westar RS(Ready To Sterilize)/RU(Ready To Use)
  • Aluminum Seals For Vials
  
General Laboratory Equipment  
Labware  
Plasticware
General labware products that are made from plastic.

Buyer Products:

  • Plastic Containers
  

- Focused. Denotes that the company is considered focused in this area. In general, Focused Companies draw the majority of their earnings in the sector/product area specified.

- Sector Pure-Plays. Denotes that the company is focused in the selected sector and generates nearly all earnings in the sector/product area specified.

- Sector Participation. Denotes that the company develops products in this line of business.

Relationship Details

Key Competitors

  Name Dir Percent Market Cap. P/E Ratio (TTM) Fwd P/E P/R Ratio (TTM) Fwd P/Rev Price To Tang. Book Value
Target
  Johnson & Johnson n/a 175,174.320 15.85 15.53 3.29 2.96 16.48
Wyeth n/a 67,872.571 16.17 14.70 3.34 3.16 6.54
Elan Corporation, plc (ADR) n/a 6,273.957 n/a -23.71 11.20 7.76 n/a
Biovail Corporation (USA) n/a 3,498.059 17.15 12.37 3.27 4.20 7.18
Watson Pharmaceuticals, Inc. n/a 2,663.988 n/a 21.11 1.35 1.03 250.68
K-V Pharmaceutical Company n/a 1,171.877 24.65 n/a 3.08 n/a 4.73
Ligand Pharmaceuticals Inc. n/a 1,061.597 n/a -53.00 7.53 39.16 n/a
Alpharma Inc. n/a 1,053.404 12.76 17.85 1.61 1.50 3.02
SkyePharma PLC (ADR) n/a 312.058 n/a n/a 3.18 n/a n/a
SCOLR Pharma Inc. n/a 88.612 n/a n/a 38.89 n/a 5.22
BioDelivery Sciences International, Inc. n/a 76.360 n/a -5.04 26.99 27.98 n/a
Elite Pharmaceuticals, Inc. n/a 47.211 n/a -8.18 68.23 n/a 7.26
Purdue Pharma L.P. n/a n/a n/a n/a n/a n/a n/a

- Defined by the Company - Defined by Others

Dependent Suppliers

  Name Dir Percent Market Cap. P/E Ratio (TTM) Fwd P/E P/R Ratio (TTM) Fwd P/Rev Price To Tang. Book Value
Buyer
  American Software, Inc. n/a 218.558 32.33 25.40 2.65 2.60 3.52
Target
  Mylan Laboratories Inc. n/a 4,482.149 12.95 13.61 3.09 3.02 4.94
DRAXIS Health Inc. (USA) n/a 260.344 22.55 23.92 2.93 2.78 2.85

- Defined by the Company - Defined by Others

Key Customers

  Name Dir Percent Market Cap. P/E Ratio (TTM) Fwd P/E P/R Ratio (TTM) Fwd P/Rev Price To Tang. Book Value
Buyer
  Becton, Dickinson and Co. 11.00% 18,434.810 27.22 20.23 3.15 2.96 5.88
Nektar Therapeutics n/a 1,125.100 n/a -10.03 5.17 5.32 7.76
DexCom, Inc. n/a 206.131 n/a -4.24 95.05 13.68 3.63
Target
  Mylan Laboratories Inc. 63.00% 4,482.149 12.95 13.61 3.09 3.02 4.94
sanofi-aventis (ADR) n/a 117,214.634 12.67 12.80 3.02 3.12 n/a
Endo Pharmaceuticals n/a 3,873.273 28.10 17.40 4.26 3.76 4.95
E Merck n/a n/a n/a n/a n/a n/a n/a

- Defined by the Company - Defined by Others

Key Partners

  Name Dir Percent Market Cap. P/E Ratio (TTM) Fwd P/E P/R Ratio (TTM) Fwd P/Rev Price To Tang. Book Value
Buyer
  Watson Pharmaceuticals, Inc. n/a 2,663.988 n/a 21.11 1.35 1.03 250.68
Omrix Biopharmaceuticals, Inc. n/a 647.055 28.06 38.45 10.15 11.86 6.73
Javelin Pharmaceuticals Inc. n/a 272.721 n/a -7.14 323.20 252.62 14.96
DexCom, Inc. n/a 206.131 n/a -4.24 95.05 13.68 3.63
Daikyo Seiko, Ltd. n/a n/a n/a n/a n/a n/a n/a
Target
  sanofi-aventis (ADR) n/a 117,214.634 12.67 12.80 3.02 3.12 n/a
Mylan Laboratories Inc. n/a 4,482.149 12.95 13.61 3.09 3.02 4.94
Endo Pharmaceuticals n/a 3,873.273 28.10 17.40 4.26 3.76 4.95
DRAXIS Health Inc. (USA) n/a 260.344 22.55 23.92 2.93 2.78 2.85
E Merck n/a n/a n/a n/a n/a n/a n/a
Prism Pharmaceuticals, Inc. n/a n/a n/a n/a n/a n/a n/a

- Defined by the Company - Defined by Others

Financials

  Buyer Target Combined Entity
Income Statement
Operating Items
Revenue 913.3 3.5 916.8
Other Revenue 0.0 0.0 0.0
Total Revenue 913.3 3.5 916.8
Cost of Revenue 651.5 0.2 651.7
SG&A Expense 155.9 14.1 170.0
Depreciation & Amortization 0.0 0.0 0.0
Research & Development 0.0 22.9 22.9
Interest Expense 0.0 0.0 0.0
Other Operating Expense 4.9 0.0 4.9
Unusual Expense (Income) 5.9 0.0 5.9
Total Expenses 818.2 37.2 855.4
Operating Income 95.1 -33.7 61.4
Non Operating Items
Interest Expense (Inc.), Net Non-Oprtng -10.6 2.4 -8.2
Other, Net 0.0 0.0 0.0
Income Before Taxes 84.5 -31.3 53.2
Income Taxes 24.6 0.0 24.6
Income After Taxes 59.9 -31.3 28.6
Minority Interest (IS) -0.3 0.0 -0.3
Equity in Affiliates 1.9 0.0 1.9
Net Income - Excl. Xord. Items 61.5 -31.3 30.2
Discontinued Operations 5.6 0.0 5.6
Net Income - Incl. Xord. Items 67.1 -31.3 35.8
Income Avail. to Common 67.1 -31.3 35.8
Share Items
Basic Avg. Shares Outstanding 32.7 23.0 55.8
Basic EPS - Excl. Xord. Items 1.88 n/a 0.54
Basic EPS - Incl. Xord. Items 2.05 n/a 0.64
Full Dilution Adjustment 0.0 0.0 0.0
Fully Diluted Shares Outstanding 33.7 23.0 56.7
F.D. EPS - Excl. Xord. Items 1.83 n/a 0.53
F.D. EPS - Incl. Xord. Items 1.99 n/a 0.63
Dividends Per Common Share 0.50 0.00 0.50
Balance Sheet
Assets
Cash and Equivalents 47.1 n/a 47.1
Accounts Receivable 110.5 n/a 110.5
Inventory 97.5 n/a 97.5
Other Current Assets 26.6 n/a 26.6
Current Assets 281.7 n/a 281.7
PPE 757.4 n/a 757.4
Accum D&A -372.7 n/a -372.7
PPE, Net 384.7 n/a 384.7
Goodwill & Intangibles 169.1 n/a 169.1
Long Term Investments 29.7 n/a 29.7
Other Assets 0.0 n/a 0.0
Other LT Assets 53.0 n/a 53.0
Total Assets 918.2 n/a 918.2
Liabilities
Accounts Payable 61.2 n/a 61.2
Payable/Accrued 0.0 n/a 0.0
Accrued Expenses 35.3 n/a 35.3
ST Debt 0.5 n/a 0.5
Other (Current) Liabilities 59.9 n/a 59.9
Current Liab. 156.9 n/a 156.9
LT Debt 235.8 n/a 235.8
Total LT Debt 235.8 n/a 235.8
Minority Interest (BS) 4.8 n/a 4.8
Deferred Taxes 43.5 n/a 43.5
Other LT Liab. 62.7 n/a 62.7
Total Liabilities 503.7 n/a 503.7
Shareholders Equity
Common Stock 8.6 n/a 8.6
Additional Paid in Capital 52.8 n/a 52.8
Retained Earnings 375.7 n/a 375.7
Treasure Stock -33.2 n/a -33.2
Other Equity 10.6 n/a 10.6
Total Equity 414.5 n/a 414.5
Total Liab. & Equity 918.2 n/a 918.2
Shares Outstanding 32.9 n/a 32.9
Cash Flow
Operating Cash Flow
CF Net Income 67.1 n/a 67.1
CF Depreciation 48.1 n/a 48.1
CF Amortization 4.6 n/a 4.6
CF Deferred Taxes 0.0 n/a 0.0
Other Non-Cash Items 29.2 n/a 29.2
Change in Working Capital -5.2 n/a -5.2
Total Cash From Operating Activities 143.8 n/a 143.8
Investing Cash Flow (not calculated)
Capital Expenditures -90.3 n/a -90.3
Other Investing Cash Flows 0.2 n/a 0.2
Total Cash From Investing Activities -89.9 n/a -89.9
Financing Cash Flow (not calculated)
Dividends Paid -15.9 n/a -15.9
Purchase Or Sale of Stock 4.4 n/a 4.4
Purchase and Retirement of Debt -59.7 n/a -59.7
Other Financing Cash Flow 10.9 n/a 10.9
Total Cash From Financing Activities -60.2 n/a -60.2
Exchange Rate Effects 4.6 n/a 4.6
Net Change in Cash -1.7 n/a -1.7
Cash Taxes Paid 15.0 n/a 15.0
Cash Interest Paid 14.0 n/a 14.0