Summary

Other Scenarios:

Buyer: PRA International (PRAI) Last Price: 29.75 Market Cap.: 734.42M
Target: DRAXIS Health Inc. (USA) (DRAX) Last Price: 5.24 Market Cap.: 220.38M

Lines of Business Summary:

Product Summary:

Overlap & Complementary Sectors

Sector Buyer Target # of Focused Companies
Healthcare 932
Biopharmaceuticals   377
Neurology   34
Healthcare Services   153
Support Services   42
Medical Devices   256
Radiology   14
Outsourced Services 69
Development/Manufacturing Services 35
Technology   1,040
Software   310
Industry-Specific   100

- 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: 11)
  • Early Development Services
  • PRA International Clinical Pharmacology Center
  • Global Medical And Safety Services
  • Clinical Trials Management Services
Target (Total: 14)
  • Draxis Pharma Inc.
Buyer
  • Global Regulatory Affairs Group
  • Global Product Development Services
  • PRA Clinical Data Manager And Oracle Clinical
  • Flex DMS
Target
  • DRAXIMAGE I-131 Sodium Iodide Capsules
  • DRAXIMAGE Iobenguane I-131 Injection/131 I-metaiodobenzylguanidine (I-131MIBG)
  • Technetium (Tc 99m) Generators
  • DRAXIMAGE Tc 99 MarcoAggregated Albumin Kit (MAA)

Business Relationship Summary:

Top Key Suppliers

Top Key Customers
Buyer (Total: 1)
  • ePlus Inc. (PLUS)
Target (Total: 4)
  • Genzyme Corporation (GENZ)
  • MDS Inc. (USA) (MDZ)
  • BTG plc (BTG:GB)
  • Chinoin Pharmaceutical Company
Buyer (Total: 1)
  • Biomira Inc. (USA) (BIOM)
Target (Total: 8)
  • GlaxoSmithKline plc (ADR) (GSK)
  • Genzyme Corporation (GENZ)
  • Pfizer Inc. (PFE)
  • Johnson & Johnson (JNJ)

Key Financial Summary:

Key Metrics

  Buyer Target
Number of Employees 2,700 404
Revenue Per Employee 153,769.4 194,904.0
Total Revenue 103.5 19.4
Total Expenses 103.1 16.9
Other Revenue 0.0 0.0
Cost of Revenue 63.2 11.7
SG&A Expense 36.1 3.2
Research & Development 0.0 0.7
Other Operating Expense 0.0 0.0
Operating Income 0.4 2.5
Unusual Income 0.0 0.0
LT Debt to Capital 0.02 0
Fwd P/E 34.58 26.45
Fwd P/Rev 2.06 2.57
Book Value 266.4 106.1
Curr Portion of LTD/Cap Lease 0.0 0.0

Individual Company Summary

Focused

Buyer

Focused (): Healthcare > Outsourced Services > Development/Manufacturing Services > Contract Research Organizations (CRO) > Limited Service

Target

Focused (): Healthcare > Outsourced Services > Development/Manufacturing Services > Contract Manufacturing Organizations (CMO) > Pharmaceuticals > Final Dosage Forms

Business Description

Buyer

PRA International is a global contract research organization. It conducts clinical trials globally and serves the pharmaceutical and biotechnology companies to conduct clinical trials in multiple geographies. It performs an array of services across the spectrum of clinical development programs, from the filing of investigational new rug applications, and similar foreign regulatory applications, to the conduct of all phases of clinical trials, to product registration and post-marketing studies. Its global clinical development services include creating drug development and regulatory strategy plans, utilizing bioanalytical laboratory testing, executing Phase I clinical trials, performing Phase II through IV multi-center, international clinical trials, developing and analyzing integrated global clinical databases, preparing and submitting regulatory filings around the world, and managing long-term drug safety programs. On July 21, 2006, it acquired Pharma-Bio Research Metaholdings B.V.

Target

DRAXIS Health Inc. (DRAXIS) is a specialty pharmaceutical company providing products in three categories: sterile products, non-sterile products and radiopharmaceuticals. Sterile products include liquid and freeze-dried (lyophilized) injectables and sterile ointments. Non-sterile products are produced as solid oral, liquid and semi-solid dosage forms. Radiopharmaceuticals are used for both therapeutic and diagnostic molecular imaging applications. As of January 1, 2005, all of the operations of the Company are carried out through its wholly owned subsidiary DRAXIS Specialty Pharmaceuticals Inc., which operates two divisions, DRAXIS Pharma (contract manufacturing) and DRAXIMAGE (radiopharmaceuticals). During the year ended December 31, 2006, 72.8% of its consolidated revenues were derived from DRAXIS Pharma (contract manufacturing) and 24.2% of its consolidated revenues were derived from DRAXIMAGE (radiopharmaceuticals).

Deal Summary

Key Ratios

  Buyer Target
Gross Margin % 41.88 44.04
Operating Margin % 5.85 14.75
Quick Ratio 0.82 4.99
Current Ratio 0.98 6.67
Coverage Ratio -0.03 0.05
Total Assets 458.9 116.8
Return on Equity % 6.61 9.31
Return on Assets % 3.84 8.46
Cash+ ST Inv. Per Share 1.51 0.65
Total Debt 0.1 0.0
Total Debt to Equity % 0.03 0
Total Debt to Tangible Equity % 0.39 0
Debt to Asset % 0.02 0.00

Product Summary

Sector Buyer Target
Healthcare
Biopharmaceuticals  
Neurology
The Neurology Subsector includes therapeutics that treat disorders of the central nervous system, including the brain, spinal cord, and nerves.
  
Healthcare Services  
Support Services
The Support Services Subsector is comprised of companies that provide non-medical services for managing, enhancing, facilitating, and enabling the healthcare delivery process.
  
Medical Devices  
Radiology
The Radiology Subsector includes medical devices that generate images of internal physiology.
  
Outsourced 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.
Technology  
Software  
Industry-Specific
Software that has functionality specific to a vertical industry.
  

- 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  
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:

  • DRAXIMAGE I-131 Sodium Iodide Capsules
  • DRAXIMAGE Iobenguane I-131 Injection/131 I-metaiodobenzylguanidine (I-131MIBG)
  
Healthcare Services  
Support Services  
Consulting
Services providing advice, assistance, and information to a wide range of healthcare companies, including pharmaceutical, medical devices, and health services companies.

Buyer Products:

  • Global Regulatory Affairs Group
  • Global Product Development Services
  
Medical Devices  
Radiology  
Nuclear  
Gamma Camera  
Accessories  
Sources  
Standards
Guidelines for radioactive dosage calculations.

Target Products:

  • Technetium (Tc 99m) Generators
  
Contrast Agents  
Radionuclides  
Injectable
A liquid form of radionuclide contrast agent that is introduced into the body by way of a needle.

Target Products:

  • DRAXIMAGE Tc 99 MarcoAggregated Albumin Kit (MAA)
  • DRAXIMAGE Tc-99m Sestamibi
  • MDP
  • DTPA
  • DRAXIMAGE Tc 99 Diethylene-triamine Pentacetic Acid Kit
  • DRAXIMAGE Tc 99 Calcium Glucoheptonate Kit
  • DRAXIMAGE Somatoscan/Somatostatin Therapy
  • DRAXIMAGE INFECTON (Technetium-Labeled Ciprofloxacin)
  • DRAXIMAGE Tc 99 Methylene Diphosphonic Acid Kit
  
Oral
A pill form of radioactive contrast agent that is swallowed orally.

Target Products:

  • DRAXIMAGE I-131 Sodium Iodide Capsules
  • DRAXIMAGE Sodium Iodide I-131 Preparation Kit
  
Outsourced Services
Development/Manufacturing Services
Contract Manufacturing Organizations (CMO)  
Pharmaceuticals  
Final Dosage Forms
Contract Manufacturing Organizations (CMO) that produce large quantities of drug products in final dosage forms ready to be sold to end users.

Target Products:

  • Draxis Pharma Inc.
  
Contract Research Organizations (CRO)  
Full Service
Contract Research Organizations (CROs) that conduct both preclinical and clinical studies in the development of new therapeutic products.

Buyer Products:

  • Early Development Services
  
Limited Service  
Clinical
Limited Service Contract Research Organizations that design, manage, and monitor human studies of new therapeutics. Other services include project management, patient recruitment, data management, biostatistical analysis, medical and regulatory affairs, and quality assurance.

Buyer Products:

  • PRA International Clinical Pharmacology Center
  • Global Medical And Safety Services
  • Clinical Trials Management Services
  • Sterling Synergy Systems Ltd.
  • Pharma Bio-Research
  • Drug Safety Management Services
  
Technology  
Software  
Industry-Specific  
Healthcare/Pharma  
Drug Development  
Clinical Trials Management
Software designed to manage the information and processes relating to clinical trials.

Buyer Products:

  • PRA Clinical Data Manager And Oracle Clinical
  • Flex DMS
  

- 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
Buyer
  Covance Inc. n/a 5,239.110 32.08 31.49 3.37 3.45 5.66
Pharmaceutical Product Development, Inc. n/a 4,991.460 30.35 30.76 3.66 3.85 n/a
MDS Inc. (USA) n/a 2,715.464 3.34 53.66 2.39 2.33 6.30
ICON plc (ADR) n/a 1,682.357 32.70 32.43 2.91 2.78 n/a
PAREXEL International Corporation n/a 1,296.213 29.33 27.81 1.34 1.41 n/a
PharmaNet Development Group Inc. n/a 647.019 n/a 30.17 1.53 1.94 n/a
Target
  General Electric Company n/a 413,740.761 18.72 18.17 2.45 2.41 22.36
Johnson & Johnson n/a 186,117.014 17.95 15.52 3.16 3.06 n/a
Bristol Myers Squibb Co. n/a 58,860.700 27.76 20.39 3.15 2.95 12.55
Cardinal Health, Inc. n/a 23,894.929 12.37 15.93 0.28 0.25 15.76
Biogen Idec Inc. n/a 22,507.295 41.28 30.04 7.54 7.18 17.40
Covidien Ltd. n/a 20,384.205 n/a 14.95 2.03 1.98 n/a
Koninklijke DSM N.V. (ADR) n/a 9,582.816 17.01 21.90 0.76 n/a 1.54
Hospira, Inc. n/a 6,423.864 61.38 19.00 2.14 1.88 n/a
Patheon, Inc. n/a 340.229 n/a n/a 0.50 n/a 1.88
Immunomedics, Inc. n/a 189.157 n/a -9.92 22.24 n/a 9.30
Molecular Insight Pharmaceuticals, Inc. n/a 167.420 n/a -2.55 395.06 255.23 3.97
Cytogen Corporation n/a 20.930 n/a -0.59 1.12 1.08 1.69
Boehringer Ingelheim GmbH n/a n/a n/a n/a n/a n/a n/a
Bayer Schering Pharma AG n/a n/a n/a n/a n/a n/a n/a
HAUPT Pharma AG n/a n/a n/a n/a n/a n/a n/a
MDS Nordion S.A. n/a n/a n/a n/a n/a n/a n/a
DPT Laboratories, Ltd. n/a n/a n/a n/a n/a n/a n/a
Bracco S.p.A. n/a n/a n/a n/a n/a n/a n/a
Hollister-Stier Laboratories LLC 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
  ePlus Inc. n/a 86.433 n/a n/a 0.12 n/a 0.82
Target
  Genzyme Corporation n/a 19,736.848 148.32 25.62 5.44 5.27 5.49
MDS Inc. (USA) n/a 2,715.464 3.34 53.66 2.39 2.33 6.30
BTG plc n/a n/a n/a n/a n/a n/a n/a
Chinoin Pharmaceutical Company n/a n/a n/a n/a n/a n/a n/a

- 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
  Biomira Inc. (USA) n/a 84.167 n/a -3.38 23.15 n/a 8.11
Target
  GlaxoSmithKline plc (ADR) 23.00% 140,440.355 12.85 12.82 3.02 3.06 13.26
Genzyme Corporation 23.00% 19,736.848 148.32 25.62 5.44 5.27 5.49
Pfizer Inc. 13.00% 168,398.012 11.33 11.35 3.50 3.53 n/a
Johnson & Johnson 10.00% 186,117.014 17.95 15.52 3.16 3.06 n/a
General Electric Company n/a 413,740.761 18.72 18.17 2.45 2.41 22.36
Penwest Pharmaceuticals n/a 197.694 n/a -4.49 65.59 55.56 6.83
DUSA Pharmaceuticals, Inc. n/a 46.593 n/a -4.07 1.68 1.65 3.06
Bracco S.p.A. 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
  Pro-Pharmaceuticals, Inc. n/a 27.044 5.74 n/a n/a n/a 76.18
Geriatric Oncology Consortium n/a n/a n/a n/a n/a n/a n/a
IntrinsiQ Data Corporation n/a n/a n/a n/a n/a n/a n/a
US Oncology, Inc. n/a n/a n/a n/a n/a n/a n/a
Target
  General Electric Company n/a 413,740.761 18.72 18.17 2.45 2.41 22.36
Johnson & Johnson n/a 186,117.014 17.95 15.52 3.16 3.06 n/a
GlaxoSmithKline plc (ADR) n/a 140,440.355 12.85 12.82 3.02 3.06 13.26
Bristol Myers Squibb Co. n/a 58,860.700 27.76 20.39 3.15 2.95 12.55
Cardinal Health, Inc. n/a 23,894.929 12.37 15.93 0.28 0.25 15.76
Covidien Ltd. n/a 20,384.205 n/a 14.95 2.03 1.98 n/a
Genzyme Corporation n/a 19,736.848 148.32 25.62 5.44 5.27 5.49
MDS Inc. (USA) n/a 2,715.464 3.34 53.66 2.39 2.33 6.30
Penwest Pharmaceuticals n/a 197.694 n/a -4.49 65.59 55.56 6.83
DUSA Pharmaceuticals, Inc. n/a 46.593 n/a -4.07 1.68 1.65 3.06
BTG plc n/a n/a n/a n/a n/a n/a n/a
Isogenic Science, Ltd. n/a n/a n/a n/a n/a n/a n/a
Bracco S.p.A. n/a n/a n/a n/a n/a n/a n/a
Med Discovery SA n/a n/a n/a n/a n/a n/a n/a
Chinoin Pharmaceutical Company n/a n/a n/a n/a n/a n/a n/a
United Pharmacy Partners 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 381.9 86.0 467.9
Other Revenue 0.0 0.0 0.0
Total Revenue 381.9 86.0 467.9
Cost of Revenue 222.0 48.2 270.1
SG&A Expense 122.5 17.3 139.8
Depreciation & Amortization 15.1 5.4 20.4
Research & Development 0.0 2.6 2.6
Interest Expense 0.0 0.0 0.0
Other Operating Expense 0.0 0.0 0.0
Total Expenses 359.6 73.3 432.9
Operating Income 22.3 12.7 35.0
Non Operating Items
Interest Expense (Inc.), Net Non-Oprtng -0.7 0.7 -0.1
Other, Net 0.3 0.0 0.3
Income Before Taxes 21.9 12.9 34.7
Income Taxes 4.3 3.0 7.3
Income After Taxes 17.6 9.9 27.5
Net Income - Excl. Xord. Items 17.6 9.9 27.5
Net Income - Incl. Xord. Items 17.6 9.9 27.5
Income Avail. to Common 17.6 9.9 27.5
Share Items
Basic Avg. Shares Outstanding 24.4 42.0 66.5
Basic EPS - Excl. Xord. Items 0.72 0.24 0.41
Basic EPS - Incl. Xord. Items 0.72 0.24 0.41
Full Dilution Adjustment 0.0 0.0 0.0
Fully Diluted Shares Outstanding 25.3 42.4 67.7
F.D. EPS - Excl. Xord. Items 0.70 0.23 0.41
F.D. EPS - Incl. Xord. Items 0.70 0.23 0.41
Balance Sheet
Assets
Cash and Equivalents 38.1 27.4 65.5
Accounts Receivable 107.3 15.4 122.7
Inventory 0.0 8.4 8.4
Prepayments and Advances 27.4 2.1 29.5
Other Current Assets 2.1 3.9 6.1
Current Assets 175.0 57.2 232.2
Accum D&A 0.0 0.0 0.0
PPE, Net 33.7 52.9 86.6
Goodwill & Intangibles 246.8 1.0 247.8
Other Assets 0.0 0.0 0.0
Other LT Assets 3.4 5.7 9.1
Total Assets 458.9 116.8 575.7
Liabilities
Accounts Payable 21.7 8.0 29.8
Payable/Accrued 0.0 0.0 0.0
Accrued Expenses 38.4 0.0 38.4
ST Debt 0.0 0.0 0.0
Curr Port of LTD & Cap Lease Oblg 0.0 0.0 0.0
Other (Current) Liabilities 118.3 0.5 118.8
Current Liab. 178.4 8.6 187.0
LT Debt 0.0 0.0 0.0
Capitalized Lease Obligations 0.0 0.0 0.0
Total LT Debt 0.0 0.0 0.0
Deferred Taxes 8.1 0.0 8.1
Other LT Liab. 5.9 2.1 8.0
Total Liabilities 192.5 10.7 203.2
Shareholders Equity
Common Stock 0.2 79.6 79.8
Additional Paid in Capital 163.8 15.9 179.7
Retained Earnings 85.4 -4.6 80.8
Treasure Stock -0.2 0.0 -0.2
Other Equity 17.1 15.3 32.4
Total Equity 266.4 106.1 372.6
Total Liab. & Equity 458.9 116.8 575.7
Shares Outstanding 24.5 42.1 66.6
Cash Flow
Operating Cash Flow
CF Net Income 17.6 9.9 27.5
CF Depreciation 15.1 5.4 20.4
CF Deferred Taxes 0.0 2.2 2.2
Other Non-Cash Items 5.8 0.1 5.9
Change in Working Capital 6.8 2.4 9.2
Total Cash From Operating Activities 45.3 20.0 65.3
Investing Cash Flow (not calculated)
Capital Expenditures -11.9 -8.6 -20.5
Other Investing Cash Flows -93.6 -0.4 -94.0
Total Cash From Investing Activities -105.5 -8.9 -114.4
Financing Cash Flow (not calculated)
Dividends Paid 0.0 0.0 0.0
Purchase Or Sale of Stock 5.6 3.8 9.3
Purchase and Retirement of Debt -0.1 0.0 -0.1
Other Financing Cash Flow 2.3 -2.3 -0.0
Total Cash From Financing Activities 7.7 1.5 9.2
Exchange Rate Effects 4.6 -0.0 4.5
Net Change in Cash -47.9 12.5 -35.4
Cash Taxes Paid 12.5 0.2 12.7
Cash Interest Paid 1.6 0.0 1.6