Summary

Other Scenarios:

Buyer: Penwest Pharmaceuticals (PPCO) Last Price: 18.20 Market Cap.: 418.34M
Target: Array BioPharma Inc. (ARRY) Last Price: 9.78 Market Cap.: 383.26M

Lines of Business Summary:

Product Summary:

Overlap & Complementary Sectors

Sector Buyer Target # of Focused Companies
*Healthcare 872
Biopharmaceuticals 329
Outsourced Services 66

- 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: 14)
  • Geminex
  • SyncroDose
  • TIMERx
  • Gastroretentive Drug Delivery System
Target (Total: 13)
  • Analytical/Medicinal Chemistry
  • Custom Libraries
  • Diversity Library
  • Lead Generation Library
Buyer
  • Procardia XL (Nifedipine)
  • PW2132
  • PW2101
  • PW4102
Target
  • ARRY-438162 (MEK Inhibitor)
  • MEK Inhibitors
  • p38 Inhibitors
  • ARRY-142886/AZD6244

Business Relationship Summary:

Top Key Suppliers

Top Key Customers
Buyer (Total: 2)
  • Mylan Laboratories Inc. (MYL)
  • DRAXIS Health Inc. (USA) (DRAX)
Target (Total: 0)

n/a
Buyer (Total: 5)
  • Mylan Laboratories Inc. (MYL)
  • sanofi-aventis (ADR) (SNY)
  • Schering AG (ADR) (SHR)
  • Endo Pharmaceuticals (ENDP)
Target (Total: 3)
  • Genentech, Inc. (DNA)
  • InterMune, Inc. (ITMN)
  • AstraZeneca plc (ADR) (AZN)

Key Financial Summary:

Key Metrics

  Buyer Target
Number of Employees 72 276
Revenue Per Employee 61,597.3 145,040.2
Total Revenue 1.1 10.1
Total Expenses 9.1 22.7
Other Revenue 0.0 0.0
Cost of Revenue 0.0 9.6
SG&A Expense 3.8 3.8
Research & Development 5.2 9.2
Other Operating Expense 0.0 0.0
Operating Income -8.0 -12.6
Unusual Income 0.0 0.0
LT Debt to Capital 0 17.09
Fwd P/E -13.47 -6.54
Fwd P/Rev 78.84 9.16
Book Value 57.5 68.6
Curr Portion of LTD/Cap Lease 0.0 0.0

Individual Company Summary

Focused

Buyer

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

Target

Focused (): *Healthcare > Outsourced Services > Drug Discovery Services > Lead Discovery/Validation/Optimization

Business Description

Buyer

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.

Target

Array BioPharma Inc. is a biopharmaceutical company focused on the discovery, development and commercialization of targeted small molecule drugs to treat debilitating and life-threatening diseases. The Company's drug development pipeline is focused on the treatment of cancer and inflammatory disease and includes clinical candidates that are designed to regulate therapeutically important target proteins. As of June 30, 2006, the Company advanced five programs, which include ErbB-2 /epidermal growth factor receptor (EGFR) (cancer), mitogen-activated kinase (MEK) (inflammation), p38 (inflammation), kinesin spindle protein (KSP) (cancer) and ErbB-2 (cancer). In addition, the Company has out-licensed cancer programs to AstraZeneca PLC, which includes ARRY-886 (AZD6244) and to Genentech, Inc. In July 2006, BioMed Realty Trust Inc. acquired the Company's life science campus located in Boulder, Colorado.

Deal Summary

Key Ratios

  Buyer Target
Gross Margin % 98.8 11.98
Operating Margin % -405.42 -92.83
Quick Ratio 13.94 3.79
Current Ratio 14.23 3.97
Coverage Ratio -0.09 -0.05
Total Assets 64.3 102.2
Return on Equity % -38.25 -57.71
Return on Assets % -34.2 -38.77
Cash+ ST Inv. Per Share 2.34 1.79
Total Debt 0.0 14.1
Total Debt to Equity % 0 20.61
Total Debt to Tangible Equity % 0 20.61
Debt to Asset % 0.00 13.85

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.
  
Immunology
The Immunology Subsector includes therapeutics that treat disorders affecting the immune system.
  
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.
  
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.
  
Respiratory System
The Respiratory System Subsector includes therapeutics that treat disorders affecting both the upper and lower respiratory tract, including the nose, throat, larynx, trachea, bronchi, and lungs.
  
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.
  
Drug Delivery Technology
The Drug Delivery Technology Subsector includes companies that develop novel delivery methods for therapeutics.
  
Drug Discovery Services
The Drug Discovery Services Subsector includes companies that provide biopharmaceutical companies with novel biological targets and drug leads.
  

- 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.

Buyer 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.

Buyer Products:

  • PW2132
  
Vascular Disorders  
Hypertension  
Beta Adrenergic Receptor Blocking Agents (Beta Blockers)
Therapeutics that treat high blood pressure by blocking the beta adrenergic receptors of the heart muscle.

Buyer Products:

  • PW2101
  
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.

Buyer 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.

Target Products:

  • ARRY-438162 (MEK Inhibitor)
  
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.

Target Products:

  • MEK Inhibitors
  • p38 Inhibitors
  
Immunology  
Research/Preclinical Stage Products
Therapeutics that are being investigated for the treatment of immune disorders in very early stages of research where no human subject is involved.

Target Products:

  • MEK Inhibitors
  • p38 Inhibitors
  
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.

Target Products:

  • ARRY-438162 (MEK Inhibitor)
  
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.

Buyer Products:

  • PW4102
  • PW4112
  • PW4123
  • PW4110
  
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.

Target Products:

  • ARRY-142886/AZD6244
  • ARRY-334543 (EGFR/ErbB-2 Inhibitors)
  
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.

Target Products:

  • ARRY-334543 (EGFR/ErbB-2 Inhibitors)
  • ErbB-2 Inhibitors
  
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.

Buyer 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:

  • PW4142
  
Respiratory System  
Lower Respiratory Tract Disorders (Lung Disorders)  
Asthma  
Acute Treatments  
Bronchodilators  
Beta Adrenergic Receptor Agonists
Therapeutics that cause dilation of the lung passages by supporting the actions of the adrenergic transmitters like epinephrine and norepinephrine.

Buyer Products:

  • PW3101 (Albuterol)
  
Outsourced Services
Development/Manufacturing Services  
Chemistry Services
Outsourced companies that provide medicinal chemistry, organic synthesis, process research, cGMP synthesis, and analytical services to the biopharmaceutical industry.

Target Products:

  • Analytical/Medicinal Chemistry
  
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.

Buyer Products:

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

Buyer Products:

  • Gastroretentive Drug Delivery System
  
Drug Discovery Services  
Lead Discovery/Validation/Optimization  
Combinatorial Chemistry Libraries
Drug discovery companies that provide biopharmaceutical companies a library of combinatorial chemical compounds used for testing.

Target Products:

  • Custom Libraries
  • Diversity Library
  • Lead Generation Library
  
Combinatorial Services
Drug discovery companies that provide biopharmaceutical companies combinatorial chemistry services.

Target Products:

  • Array Discovery Platform
  • Optimer BB
  
High Throughput Screening (HTS)
Bioanalytical services that allow for the biological testing of up to 10,000 compounds each day.

Target Products:

  • High Throughput Screening
  

- 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
  Johnson & Johnson n/a 199,398.736 18.02 18.45 3.82 3.78 n/a
Wyeth n/a 69,974.213 17.18 16.60 3.52 3.51 n/a
Elan Corporation, plc (ADR) n/a 6,402.804 n/a -19.54 11.98 11.24 n/a
Biovail Corporation (USA) n/a 2,538.085 6.93 6.93 2.49 2.46 6.76
Andrx Corporation n/a 1,813.506 195.74 45.44 1.81 1.67 2.38
Alpharma Inc. n/a 1,199.058 7.75 16.33 1.97 1.92 1.72
K-V Pharmaceutical Company n/a 1,101.545 23.17 n/a 2.89 n/a 4.44
Ligand Pharmaceuticals Inc. n/a 858.276 n/a -24.33 4.44 n/a n/a
SkyePharma PLC (ADR) n/a 354.269 n/a n/a 3.73 n/a n/a
SCOLR Pharma Inc. n/a 208.872 n/a n/a 272.86 n/a 9.80
Elite Pharmaceuticals, Inc. n/a 40.143 n/a n/a 68.19 n/a 5.07
BioDelivery Sciences International, Inc. n/a 27.876 n/a -1.79 85.79 9.82 78.30
Purdue Pharma L.P. n/a n/a n/a n/a n/a n/a n/a
Target
  Vertex Pharmaceuticals Incorporated n/a 5,093.153 n/a -16.70 30.18 19.99 10.03
Theravance, Inc. n/a 1,955.743 n/a -10.85 126.02 83.83 20.80
Exelixis, Inc. n/a 945.005 n/a -8.24 12.75 9.04 n/a
Arena Pharmaceuticals, Inc. n/a 722.652 n/a -7.05 22.76 20.50 2.52
Incyte Corporation n/a 399.962 n/a -5.05 25.68 15.81 n/a
deCODE genetics, Inc. n/a 335.282 n/a -4.09 7.71 8.11 n/a
Cytokinetics, Inc. n/a 263.026 n/a -3.68 38.32 54.56 3.07
ArQule, Inc. n/a 150.495 n/a -4.23 3.69 5.59 n/a
Avalon Pharmaceuticals, Inc. n/a 30.027 n/a -1.71 12.01 8.37 1.18

- 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
  Mylan Laboratories Inc. n/a 4,448.114 20.48 16.34 3.45 3.17 6.65
DRAXIS Health Inc. (USA) n/a 189.361 25.62 19.57 2.38 2.12 2.12

- 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
  Mylan Laboratories Inc. 63.00% 4,448.114 20.48 16.34 3.45 3.17 6.65
sanofi-aventis (ADR) n/a 117,673.763 57.81 13.43 3.15 3.26 n/a
Schering AG (ADR) n/a 22,346.496 29.68 28.30 3.19 n/a 6.44
Endo Pharmaceuticals n/a 3,798.593 19.39 19.18 4.26 4.37 5.17
E Merck n/a n/a n/a n/a n/a n/a n/a
Target
  Genentech, Inc. 35.00% 88,932.663 47.83 42.47 10.51 9.85 n/a
InterMune, Inc. 24.00% 763.432 n/a -12.46 7.34 8.09 n/a
AstraZeneca plc (ADR) 16.00% 91,746.689 15.72 16.20 3.58 3.69 9.20

- 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
  sanofi-aventis (ADR) n/a 117,673.763 57.81 13.43 3.15 3.26 n/a
Schering AG (ADR) n/a 22,346.496 29.68 28.30 3.19 n/a 6.44
Mylan Laboratories Inc. n/a 4,448.114 20.48 16.34 3.45 3.17 6.65
Endo Pharmaceuticals n/a 3,798.593 19.39 19.18 4.26 4.37 5.17
DRAXIS Health Inc. (USA) n/a 189.361 25.62 19.57 2.38 2.12 2.12
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
Target
  Roche Holding Ltd. (ADR) n/a 150,603.416 33.42 23.50 5.45 n/a 8.26
AstraZeneca plc (ADR) n/a 91,746.689 15.72 16.20 3.58 3.69 9.20
Genentech, Inc. n/a 88,932.663 47.83 42.47 10.51 9.85 n/a
Amgen, Inc. n/a 88,056.316 29.94 20.21 6.43 6.25 32.66
Eli Lilly & Co. n/a 64,466.653 19.95 18.19 4.21 4.18 n/a
ICOS Corporation n/a 2,070.286 n/a 150.57 26.95 25.21 n/a
InterMune, Inc. n/a 763.432 n/a -12.46 7.34 8.09 n/a
Trimeris, Inc. n/a 169.841 n/a 159.40 8.51 5.32 6.98
Ono Pharmaceutical Co., Ltd. n/a n/a n/a n/a n/a n/a n/a
Takeda Pharmaceutical Company Limited n/a n/a n/a n/a n/a n/a n/a
Japan Tobacco, 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 6.0 45.0 51.0
Other Revenue 0.0 0.0 0.0
Total Revenue 6.0 45.0 51.0
Cost of Revenue 0.1 39.6 39.7
SG&A Expense 12.8 13.8 26.6
Depreciation & Amortization 0.0 0.0 0.0
Research & Development 17.3 33.4 50.7
Interest Expense 0.0 0.0 0.0
Other Operating Expense 0.0 0.0 0.0
Total Expenses 30.2 86.8 117.0
Operating Income -24.2 -41.8 -66.0
Non Operating Items
Interest Expense (Inc.), Net Non-Oprtng 2.2 2.2 4.4
Other, Net 0.0 0.0 0.0
Income Before Taxes -22.0 -39.6 -61.6
Income Taxes 0.0 0.0 0.0
Income After Taxes -22.0 -39.6 -61.6
Net Income - Excl. Xord. Items -22.0 -39.6 -61.6
Net Income - Incl. Xord. Items -22.0 -39.6 -61.6
Income Avail. to Common -22.0 -39.6 -61.6
Share Items
Basic Avg. Shares Outstanding 22.8 39.1 61.9
Basic EPS - Excl. Xord. Items n/a n/a -1.00
Basic EPS - Incl. Xord. Items n/a n/a -1.00
Full Dilution Adjustment 0.0 0.0 0.0
Fully Diluted Shares Outstanding 22.8 39.1 61.9
F.D. EPS - Excl. Xord. Items n/a n/a -1.00
F.D. EPS - Incl. Xord. Items n/a n/a -1.00
Balance Sheet
Assets
Cash and Equivalents 33.6 15.6 49.1
ST Investments 19.8 54.5 74.3
Accounts Receivable 1.0 1.4 2.4
Inventory 0.2 1.6 1.8
Prepayments and Advances 0.9 1.8 2.7
Other Current Assets 0.0 0.0 0.0
Current Assets 55.5 74.9 130.4
PPE 0.0 66.1 66.1
Accum D&A 0.0 -38.8 -38.8
PPE, Net 2.8 27.3 30.1
Goodwill & Intangibles 3.2 0.0 3.2
Other Assets 0.0 0.0 0.0
Other LT Assets 2.8 0.0 2.8
Total Assets 64.3 102.2 166.5
Liabilities
Accounts Payable 1.6 6.2 7.8
Payable/Accrued 0.0 0.0 0.0
Accrued Expenses 2.0 5.8 7.8
ST Debt 0.0 0.0 0.0
Other (Current) Liabilities 0.3 6.9 7.2
Current Liab. 3.9 18.9 22.8
LT Debt 0.0 14.1 14.1
Total LT Debt 0.0 14.1 14.1
Other LT Liab. 2.9 0.5 3.4
Total Liabilities 6.8 33.5 40.3
Shareholders Equity
Common Stock 0.0 0.0 0.1
Additional Paid in Capital 212.4 202.5 414.9
Retained Earnings -154.8 -133.7 -288.5
Other Equity -0.1 -0.3 -0.4
Total Equity 57.5 68.6 126.1
Total Liab. & Equity 64.3 102.2 166.5
Shares Outstanding 22.9 39.1 62.0
Cash Flow
Operating Cash Flow
CF Net Income -22.0 -39.6 -61.6
CF Depreciation 0.0 9.0 9.0
CF Deferred Taxes 0.0 0.0 0.0
Other Non-Cash Items -3.2 6.1 3.0
Change in Working Capital 2.8 0.2 3.0
Total Cash From Operating Activities -22.3 -24.3 -46.6
Investing Cash Flow (not calculated)
Capital Expenditures -1.1 -5.2 -6.2
Other Investing Cash Flows 25.5 25.8 51.3
Total Cash From Investing Activities 24.4 20.6 45.0
Financing Cash Flow (not calculated)
Dividends Paid 0.0 0.0 0.0
Purchase Or Sale of Stock 9.4 2.7 12.1
Purchase and Retirement of Debt 0.0 4.1 4.1
Other Financing Cash Flow 0.0 0.0 0.0
Total Cash From Financing Activities 9.4 6.8 16.2
Exchange Rate Effects 0.0 0.0 0.0
Net Change in Cash 11.5 3.1 14.7
Cash Taxes Paid 0.0 0.0 0.0
Cash Interest Paid 0.0 0.6 0.6