Summary

Other Scenarios:

Buyer: Penwest Pharmaceuticals (PPCO) Last Price: 17.42 Market Cap.: 400.41M
Target: Kendle International Inc. (KNDL) Last Price: 27.06 Market Cap.: 388.71M

Lines of Business Summary:

Product Summary:

Overlap & Complementary Sectors

Sector Buyer Target # of Focused Companies
*Healthcare 863
Biopharmaceuticals   321
Healthcare Services   158
Outsourced Services 68
*Technology   1,258
Software   326

- 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: 7)
  • Estadisticos y Clinicos Asociados, S.A.
  • Phase II-IV Clinical Services
  • AAC Consulting Group
  • Medical Affairs, Marketing and Communications (MAM&C) Group
Buyer
  • Procardia XL (Nifedipine)
  • PW2132
  • PW2101
  • PW4102
Target
  • AAC Consulting Group
  • TrialWare

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)
  • Pfizer Inc. (PFE)
  • CardioVascular BioTherapeutics, Inc. (CVBT)
  • Prana Biotechnology Limited (ADR) (PRAN)

Key Financial Summary:

Key Metrics

  Buyer Target
Number of Employees 72 1,900
Revenue Per Employee 61,597.3 172,939.1
Total Revenue 1.1 81.9
Total Expenses 9.1 75.5
Other Revenue 0.0 0.0
Cost of Revenue 0.0 53.8
SG&A Expense 3.8 20.0
Research & Development 5.2 0.0
Other Operating Expense 0.0 0.0
Operating Income -8.0 6.4
Unusual Income 0.0 0.0
LT Debt to Capital 0 0.24
Fwd P/E -12.17 20.65
Fwd P/Rev 64.44 1.52
Book Value 57.5 138.3
Curr Portion of LTD/Cap Lease 0.0 0.2

Key Ratios

  Buyer Target
Gross Margin % 98.8 36.46
Operating Margin % -405.42 8.42
Quick Ratio 13.94 1.99
Current Ratio 14.23 2.18
Coverage Ratio -0.09 0.06
Total Assets 64.3 203.8
Return on Equity % -38.25 11.77
Return on Assets % -34.2 7.99
Cash+ ST Inv. Per Share 2.34 3.37
Total Debt 0.0 0.6
Total Debt to Equity % 0 0.42
Total Debt to Tangible Equity % 0 0.6
Debt to Asset % 0.00 0.29

Individual Company Summary

Focused

Buyer

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

Target

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

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

Kendle International Inc. is a clinical research organization (CRO) that provides a range of Phase I-IV clinical development services to the biopharmaceutical industry. The Company offers clinical research services and information technology to biopharmaceutical companies. The Company delivers integrated clinical research services, including clinical trial management, clinical data management, statistical analysis, medical writing, regulatory consulting and organizational meeting management and publications services on a contract basis to the biopharmaceutical industry. The Company operates in North America, Europe, Asia/Pacific, Latin America and Africa. It is managed in one segment encompassing contract services related to Phase I-IV clinical trials.

Product Summary

Sector Buyer Target
*Healthcare
Biopharmaceuticals  
Cardiovascular System
The Cardiovascular System Subsector includes therapeutics that treat disorders affecting the heart and blood vessels.
  
Neurology
The Neurology Subsector includes therapeutics that treat disorders of the central nervous system, including the brain, spinal cord, and nerves.
  
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.
  
Healthcare Services  
Support Services
The Support Services Subsector comprises of companies that provide non-medical services for managing, enhancing, facilitating, and enabling the healthcare delivery process.
  
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.
  
*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  
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)
  
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
  
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)
  
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.

Target Products:

  • AAC Consulting Group
  
Outsourced Services
Development/Manufacturing Services  
Contract Research Organizations (CRO)  
Full Service
Contract Research Organizations (CROs) that conduct both preclinical and clinical studies in the development of new therapeutic products.

Target Products:

  • Estadisticos y Clinicos Asociados, S.A.
  
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.

Target Products:

  • Phase II-IV Clinical Services
  • AAC Consulting Group
  • Medical Affairs, Marketing and Communications (MAM&C) Group
  • Kendle Clinical Pharmacology Unit
  • Kendle Clinical Services
  
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
  
*Technology  
Software  
Industry-Specific  
Healthcare/Pharma  
Drug Development  
Clinical Trials Management
Software designed to manage the information and processes relating to clinical trials.

Target Products:

  • TrialWare
  

- 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 186,002.145 17.01 17.20 3.63 3.50 6.77
Wyeth n/a 64,927.998 17.15 15.40 3.34 3.23 6.87
Elan Corporation, plc (ADR) n/a 6,767.330 n/a -20.80 12.54 11.18 -9.95
Biovail Corporation (USA) n/a 2,424.319 6.62 6.67 2.38 2.37 6.46
Andrx Corporation n/a 1,788.380 193.03 44.70 1.79 1.64 2.35
Alpharma Inc. n/a 1,171.097 7.57 15.25 1.92 1.79 1.68
K-V Pharmaceutical Company n/a 1,116.899 23.49 n/a 2.94 n/a 4.50
Ligand Pharmaceuticals Inc. n/a 831.504 n/a -22.11 4.30 n/a -2.27
SkyePharma PLC (ADR) n/a 397.987 n/a n/a 3.40 n/a -3.28
SCOLR Pharma Inc. n/a 205.834 n/a n/a 268.89 n/a 9.66
Elite Pharmaceuticals, Inc. n/a 46.542 n/a n/a 79.06 n/a 5.88
BioDelivery Sciences International, Inc. n/a 28.222 n/a n/a 86.85 n/a 79.28
Purdue Pharma L.P. n/a n/a n/a n/a n/a n/a n/a
Target
  Pharmaceutical Product Development, Inc. n/a 4,204.444 27.94 27.15 3.64 3.64 6.60
Covance Inc. n/a 4,096.526 31.61 28.51 3.05 2.91 5.62
Charles River Laboratories n/a 2,834.813 348.92 18.80 2.61 2.58 7.48
ICON plc (ADR) n/a 949.126 39.13 27.00 2.33 2.27 4.70
PAREXEL International Corporation n/a 889.131 37.77 27.25 1.17 1.24 n/a
PRA International n/a 607.016 20.47 23.04 1.92 1.95 7.83
Covalent Group, Inc. n/a 38.043 n/a n/a 3.03 n/a 5.94
Quintiles Transnational Corp. 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
  Mylan Laboratories Inc. n/a 4,266.817 19.64 15.60 3.31 3.06 6.38
DRAXIS Health Inc. (USA) n/a 180.679 24.44 18.74 2.27 2.03 2.02

- 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% 4,266.817 19.64 15.60 3.31 3.06 6.38
sanofi-aventis (ADR) n/a 120,512.356 26.43 12.99 3.17 3.37 -8.63
Schering AG (ADR) n/a 22,226.291 29.36 27.93 3.15 n/a 6.38
Endo Pharmaceuticals n/a 4,162.330 19.13 20.31 4.53 4.70 6.14
E Merck n/a n/a n/a n/a n/a n/a n/a
Target
  Pfizer Inc. 15.00% 201,171.124 18.55 13.73 4.25 4.20 9.45
CardioVascular BioTherapeutics, Inc. n/a 378.332 n/a n/a n/a n/a 110.56
Prana Biotechnology Limited (ADR) n/a 42.288 n/a n/a 28.00 n/a 3.74

- 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 120,512.356 26.43 12.99 3.17 3.37 -8.63
Schering AG (ADR) n/a 22,226.291 29.36 27.93 3.15 n/a 6.38
Mylan Laboratories Inc. n/a 4,266.817 19.64 15.60 3.31 3.06 6.38
Endo Pharmaceuticals n/a 4,162.330 19.13 20.31 4.53 4.70 6.14
DRAXIS Health Inc. (USA) n/a 180.679 24.44 18.74 2.27 2.03 2.02
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
  CardioVascular BioTherapeutics, Inc. n/a 378.332 n/a n/a n/a n/a 110.56
Prana Biotechnology Limited (ADR) n/a 42.288 n/a n/a 28.00 n/a 3.74
Miravant Medical Technologies n/a 0.681 n/a n/a n/a n/a -0.12

- Defined by the Company - Defined by Others

Financials

  Buyer Target Combined Entity
Income Statement
Operating Items
Revenue 6.0 290.0 296.0
Other Revenue 0.0 0.0 0.0
Total Revenue 6.0 290.0 296.0
Cost of Revenue 0.1 184.3 184.4
SG&A Expense 12.8 74.2 87.0
Depreciation & Amortization 0.0 7.2 7.2
Research & Development 17.3 0.0 17.3
Interest Expense 0.0 0.0 0.0
Other Operating Expense 0.0 0.0 0.0
Total Expenses 30.2 265.6 295.8
Operating Income -24.2 24.4 0.2
Non Operating Items
Interest Expense (Inc.), Net Non-Oprtng 2.2 1.5 3.7
Other, Net 0.0 -1.0 -1.0
Income Before Taxes -22.0 24.9 2.9
Income Taxes 0.0 8.6 8.6
Income After Taxes -22.0 16.3 -5.7
Net Income - Excl. Xord. Items -22.0 16.3 -5.7
Net Income - Incl. Xord. Items -22.0 16.3 -5.7
Income Avail. to Common -22.0 16.3 -5.7
Share Items
Basic Avg. Shares Outstanding 22.8 14.3 37.1
Basic EPS - Excl. Xord. Items n/a 1.14 -0.15
Basic EPS - Incl. Xord. Items n/a 1.14 -0.15
Full Dilution Adjustment 0.0 0.0 0.0
Fully Diluted Shares Outstanding 22.8 14.8 37.6
F.D. EPS - Excl. Xord. Items n/a 1.10 -0.15
F.D. EPS - Incl. Xord. Items n/a 1.10 -0.15
Balance Sheet
Assets
Cash and Equivalents 33.6 46.6 80.2
ST Investments 19.8 3.3 23.0
Accounts Receivable 1.0 77.6 78.6
Inventory 0.2 0.0 0.2
Prepayments and Advances 0.9 0.0 0.9
Other Current Assets 0.0 12.0 12.0
Current Assets 55.5 139.5 195.0
Accum D&A 0.0 0.0 0.0
PPE, Net 2.8 16.9 19.7
Goodwill & Intangibles 3.2 40.6 43.7
Other Assets 0.0 0.0 0.0
Other LT Assets 2.8 6.8 9.6
Total Assets 64.3 203.8 268.1
Liabilities
Accounts Payable 1.6 10.1 11.8
Payable/Accrued 0.0 0.0 0.0
Accrued Expenses 2.0 18.9 20.8
ST Debt 0.0 0.0 0.0
Curr Port of LTD & Cap Lease Oblg 0.0 0.2 0.2
Other (Current) Liabilities 0.3 34.7 35.0
Current Liab. 3.9 63.9 67.8
LT Debt 0.0 0.0 0.0
Capitalized Lease Obligations 0.0 0.3 0.3
Total LT Debt 0.0 0.3 0.3
Other LT Liab. 2.9 1.2 4.1
Total Liabilities 6.8 65.5 72.3
Shareholders Equity
Common Stock 0.0 0.1 0.1
Additional Paid in Capital 212.4 153.6 366.0
Retained Earnings -154.8 -15.7 -170.6
Unrealized Gain (Loss) 0.0 -0.0 -0.0
Treasure Stock 0.0 -0.5 -0.5
Other Equity -0.1 0.9 0.8
Total Equity 57.5 138.3 195.8
Total Liab. & Equity 64.3 203.8 268.1
Shares Outstanding 22.9 14.4 37.3
Cash Flow
Operating Cash Flow
CF Net Income -22.0 0.0 -22.0
CF Depreciation 0.0 0.0 0.0
CF Deferred Taxes 0.0 0.0 0.0
Other Non-Cash Items -3.2 0.0 -3.2
Change in Working Capital 2.8 23.7 26.6
Total Cash From Operating Activities -22.3 23.7 1.4
Investing Cash Flow (not calculated)
Capital Expenditures -1.1 -6.6 -7.6
Other Investing Cash Flows 25.5 5.0 30.5
Total Cash From Investing Activities 24.4 -1.6 22.9
Financing Cash Flow (not calculated)
Dividends Paid 0.0 0.0 0.0
Purchase Or Sale of Stock 9.4 9.6 19.0
Purchase and Retirement of Debt 0.0 -6.3 -6.3
Other Financing Cash Flow 0.0 1.2 1.2
Total Cash From Financing Activities 9.4 4.5 14.0
Exchange Rate Effects 0.0 0.2 0.2
Net Change in Cash 11.5 26.9 38.4
Cash Taxes Paid 0.0 3.2 3.2
Cash Interest Paid 0.0 0.5 0.5