Summary

Other Scenarios:

Buyer: Adams Respiratory Therapeutics, Inc. (ARXT) Last Price: 39.47 Market Cap.: 1.41B
Target: Cubist Pharmaceuticals, Inc. (CBST) Last Price: 22.93 Market Cap.: 1.28B

Lines of Business Summary:

Product Summary:

Overlap & Complementary Sectors

Sector Buyer Target # of Focused Companies
*Healthcare 931
Biopharmaceuticals 375
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: 9)
  • Erdosteine
  • Delsym (Dextromethorphan Polistirex)
  • Mucinex DM (Guaifenesin/Dextromethorphan Hydrobromide Extended Release)
  • Maximum Strength DM (Guaifenesin/Dextromethorphan Hydrobromide Extended Release)
Target (Total: 6)
  • HepeX-B (Dual Human Monoclonal Antibodies)
  • Intravenous Cubicin (Daptomycin)
  • CDAD (Clostridium Difficile Associated Disease) Program
  • Lipopeptide Program
Buyer

n/a
Target
  • Directed Biosynthesis Program
  • Natural Products

Business Relationship Summary:

Top Key Suppliers

Top Key Customers
Buyer (Total: 3)
  • Cardinal Health, Inc. (CAH)
  • UCB S.A.
  • Boehringer Ingelheim GmbH
Target (Total: 6)
  • Cardinal Health, Inc. (CAH)
  • WPP Group plc (ADR) (WPPGY)
  • Koninklijke DSM N.V. (ADR) (RDSMY)
  • Hospira, Inc. (HSP)
Buyer (Total: 4)
  • Wal-Mart Stores, Inc. (WMT)
  • CVS Caremark Corporation (CVS)
  • Walgreen Company (WAG)
  • McKesson Corporation (MCK)
Target (Total: 6)
  • Cardinal Health, Inc. (CAH)
  • AmerisourceBergen Corp. (ABC)
  • McKesson Corporation (MCK)
  • Novartis AG (ADR) (NVS)

Key Financial Summary:

Key Metrics

  Buyer Target
Number of Employees 463 410
Revenue Per Employee 408,606.4 682,494.3
Total Revenue 46.9 69.8
Total Expenses 47.9 56.8
Other Revenue 0.0 0.2
Cost of Revenue 16.2 15.8
SG&A Expense 24.3 23.8
Research & Development 5.8 17.1
Other Operating Expense 0.0 0.0
Operating Income -1.1 13.0
Unusual Income 0.0 0.0
LT Debt to Capital 0 82.85
Fwd P/E 23.96 27.71
Fwd P/Rev 3.36 4.53
Book Value 275.3 72.5
Curr Portion of LTD/Cap Lease 0.0 0.0

Individual Company Summary

Focused

Buyer

Focused (): *Healthcare > Biopharmaceuticals > Respiratory System > Upper Respiratory Tract Disorders > Coughs/Colds

Target

Focused (): *Healthcare > Biopharmaceuticals > Infectious Diseases > Bacterial

Business Description

Buyer

Adams Respiratory Therapeutics, Inc. is a specialty pharmaceutical company focused on late-stage development, commercialization and marketing of over-the-counter (OTC) and prescription pharmaceuticals for the treatment of respiratory disorders. The Company markets three OTC products under its Mucinex brand, one product under its Humibid brand, two products under Delsym brand and four products under Children's Mucinex line of products. In June 2006, the Company acquired the United States marketing and sales rights to Delsym from UCB, Inc. (UCB). Delsym is an OTC 12-hour liquid cough suppressant.

Target

Cubist Pharmaceuticals, Inc. (Cubist) is a biopharmaceutical company focused on the research, development and commercialization of pharmaceutical products that address unmet medical needs in the acute care environment. The Company focuses on developing products for the anti-infective marketplace. Cubist?s flagship product, CUBICIN, is approved in the United States for the treatment of complicated skin and skin structure infections (cSSI) caused by S. aureus and certain other Gram-positive bacteria and for S. aureus blood-stream infections (bacteremia), including right-sided infective endocarditis caused by methicillin-resistant staphylococcus aureus (MRSA) and methicillin-sensitive staphylococcus aureus (MSSA). CUBICIN has also been approved for marketing for complicated skin infections caused by various Gram-positive pathogens in the European Union, Israel, Taiwan and Argentina, and also has been approved for S. aureus bloodstream infections in Israel.

Deal Summary

Key Ratios

  Buyer Target
Gross Margin % 71.11 74.82
Operating Margin % 14.35 10.59
Quick Ratio 2.34 9.42
Current Ratio 3.95 9.9
Coverage Ratio 0 0.26
Total Assets 318.5 479.9
Return on Equity % 11.09 42.33
Return on Assets % 9.59 6.39
Cash+ ST Inv. Per Share 2.24 4.98
Total Debt 0.0 350.0
Total Debt to Equity % 0 483.08
Total Debt to Tangible Equity % 0 724.89
Debt to Asset % 0.00 72.93

Product Summary

Sector Buyer Target
*Healthcare
Biopharmaceuticals
Digestive System
The Digestive System Subsector includes therapeutics that treat disorders affecting the digestive system.
  
Infectious Diseases
The Infectious Diseases Subsector includes therapeutics that treat diseases caused by the invasion and reproduction of microorganisms in the body.
  
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  
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
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:

  • HepeX-B (Dual Human Monoclonal Antibodies)
  
Infectious Diseases  
Bacterial  
Antibacterial Agents  
Broad Spectrum  
Antibiotics  
Lipopeptides
Therapeutics that treat bacterial infections by inhibiting bacterial cell wall synthesis.

Target Products:

  • Intravenous Cubicin (Daptomycin)
  
Narrow Spectrum  
Dermatology  
Skin/Soft Tissue Infections  
Lipopeptides
Therapeutics that treat bacterial infections of non-skeletal tissue usually involving fat, muscle, and skin by disrupting multiple cbacterial cell membrane functions.

Target Products:

  • Intravenous Cubicin (Daptomycin)
  
Musculoskeletal System  
Skin/Soft Tissue Infections  
Lipopeptides
Therapeutics that treat bacterial infections of non-skeletal tissue usually involving fat, muscle, and skin by disrupting bacterial cytoplasmic memranes.

Target Products:

  • Intravenous Cubicin (Daptomycin)
  
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.

Target Products:

  • HepeX-B (Dual Human Monoclonal Antibodies)
  • Intravenous Cubicin (Daptomycin)
  
Research/Preclinical Stage Products
Therapeutics that are being investigated for the treatment of infectious diseases in very early stages of research where no human subject is involved.

Target Products:

  • CDAD (Clostridium Difficile Associated Disease) Program
  • Lipopeptide Program
  
Respiratory System  
Phase I/Phase II Clinical Stage Products
Therapeutics that are being investigated for the treatment of respiratory disorders in early stages of clinical research where human subject is involved.

Buyer Products:

  • Erdosteine
  
Upper Respiratory Tract Disorders  
Coughs/Colds  
Antitussives
Therapeutics that relieve or prevent coughs.

Buyer Products:

  • Delsym (Dextromethorphan Polistirex)
  
Antitussives/Expectorants
Therapeutics that treat coughs and colds by suppressing coughs and helping ejection of the mucous.

Buyer Products:

  • Mucinex DM (Guaifenesin/Dextromethorphan Hydrobromide Extended Release)
  • Maximum Strength DM (Guaifenesin/Dextromethorphan Hydrobromide Extended Release)
  
Decongestants/Expectorants
Therapeutics that treat coughs and colds by reducing mucous build up and help in ejection of mucous.

Buyer Products:

  • Maximum Strength D (Guaifenesin/Pseudoephedrine HCl Extended Release)
  • Mucinex D (Guaifenesin/Pseudoephedrine HCl Extended Release)
  
Expectorants
Therapeutics that treat coughs and colds by helping in the ejection of mucous.

Buyer Products:

  • Guaifenesin Combination Extended-Release Product
  • Mucinex SE (Guaifenesin Extended Release)
  • Humibid SE (Guaifenesin Extended Release)
  
Outsourced Services  
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:

  • Directed Biosynthesis Program
  
High Throughput Screening (HTS)
Bioanalytical services that allow for the biological testing of up to 10,000 compounds each day.

Target Products:

  • Natural Products
  

- 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
Overlap
  Pfizer Inc. n/a 167,982.399 9.62 11.67 3.47 3.59 6.94
Wyeth n/a 61,476.991 13.77 13.47 2.88 2.88 5.25
MiddleBrook Pharmaceuticals, Inc. n/a 105.433 n/a -2.32 13.07 7.15 22.37
Buyer
  The Procter & Gamble Company n/a 204,008.980 20.04 19.05 2.67 2.54 n/a
Johnson & Johnson n/a 178,533.384 16.87 15.19 3.12 2.95 12.79
Pfizer Inc. n/a 167,982.399 9.62 11.67 3.47 3.59 6.94
Novartis AG (ADR) n/a 124,683.665 20.47 16.16 3.28 3.32 5.52
Wyeth n/a 61,476.991 13.77 13.47 2.88 2.88 5.25
Bayer AG (ADR) n/a 57,914.184 10.26 15.67 1.34 1.33 n/a
CVS Caremark Corporation n/a 55,074.890 30.26 19.96 0.96 0.73 n/a
Schering-Plough Corporation n/a 44,200.612 28.91 21.88 3.89 3.79 5.27
MiddleBrook Pharmaceuticals, Inc. n/a 105.433 n/a -2.32 13.07 7.15 22.37
Target
  Pfizer Inc. n/a 167,982.399 9.62 11.67 3.47 3.59 6.94
Abbott Laboratories n/a 80,147.194 41.62 18.76 3.32 3.23 466.15
Wyeth n/a 61,476.991 13.77 13.47 2.88 2.88 5.25
King Pharmaceuticals, Inc. n/a 3,556.579 11.55 8.11 1.72 1.72 2.62
Theravance, Inc. n/a 1,721.569 n/a -11.42 81.38 62.21 n/a
Immtech Pharmaceuticals, Inc. n/a 122.328 n/a n/a 38.21 n/a 9.95
Achillion Pharmaceuticals, Inc. n/a 115.130 n/a -3.50 42.78 31.20 3.46
MiddleBrook Pharmaceuticals, Inc. n/a 105.433 n/a -2.32 13.07 7.15 22.37
Shionogi & Co., Ltd. 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
Overlap
  Cardinal Health, Inc. n/a 24,427.141 12.65 16.37 0.28 0.26 16.11
Buyer
  Cardinal Health, Inc. n/a 24,427.141 12.65 16.37 0.28 0.26 16.11
UCB S.A. n/a n/a n/a n/a n/a n/a n/a
Boehringer Ingelheim GmbH n/a n/a n/a n/a n/a n/a n/a
Target
  Cardinal Health, Inc. n/a 24,427.141 12.65 16.37 0.28 0.26 16.11
WPP Group plc (ADR) n/a 16,891.961 18.99 16.48 1.40 1.43 n/a
Koninklijke DSM N.V. (ADR) n/a 8,995.000 17.00 20.16 0.76 n/a 1.45
Hospira, Inc. n/a 6,081.383 58.10 18.21 2.02 1.80 n/a
XTL Biopharmaceuticals Ltd. (ADR) n/a 29.721 n/a -12.50 65.54 55.04 3.28
ACS Dobfar 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
Overlap
  McKesson Corporation 10.00% 16,232.166 16.84 16.97 0.17 0.16 4.98
Buyer
  Wal-Mart Stores, Inc. 10.00% 174,171.095 13.91 14.11 0.48 0.47 3.64
CVS Caremark Corporation 10.00% 55,074.890 30.26 19.96 0.96 0.73 n/a
Walgreen Company 10.00% 43,869.573 21.33 21.57 0.84 0.83 4.02
McKesson Corporation 10.00% 16,232.166 16.84 16.97 0.17 0.16 4.98
Target
  Cardinal Health, Inc. 33.00% 24,427.141 12.65 16.37 0.28 0.26 16.11
AmerisourceBergen Corp. 32.00% 8,486.228 16.85 18.32 0.13 0.13 16.20
McKesson Corporation 21.00% 16,232.166 16.84 16.97 0.17 0.16 4.98
Novartis AG (ADR) n/a 124,683.665 20.47 16.16 3.28 3.32 5.52
Verenium Corporation n/a 347.409 n/a -7.99 6.74 7.50 18.38
Kuhnil Pharmaceutical Company 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
Overlap
  Cardinal Health, Inc. n/a 24,427.141 12.65 16.37 0.28 0.26 16.11
Buyer
  Wal-Mart Stores, Inc. n/a 174,171.095 13.91 14.11 0.48 0.47 3.64
CVS Caremark Corporation n/a 55,074.890 30.26 19.96 0.96 0.73 n/a
Target Corporation n/a 51,642.728 17.44 17.56 0.83 0.83 3.24
Walgreen Company n/a 43,869.573 21.33 21.57 0.84 0.83 4.02
Cardinal Health, Inc. n/a 24,427.141 12.65 16.37 0.28 0.26 16.11
Sears Holdings Corporation n/a 19,097.934 13.56 16.86 0.37 0.38 2.93
The Kroger Co. n/a 18,052.887 15.74 15.60 0.27 0.27 5.75
McKesson Corporation n/a 16,232.166 16.84 16.97 0.17 0.16 4.98
Safeway Inc. n/a 13,475.471 15.42 15.68 0.33 0.33 3.53
AmerisourceBergen Corp. n/a 8,486.228 16.85 18.32 0.13 0.13 16.20
Rite Aid Corporation n/a 3,964.165 341.38 -39.31 0.22 0.17 4.54
Target
  Novartis AG (ADR) n/a 124,683.665 20.47 16.16 3.28 3.32 5.52
AstraZeneca plc (ADR) n/a 71,144.677 11.85 12.19 2.55 2.47 n/a
Eli Lilly & Co. n/a 63,712.674 29.25 16.56 3.76 3.61 7.03
Cardinal Health, Inc. n/a 24,427.141 12.65 16.37 0.28 0.26 16.11
Koninklijke DSM N.V. (ADR) n/a 8,995.000 17.00 20.16 0.76 n/a 1.45
Hospira, Inc. n/a 6,081.383 58.10 18.21 2.02 1.80 n/a
Verenium Corporation n/a 347.409 n/a -7.99 6.74 7.50 18.38
XTL Biopharmaceuticals Ltd. (ADR) n/a 29.721 n/a -12.50 65.54 55.04 3.28
Medison Pharma Ltd. n/a n/a n/a n/a n/a n/a n/a
Oryx Pharmaceuticals Inc. n/a n/a n/a n/a n/a n/a n/a
ACS Dobfar n/a n/a n/a n/a n/a n/a n/a
Kuhnil Pharmaceutical Company n/a n/a n/a n/a n/a n/a n/a
TTY Biopharm Company Limited 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 331.6 235.7 567.3
Other Revenue 0.0 0.5 0.5
Total Revenue 331.6 236.1 567.7
Cost of Revenue 95.8 59.5 155.3
SG&A Expense 162.9 88.5 251.4
Depreciation & Amortization 0.0 0.0 0.0
Research & Development 23.9 63.2 87.0
Interest Expense -1.2 0.0 -1.2
Other Operating Expense 2.7 0.0 2.7
Total Expenses 284.0 211.1 495.2
Operating Income 47.6 25.0 72.6
Non Operating Items
Interest Expense (Inc.), Net Non-Oprtng 0.0 6.4 6.4
Other, Net 0.0 -0.0 -0.0
Income Before Taxes 47.6 31.4 78.9
Income Taxes 17.0 0.7 17.7
Income After Taxes 30.5 30.7 61.2
Net Income - Excl. Xord. Items 30.5 30.7 61.2
Net Income - Incl. Xord. Items 30.5 30.7 61.2
Income Avail. to Common 30.5 30.7 61.2
Share Items
Basic Avg. Shares Outstanding 35.6 55.4 91.1
Basic EPS - Excl. Xord. Items 0.86 0.55 0.67
Basic EPS - Incl. Xord. Items 0.86 0.55 0.67
Full Dilution Adjustment 0.0 2.3 2.3
Fully Diluted Shares Outstanding 35.6 68.8 104.4
F.D. EPS - Excl. Xord. Items 0.86 0.45 0.59
F.D. EPS - Incl. Xord. Items 0.86 0.45 0.59
Balance Sheet
Assets
Cash and Equivalents 46.8 82.2 129.0
ST Investments 33.0 260.4 293.4
Accounts Receivable 19.4 25.2 44.6
Inventory 52.9 14.0 66.9
Prepayments and Advances 3.3 4.9 8.2
Other Current Assets 11.9 0.0 11.9
Current Assets 167.3 386.7 554.0
PPE 23.0 0.0 23.0
Accum D&A -3.3 0.0 -3.3
PPE, Net 19.8 49.4 69.2
Goodwill & Intangibles 122.9 24.2 147.0
Long Term Investments 0.0 10.2 10.2
Other Assets 0.0 0.0 0.0
Other LT Assets 8.5 9.5 18.0
Total Assets 318.5 479.9 798.4
Liabilities
Accounts Payable 0.0 5.4 5.4
Payable/Accrued 24.0 0.0 24.0
Accrued Expenses 16.2 32.7 48.9
ST Debt 0.0 0.0 0.0
Other (Current) Liabilities 2.2 0.9 3.2
Current Liab. 42.4 39.0 81.5
LT Debt 0.0 350.0 350.0
Total LT Debt 0.0 350.0 350.0
Other LT Liab. 0.7 18.4 19.1
Total Liabilities 43.1 407.5 450.6
Shareholders Equity
Common Stock 0.4 0.1 0.4
Additional Paid in Capital 487.3 536.5 1,023.8
Retained Earnings -212.3 -464.1 -676.4
Other Equity -0.0 0.0 -0.0
Total Equity 275.3 72.5 347.8
Total Liab. & Equity 318.5 479.9 798.4
Shares Outstanding 35.7 55.5 91.2
Cash Flow
Operating Cash Flow
CF Net Income 30.5 30.7 61.2
CF Depreciation 3.2 11.0 14.2
CF Deferred Taxes -7.0 0.0 -7.0
Other Non-Cash Items 11.1 14.3 25.5
Change in Working Capital -31.6 20.5 -11.2
Total Cash From Operating Activities 6.3 76.5 82.8
Investing Cash Flow (not calculated)
Capital Expenditures -15.3 -5.8 -21.1
Other Investing Cash Flows 4.2 -213.3 -209.1
Total Cash From Investing Activities -11.1 -219.0 -230.2
Financing Cash Flow (not calculated)
Dividends Paid 0.0 0.0 0.0
Purchase Or Sale of Stock 3.1 10.0 13.1
Purchase and Retirement of Debt 0.0 -0.3 -0.3
Other Financing Cash Flow 8.3 0.0 8.3
Total Cash From Financing Activities 11.4 9.7 21.1
Exchange Rate Effects 0.0 0.0 0.0
Net Change in Cash 6.5 -132.8 -126.3
Cash Taxes Paid 15.9 0.0 15.9
Cash Interest Paid 0.3 8.7 8.9