Summary

Other Scenarios:

Buyer: Array BioPharma Inc. (ARRY) Last Price: 11.35 Market Cap.: 534.81M
Target: Penwest Pharmaceuticals (PPCO) Last Price: 8.55 Market Cap.: 200.03M

Lines of Business Summary:

Product Summary:

Overlap & Complementary Sectors

Sector Buyer Target # of Focused Companies
Healthcare 931
Biopharmaceuticals 377
Outsourced Services 69

- 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: 13)
  • Analytical/Medicinal Chemistry
  • Array Discovery Platform
  • Optimer Building Block
  • High Throughput Screening
Target (Total: 12)
  • SyncroDose
  • Geminex
  • TIMERx
  • Gastroretentive Drug Delivery System
Buyer
  • ARRY-162 (MEK Inhibitor)
  • ARRY-614 (p38/Tie-2 inhibitor)
  • ARRY-797 (p38 Inhibitor)
  • ARRY-380 (ErbB-2 Inhibitor)
Target
  • Nifedipine XL
  • PW2132 (Torsemide ER)
  • PW4110
  • PW4153

Business Relationship Summary:

Top Key Suppliers

Top Key Customers
Buyer (Total: 1)
  • BioMed Realty Trust, Inc. (BMR)
Target (Total: 2)
  • Mylan Inc. (MYL)
  • DRAXIS Health Inc. (USA) (DRAX)
Buyer (Total: 3)
  • Genentech, Inc. (DNA)
  • InterMune, Inc. (ITMN)
  • AstraZeneca plc (ADR) (AZN)
Target (Total: 4)
  • Mylan Inc. (MYL)
  • sanofi-aventis (ADR) (SNY)
  • Endo Pharmaceuticals (ENDP)
  • Merck KGaA

Key Financial Summary:

Key Metrics

  Buyer Target
Number of Employees 311 75
Revenue Per Employee 103,587.0 35,697.8
Total Revenue 8.0 0.7
Total Expenses 26.5 9.9
Other Revenue 0.0 0.0
Cost of Revenue 6.3 0.1
SG&A Expense 4.1 3.7
Research & Development 16.1 6.0
Other Operating Expense 0.0 0.0
Operating Income -18.5 -9.1
Unusual Income 0.0 0.0
LT Debt to Capital 12.22 25.18
Fwd P/E -6.24 -5.18
Fwd P/Rev 14.98 64.18
Book Value 107.7 32.1
Curr Portion of LTD/Cap Lease 0.0 1.2

Individual Company Summary

Focused

Buyer

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

Target

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

Business Description

Buyer

Array BioPharma Inc. is a biopharmaceutical company focused on the discovery, development and commercialization of targeted small molecule drugs to treat cancer and inflammatory diseases. The Company has 10 programs in its development pipeline, eight of which are wholly owned by the Company. The eight development programs that the Company wholly owns and controls consist of ARRY-543, an ErbB-2/EFGR dual inhibitor for cancer; ARRY-162, a Mitogen-activated Protein/Extracellular Signal-regulated Kinase Kinase (MEK) inhibitor for inflammation; ARRY-797, a p38 inhibitor for inflammation and for cancer; ARRY-520, a kinesin spindle protein (KSP) inhibitor for cancer; ARRY-380, an ErbB-2 inhibitor for cancer; and ARRY-614, a p38/Tie 2 dual inhibitor for inflammation and for cancer.

Target

Penwest Pharmaceuticals Co. (Penwest) develops pharmaceutical products based on drug delivery technologies with a focus on products that address disorders of the nervous system. In June 2006, the United States Food and Drug Administration (FDA), approved for marketing Opana ER, an extended release formulation of oxymorphone hydrochloride that the Company developed with Endo Pharmaceuticals Inc (Endo), using its TIMERx drug delivery technology. Penwest is also developing product candidates designed for the treatment of pain, epilepsy, Parkinson?s disease and spasticity, as well as a product candidate 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 % 32.55 85.73
Operating Margin % -159.79 -1,171.13
Quick Ratio 5.76 6.99
Current Ratio 5.92 7.23
Coverage Ratio -0.06 -0.05
Total Assets 175.0 51.4
Return on Equity % -51.48 -104.45
Return on Assets % -31.69 -65.22
Cash+ ST Inv. Per Share 3.19 1.62
Total Debt 15.0 12.0
Total Debt to Equity % 13.93 37.41
Total Debt to Tangible Equity % 13.93 41.44
Debt to Asset % 8.57 23.36

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.
  
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.

Target Products:

  • Nifedipine XL
  
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:

  • Nifedipine XL
  
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:

  • ARRY-162 (MEK Inhibitor)
  
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:

  • ARRY-614 (p38/Tie-2 inhibitor)
  • ARRY-797 (p38 Inhibitor)
  
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.

Buyer Products:

  • ARRY-614 (p38/Tie-2 inhibitor)
  
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:

  • ARRY-162 (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.

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
  • PW4159
  • PW4158
  
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:

  • ARRY-380 (ErbB-2 Inhibitor)
  • ARRY-886/AZD6244 (MEK Inhibitor)
  • ARRY-520 (Kinesin Spindle Protein Inhibitor)
  • ARRY-704/AZD8330 (MEK Inhibitor)
  • ARRY-797 (p38 Inhibitor)
  • ICOS IC83 (CHK-1 Inhibitor)
  • ARRY-543 (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.

Buyer Products:

  • ARRY-380 (ErbB-2 Inhibitor)
  • ARRY-614 (p38/Tie-2 inhibitor)
  • ARRY-543 (EGFR/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.

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.

Target Products:

  • PW4142 (Nalbuphine ER)
  
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.

Buyer Products:

  • Analytical/Medicinal Chemistry
  
Contract Research Organizations (CRO)  
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:

  • Array Discovery Platform
  
Preclinical
Limited Service Contract Research Organizations that design, manage, and monitor animal studies of new therapeutics. In addition to animal studies, these limited service companies also provide formulation development services.

Buyer Products:

  • Array Discovery Platform
  
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:

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

Target Products:

  • Gastroretentive Drug Delivery System
  
Drug Discovery Services  
Lead Discovery/Validation/Optimization  
Combinatorial Services
Drug discovery companies that provide biopharmaceutical companies combinatorial chemistry services.

Buyer Products:

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

Buyer 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
  Vertex Pharmaceuticals Incorporated n/a 4,713.187 n/a -12.73 18.52 16.93 11.37
Theravance, Inc. n/a 1,633.003 n/a -9.60 77.19 53.19 n/a
Exelixis, Inc. n/a 1,159.117 n/a -11.31 10.47 8.71 n/a
Incyte Corporation n/a 714.123 n/a -7.73 22.09 21.62 n/a
Arena Pharmaceuticals, Inc. n/a 648.377 n/a -3.96 34.42 25.45 1.86
ArQule, Inc. n/a 333.368 n/a -4.96 46.23 36.60 3.13
Cytokinetics, Inc. n/a 281.791 n/a -4.25 42.41 23.31 2.53
deCODE genetics, Inc. n/a 223.446 n/a -2.53 6.18 6.05 n/a
Avalon Pharmaceuticals, Inc. n/a 95.556 n/a -3.46 37.09 38.00 2.65
Target
  Johnson & Johnson n/a 190,863.999 18.04 16.24 3.34 3.16 13.68
Elan Corporation, plc (ADR) n/a 10,448.804 n/a -34.81 15.97 14.04 n/a
Biovail Corporation (USA) n/a 2,858.171 13.02 10.20 2.75 3.44 4.70
King Pharmaceuticals, Inc. n/a 2,574.611 8.36 5.85 1.25 1.23 1.90
K-V Pharmaceutical Company n/a 1,505.213 31.66 n/a 3.96 n/a 6.07
Alpharma Inc. n/a 929.815 16.08 22.14 1.36 1.29 1.93
Eurand N.V. n/a 731.542 n/a -79.52 6.39 6.35 9.57
Ligand Pharmaceuticals Inc. n/a 603.788 1.51 2.18 8.33 n/a 12.96
SkyePharma PLC (ADR) n/a 256.721 n/a -4.63 2.48 3.36 n/a
SCOLR Pharma Inc. n/a 128.925 n/a n/a 37.40 n/a 9.30
BioDelivery Sciences International, Inc. n/a 66.577 n/a -2.23 24.06 n/a n/a
Elite Pharmaceuticals, Inc. n/a 49.101 n/a -4.42 35.58 6.30 3.48
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
  BioMed Realty Trust, Inc. 3.60% 1,655.555 30.88 13.81 6.24 6.24 1.15
Target
  Mylan Inc. n/a 3,903.698 17.63 12.21 2.17 1.39 5.06
DRAXIS Health Inc. (USA) n/a 226.270 22.92 26.80 2.63 2.60 2.15

- 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
  Genentech, Inc. 35.00% 81,346.724 31.11 27.75 7.43 6.82 8.93
InterMune, Inc. 24.00% 696.704 n/a -7.96 7.92 9.98 n/a
AstraZeneca plc (ADR) 16.00% 77,334.217 12.88 13.12 2.77 2.64 n/a
Target
  Mylan Inc. 89.10% 3,903.698 17.63 12.21 2.17 1.39 5.06
sanofi-aventis (ADR) n/a 120,772.157 22.87 12.33 2.99 3.11 n/a
Endo Pharmaceuticals n/a 3,759.637 21.20 16.09 3.80 3.55 4.11
Merck KGaA 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
  Roche Holding Ltd. (ADR) n/a 158,366.482 21.04 19.17 4.13 4.04 6.18
Siemens AG (ADR) n/a 125,069.533 20.31 21.69 1.09 1.18 8.81
Genentech, Inc. n/a 81,346.724 31.11 27.75 7.43 6.82 8.93
AstraZeneca plc (ADR) n/a 77,334.217 12.88 13.12 2.77 2.64 n/a
Eli Lilly & Co. n/a 66,389.582 30.48 16.82 3.91 3.66 7.32
Amgen, Inc. n/a 63,215.722 15.55 14.21 4.25 4.31 37.97
Celgene Corporation n/a 28,322.019 181.97 75.16 24.39 19.47 13.18
InterMune, Inc. n/a 696.704 n/a -7.96 7.92 9.98 n/a
Trimeris, Inc. n/a 175.415 8.36 10.79 3.59 3.47 3.51
Takeda Pharmaceutical Company Limited n/a n/a n/a n/a n/a n/a n/a
Ono Pharmaceutical Co., Ltd. n/a n/a n/a n/a n/a n/a n/a
VentiRx 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
Target
  sanofi-aventis (ADR) n/a 120,772.157 22.87 12.33 2.99 3.11 n/a
Mylan Inc. n/a 3,903.698 17.63 12.21 2.17 1.39 5.06
Endo Pharmaceuticals n/a 3,759.637 21.20 16.09 3.80 3.55 4.11
DRAXIS Health Inc. (USA) n/a 226.270 22.92 26.80 2.63 2.60 2.15
Pharmaceutics International, Inc. n/a n/a n/a n/a n/a n/a n/a
Edison Pharmaceuticals, Inc. n/a n/a n/a n/a n/a n/a n/a
Merck KGaA n/a n/a n/a n/a n/a n/a n/a
Otsuka Pharmaceutical Co., Ltd. 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 37.0 3.0 40.0
Other Revenue 0.0 0.0 0.0
Total Revenue 37.0 3.0 40.0
Cost of Revenue 24.9 0.4 25.4
SG&A Expense 13.6 14.2 27.8
Depreciation & Amortization 0.0 0.0 0.0
Research & Development 57.5 23.7 81.2
Interest Expense 0.0 0.0 0.0
Other Operating Expense 0.0 0.0 0.0
Total Expenses 96.0 38.3 134.3
Operating Income -59.1 -35.3 -94.4
Non Operating Items
Interest Expense (Inc.), Net Non-Oprtng 3.6 1.8 5.4
Other, Net 0.0 0.0 0.0
Income Before Taxes -55.4 -33.5 -88.9
Income Taxes 0.0 0.0 0.0
Income After Taxes -55.4 -33.5 -88.9
Net Income - Excl. Xord. Items -55.4 -33.5 -88.9
Net Income - Incl. Xord. Items -55.4 -33.5 -88.9
Income Avail. to Common -55.4 -33.5 -88.9
Share Items
Basic Avg. Shares Outstanding 44.3 23.2 67.5
Basic EPS - Excl. Xord. Items n/a n/a -1.32
Basic EPS - Incl. Xord. Items n/a n/a -1.32
Full Dilution Adjustment 0.0 0.0 0.0
Fully Diluted Shares Outstanding 44.3 23.2 67.5
F.D. EPS - Excl. Xord. Items n/a n/a -1.32
F.D. EPS - Incl. Xord. Items n/a n/a -1.32
Balance Sheet
Assets
Cash and Equivalents 10.7 21.0 31.7
ST Investments 130.7 16.6 147.3
Accounts Receivable 0.2 0.6 0.8
Inventory 1.5 0.4 1.9
Prepayments and Advances 2.4 0.9 3.3
Other Current Assets 0.0 0.0 0.0
Current Assets 145.4 39.5 184.9
PPE 73.0 0.0 73.0
Accum D&A -44.9 0.0 -44.9
PPE, Net 28.1 3.6 31.7
Goodwill & Intangibles 0.0 3.1 3.1
Other Assets 0.0 0.0 0.0
Other LT Assets 1.5 5.1 6.6
Total Assets 175.0 51.4 226.3
Liabilities
Accounts Payable 10.1 1.3 11.4
Payable/Accrued 0.0 0.0 0.0
Accrued Expenses 6.8 2.6 9.4
ST Debt 0.0 0.0 0.0
Curr Port of LTD & Cap Lease Oblg 0.0 1.2 1.2
Other (Current) Liabilities 7.7 0.3 8.0
Current Liab. 24.6 5.5 30.0
LT Debt 15.0 10.8 25.8
Total LT Debt 15.0 10.8 25.8
Other LT Liab. 27.7 3.0 30.7
Total Liabilities 67.3 19.3 86.6
Shareholders Equity
Common Stock 0.0 0.0 0.1
Additional Paid in Capital 296.8 220.3 517.1
Retained Earnings -189.1 -188.3 -377.4
Other Equity -0.0 0.1 0.1
Total Equity 107.7 32.1 139.8
Total Liab. & Equity 175.0 51.4 226.3
Shares Outstanding 47.1 23.4 70.5
Cash Flow
Operating Cash Flow
CF Net Income -55.4 -33.5 -88.9
CF Depreciation 6.4 0.0 6.4
CF Deferred Taxes 0.0 0.0 0.0
Other Non-Cash Items 0.8 0.0 0.8
Change in Working Capital 3.7 4.5 8.1
Total Cash From Operating Activities -44.5 -29.0 -73.6
Investing Cash Flow (not calculated)
Capital Expenditures -7.1 -2.4 -9.5
Other Investing Cash Flows -43.5 3.4 -40.1
Total Cash From Investing Activities -50.7 1.1 -49.6
Financing Cash Flow (not calculated)
Dividends Paid 0.0 0.0 0.0
Purchase Or Sale of Stock 89.4 3.5 93.0
Purchase and Retirement of Debt 0.8 12.0 12.8
Other Financing Cash Flow 0.0 -0.1 -0.1
Total Cash From Financing Activities 90.3 15.4 105.7
Exchange Rate Effects 0.0 0.0 0.0
Net Change in Cash -4.9 -12.6 -17.5
Cash Interest Paid 1.0 0.0 1.0