Summary

Other Scenarios:

Buyer: Array BioPharma Inc. (ARRY) Last Price: 11.74 Market Cap.: 551.79M
Target: DepoMed, Inc. (DEPO) Last Price: 4.94 Market Cap.: 234.50M

Lines of Business Summary:

Product Summary:

Overlap & Complementary Sectors

Sector Buyer Target # of Focused Companies
*Healthcare 908
Biopharmaceuticals 366
Outsourced Services 65

- 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: 12)
  • Analytical/Medicinal Chemistry
  • Array Discovery Platform
  • Optimer Building Block
  • High Throughput Screening
Target (Total: 8)
  • AcuForm Oral Drug Delivery Technology
Buyer
  • ARRY-162 (MEK Inhibitor)
  • ARRY-797 (p38 Inhibitor)
  • ARRY-614 (p38/Tie-2 inhibitor)
  • ARRY-520 (Kinesin Spindle Protein Inhibitor)
Target
  • Furosemide GR
  • GERD Program
  • Glumetza (Metformin GR)
  • Gabapentin GR

Business Relationship Summary:

Top Key Suppliers

Top Key Customers
Buyer (Total: 1)
  • BioMed Realty Trust, Inc. (BMR)
Target (Total: 1)
  • Biovail Corporation (USA) (BVF)
Buyer (Total: 3)
  • Genentech, Inc. (DNA)
  • InterMune, Inc. (ITMN)
  • AstraZeneca plc (ADR) (AZN)
Target (Total: 5)
  • Esprit Pharma Holding Company, Inc.
  • King Pharmaceuticals, Inc. (KG)
  • Biovail Corporation (USA) (BVF)
  • LG Electronics (LGLD:GB)

Key Financial Summary:

Key Metrics

  Buyer Target
Number of Employees 276 105
Revenue Per Employee 148,693.1 153,580.8
Total Revenue 10.4 3.8
Total Expenses 25.2 15.1
Other Revenue 0.0 0.0
Cost of Revenue 6.2 0.3
SG&A Expense 3.3 6.2
Research & Development 15.7 8.6
Other Operating Expense 0.0 0.0
Operating Income -14.8 -11.3
Unusual Income 0.0 0.0
LT Debt to Capital 28.39 0
Fwd P/E -8.63 -5.64
Fwd P/Rev 14.67 8.56
Book Value 37.8 -49.5
Curr Portion of LTD/Cap Lease 0.0 0.0

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 > Polymer Coated

Business Description

Buyer

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.

Target

Depomed, Inc. (Depomed) is a specialty pharmaceutical company engaged in the development and commercialization of products that are based on its oral drug delivery technologies. Depomed has developed two commercial products: GLUMETZA (metformin hydrochloride extended release tablets), which is a once-daily treatment for adults with type 2 diabetes that it jointly commercializes in the United States with King Pharmaceuticals, Inc. and ProQuin XR (ciprofloxacin hydrochloride extended release tablets), which is a once-daily treatment for uncomplicated urinary tract infections that Esprit Pharma, Inc. markets in the United States. Depomed has also developed Gabapentin GR, an extended release form of gabapentin. In addition, the Company has other product candidates in earlier stages of development, including a treatment for gastroesophageal reflux disease.

Deal Summary

Key Ratios

  Buyer Target
Gross Margin % 27.61 84.77
Operating Margin % -136.04 -369.97
Quick Ratio 2.84 1.44
Current Ratio 3 1.84
Coverage Ratio -0.06 0
Total Assets 108.0 37.0
Return on Equity % -132.77 n/a
Return on Assets % -46.53 -115.66
Cash+ ST Inv. Per Share 1.85 0.61
Total Debt 15.0 0.0
Total Debt to Equity % 39.64 0
Total Debt to Tangible Equity % 39.64 n/a
Debt to Asset % 13.89 0.00

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.
Endocrinology/Metabolism
The Endocrinology/Metabolism Subsector includes therapeutics that treat metabolic disorders and conditions resulting from the dysfunction of hormone secreting glands.
  
Immunology
The Immunology Subsector includes therapeutics that treat disorders affecting the immune system.
  
Infectious Diseases
The Infectious Diseases Subsector includes therapeutics that treat diseases caused by the invasion and reproduction of microorganisms in the body.
  
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  
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:

  • Furosemide GR
  
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)

Target Products:

  • GERD Program
Endocrinology/Metabolism  
Diabetes  
Non-Insulin Dependent Diabetes Mellitus (NIDDM)/Type 2 Diabetes  
Biguanides
Therapeutics that treat abnormally high blood glucose levels by decreasing the production of glucose in the liver, decreasing intestinal absorption of glucose and increasing peripheral uptake and utilization of glucose.

Target Products:

  • Glumetza (Metformin GR)
  
Phase I/Phase II Clinical Stage Products
Therapeutics that are being investigated for the treatment of endocrinology disorders in early stages of clinical research where human subject is involved.

Target Products:

  • Gabapentin GR
  
Research/Preclinical Stage Products
Therapeutics that are being investigated for the treatment of endocrinology disorders in very early stages of research where no human subject is involved.

Target Products:

  • Metformin/Sulfonylurea GR
  
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-797 (p38 Inhibitor)
  • ARRY-614 (p38/Tie-2 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)
  
Infectious Diseases  
Bacterial  
Antibacterial Agents  
Narrow Spectrum  
Urology  
Urinary Tract Infections (UTI)  
Antibacterial Agents (Antibiotics)  
Quinolones/Fluoroquinolones
Therapeutics that treat bacterial infections of the urethra, urinary bladder, ureters, and kidneys by promoting breakage of bacterial DNA strands.

Target Products:

  • Proquin XR (Ciprofloxacin Extended-Release)
  
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:

  • Gabapentin GR
  
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-520 (Kinesin Spindle Protein Inhibitor)
  • ARRY-886/AZD6244
  • ARRY-704/AZD8330 (MEK Inhibitor)
  • ARRY-797 (p38 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-614 (p38/Tie-2 inhibitor)
  • ARRY-543 (EGFR/ErbB-2 Inhibitors)
  • ARRY-380 (ErbB-2 Inhibitor)

Target Products:

  • NeuGene Antisense Compound
Pain Management  
Non-Narcotics  
Gamma-Aminobutyric Acid (GABA) Reuptake Inhibitors
Therapeutics that treat pain by inhibiting the reuptake of GABA, which increases the levels of GABA in the synapses.

Target Products:

  • Gabapentin GR
  
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:

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

Target Products:

  • AcuForm Oral Drug Delivery Technology
  
Drug Discovery Services  
Lead Discovery/Validation/Optimization  
Combinatorial Services
Drug discovery companies that provide biopharmaceutical companies combinatorial chemistry services.

Buyer Products:

  • Array Discovery Platform
  • Optimer Building Block
  
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 3,764.635 n/a -10.07 15.30 12.57 7.51
Theravance, Inc. n/a 1,955.350 n/a -12.96 94.50 63.58 96.11
Target
  Pfizer Inc. n/a 181,913.371 9.77 12.05 3.71 3.81 6.48
Johnson & Johnson n/a 179,963.150 17.44 15.42 3.25 2.98 15.39
GlaxoSmithKline plc (ADR) n/a 147,509.658 13.61 13.29 3.20 3.23 13.91
Merck & Co., Inc. n/a 107,193.319 23.21 17.00 4.66 4.63 6.63
Abbott Laboratories n/a 83,179.438 53.69 19.30 3.68 3.72 n/a
Wyeth n/a 76,902.793 17.76 16.39 3.68 3.55 7.16
Bristol Myers Squibb Co. n/a 62,092.452 39.78 22.63 3.51 3.22 16.99
Bayer AG (ADR) n/a 58,900.185 11.37 17.48 1.45 1.33 n/a
Schering-Plough Corporation n/a 45,471.048 36.41 24.26 4.13 3.88 5.89
Teva Pharmaceutical Industries Ltd (ADR) n/a 32,986.239 17.39 18.51 3.74 3.60 24.33
Barr Pharmaceuticals, Inc. n/a 5,667.418 n/a 16.50 3.03 2.25 n/a
Mylan Laboratories Inc. n/a 4,489.333 20.66 10.63 2.79 2.10 6.57
Biovail Corporation (USA) n/a 4,076.580 17.20 13.66 3.73 4.73 7.30
Alpharma Inc. n/a 1,164.954 19.07 20.53 1.76 1.66 2.52
XenoPort, Inc. n/a 1,127.551 n/a -42.04 43.61 17.48 13.67
Sciele Pharma Inc. n/a 859.335 17.50 14.76 2.78 2.30 8.17
Flamel Technologies S.A. (ADR) n/a 566.178 n/a 201.36 20.55 4.87 8.32
SkyePharma PLC (ADR) n/a 415.644 n/a -15.63 4.09 3.22 n/a
Isolagen, Inc. n/a 125.156 n/a n/a 27.16 n/a n/a
MiddleBrook Pharmaceuticals, Inc. n/a 114.999 n/a -2.25 20.09 7.90 n/a
Access Pharmaceuticals, Inc. n/a 18.207 n/a n/a n/a n/a n/a
A.P. Pharma, Inc. n/a 15.518 n/a -0.96 n/a n/a 2.49
Carrington Laboratories, Inc. n/a 12.645 n/a n/a 0.51 n/a 8.76

- 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% 1,699.171 36.46 14.27 6.88 6.41 1.19
Target
  Biovail Corporation (USA) n/a 4,076.580 17.20 13.66 3.73 4.73 7.30

- 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% 79,093.064 32.98 28.62 7.80 6.89 9.43
InterMune, Inc. 24.00% 932.358 n/a -11.09 10.74 15.61 n/a
AstraZeneca plc (ADR) 16.00% 80,661.840 13.06 13.13 2.96 2.81 8.53
Target
  Esprit Pharma Holding Company, Inc. 48.20% n/a n/a n/a n/a n/a n/a
King Pharmaceuticals, Inc. n/a 5,080.382 14.34 11.70 2.51 2.46 4.33
Biovail Corporation (USA) n/a 4,076.580 17.20 13.66 3.73 4.73 7.30
LG Electronics n/a n/a n/a n/a n/a n/a n/a
Madaus AG 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 155,002.470 23.70 20.19 4.44 3.95 6.66
Siemens AG (ADR) n/a 133,661.565 30.10 19.02 1.16 1.18 9.11
AstraZeneca plc (ADR) n/a 80,661.840 13.06 13.13 2.96 2.81 8.53
Genentech, Inc. n/a 79,093.064 32.98 28.62 7.80 6.89 9.43
Eli Lilly & Co. n/a 64,232.194 27.49 16.73 3.96 3.63 7.04
Amgen, Inc. n/a 63,571.743 20.78 13.55 4.31 4.28 13.24
InterMune, Inc. n/a 932.358 n/a -11.09 10.74 15.61 n/a
Trimeris, Inc. n/a 145.417 9.11 10.90 3.09 3.08 3.26
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
  Shire plc (ADR) n/a 13,990.911 42.42 37.53 7.31 6.28 7.20
King Pharmaceuticals, Inc. n/a 5,080.382 14.34 11.70 2.51 2.46 4.33
Biovail Corporation (USA) n/a 4,076.580 17.20 13.66 3.73 4.73 7.30
Patheon, Inc. n/a 373.694 n/a n/a 0.52 n/a 1.77
AVI BioPharma, Inc. n/a 153.376 n/a -6.53 261.88 8.86 5.41
Boehringer Ingelheim GmbH n/a n/a n/a n/a n/a n/a n/a
LG Electronics n/a n/a n/a n/a n/a n/a n/a
Madaus AG 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 39.1 12.0 51.1
Other Revenue 0.0 0.0 0.0
Total Revenue 39.1 12.0 51.1
Cost of Revenue 28.3 1.8 30.1
SG&A Expense 13.4 25.0 38.3
Depreciation & Amortization 0.0 0.0 0.0
Research & Development 50.6 29.8 80.4
Interest Expense 0.0 0.0 0.0
Other Operating Expense 0.0 0.0 0.0
Total Expenses 92.3 56.6 148.8
Operating Income -53.2 -44.5 -97.7
Non Operating Items
Interest Expense (Inc.), Net Non-Oprtng 2.9 0.0 2.9
Other, Net 0.0 1.8 1.8
Income Before Taxes -50.2 -42.7 -92.9
Income Taxes 0.0 0.1 0.1
Income After Taxes -50.2 -42.8 -93.0
Net Income - Excl. Xord. Items -50.2 -42.8 -93.0
Net Income - Incl. Xord. Items -50.2 -42.8 -93.0
Preferred Dividends 0.0 -0.7 -0.7
Income Avail. to Common -50.2 -43.4 -93.7
Share Items
Basic Avg. Shares Outstanding 40.0 42.1 82.0
Basic EPS - Excl. Xord. Items n/a n/a -1.13
Basic EPS - Incl. Xord. Items n/a n/a -1.13
Full Dilution Adjustment 0.0 0.0 0.0
Fully Diluted Shares Outstanding 40.0 42.1 82.0
F.D. EPS - Excl. Xord. Items n/a n/a -1.13
F.D. EPS - Incl. Xord. Items n/a n/a -1.13
Balance Sheet
Assets
Cash and Equivalents 20.3 5.2 25.5
ST Investments 53.6 20.6 74.2
Accounts Receivable 2.1 1.1 3.2
Inventory 1.5 4.4 5.9
Prepayments and Advances 2.9 3.3 6.2
Other Current Assets 0.0 0.0 0.0
Current Assets 80.4 34.5 114.9
PPE 69.6 0.0 69.6
Accum D&A -43.5 0.0 -43.5
PPE, Net 26.0 2.3 28.3
Goodwill & Intangibles 0.0 0.0 0.0
Long Term Investments 1.5 0.0 1.5
Other Assets 0.0 0.0 0.0
Other LT Assets 0.0 0.2 0.2
Total Assets 108.0 37.0 144.9
Liabilities
Accounts Payable 8.8 4.6 13.3
Payable/Accrued 0.0 0.0 0.0
Accrued Expenses 5.2 5.6 10.8
ST Debt 0.0 0.0 0.0
Other (Current) Liabilities 12.9 8.5 21.4
Current Liab. 26.8 18.7 45.5
LT Debt 15.0 0.0 15.0
Total LT Debt 15.0 0.0 15.0
Other LT Liab. 28.3 55.8 84.1
Total Liabilities 70.1 74.5 144.6
Shareholders Equity
Preferred Stock 0.0 12.0 12.0
Common Stock 0.0 145.5 145.5
Additional Paid in Capital 209.7 0.0 209.7
Retained Earnings -171.8 -195.0 -366.8
Other Equity -0.0 -0.0 -0.0
Total Equity 37.8 -37.5 0.4
Total Liab. & Equity 108.0 37.0 144.9
Shares Outstanding 40.0 42.1 82.1
Cash Flow
Operating Cash Flow
CF Net Income -50.2 -42.8 -93.0
CF Depreciation 6.9 1.2 8.1
CF Deferred Taxes 0.0 0.0 0.0
Other Non-Cash Items 1.4 2.5 4.0
Change in Working Capital 8.9 9.2 18.1
Total Cash From Operating Activities -33.0 -29.8 -62.8
Investing Cash Flow (not calculated)
Capital Expenditures -5.5 -0.6 -6.1
Other Investing Cash Flows 37.6 26.0 63.6
Total Cash From Investing Activities 32.1 25.4 57.5
Financing Cash Flow (not calculated)
Dividends Paid 0.0 0.0 0.0
Purchase Or Sale of Stock 3.9 1.4 5.3
Purchase and Retirement of Debt 1.6 0.0 1.6
Other Financing Cash Flow 0.0 0.0 0.0
Total Cash From Financing Activities 5.4 1.4 6.9
Exchange Rate Effects 0.0 0.0 0.0
Net Change in Cash 4.6 -3.0 1.5
Cash Taxes Paid 0.0 0.1 0.1
Cash Interest Paid 0.9 0.0 0.9