Summary

Other Scenarios:

Buyer: ICON plc (ADR) (ICLR) Last Price: 55.17 Market Cap.: 1.59B
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
Healthcare Services   153
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: 10)
  • ICON Central Laboratories
  • ICON Clinical Research
  • ICON Clinical Trials Services
  • Beacon Bioscience, Inc.
Target (Total: 12)
  • SyncroDose
  • Geminex
  • TIMERx
  • Gastroretentive Drug Delivery System
Buyer
  • ICON Development Solutions
  • Beacon Bioscience, Inc.
  • Globomax LLC
  • ICON Contracting Solutions
Target
  • Nifedipine XL
  • PW2132 (Torsemide ER)
  • PW4110
  • PW4153

Business Relationship Summary:

Top Key Suppliers

Top Key Customers
Buyer (Total: 1)
  • Highwoods Properties, Inc. (HIW)
Target (Total: 2)
  • Mylan Inc. (MYL)
  • DRAXIS Health Inc. (USA) (DRAX)
Buyer (Total: 0)

n/a
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 5,150 75
Revenue Per Employee 134,351.7 35,697.8
Total Revenue 147.0 0.7
Total Expenses 131.0 9.9
Other Revenue 0.0 0.0
Cost of Revenue 83.9 0.1
SG&A Expense 42.7 3.7
Research & Development 0.0 6.0
Other Operating Expense 0.0 0.0
Operating Income 16.1 -9.1
Unusual Income 0.0 0.0
LT Debt to Capital 0.03 25.18
Fwd P/E 30.07 -5.18
Fwd P/Rev 2.61 64.18
Book Value 337.5 32.1
Curr Portion of LTD/Cap Lease 0.0 1.2

Individual Company Summary

Focused

Buyer

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

Target

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

Business Description

Buyer

ICON plc is a contract research organization (CRO) that provides outsourced development services on a global basis to the pharmaceutical, biotechnology and medical device industries. The Company specializes in the strategic development, management and analysis of programs that support clinical development from compound selection to Phase I to Phase IV clinical studies. It provides Phase I to Phase IV Clinical Trial Management, Drug Development Support Services, Data Management and Biostatistics, and Central Laboratory and Imaging Services. ICON plc provides these development services to clients on a standalone basis or as part of an integrated full-service solution. The Company operates through 49 offices in 30 countries. On July 10, 2006, the Company acquired Ovation Healthcare Research 2 Inc. In July 2007, the Company acquired DOCS International, a European clinical research staffing company.

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 % 42.95 85.73
Operating Margin % 10.73 -1,171.13
Quick Ratio 1.25 6.99
Current Ratio 1.96 7.23
Coverage Ratio 0.07 -0.05
Total Assets 521.9 51.4
Return on Equity % 14 -104.45
Return on Assets % 9.05 -65.22
Cash+ ST Inv. Per Share 3.61 1.62
Total Debt 16.1 12.0
Total Debt to Equity % 4.76 37.41
Total Debt to Tangible Equity % 6.22 41.44
Debt to Asset % 3.08 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.
  
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.
  
Healthcare Services  
Support Services
The Support Services Subsector is comprised of companies that provide non-medical services for managing, enhancing, facilitating, and enabling the healthcare delivery process.
  
Outsourced Services
Analytical Services
The Analytical Services Subsector includes outsourced services that utilize analytical instruments to analyze biological and chemical samples.

Buyer Products:

  • ICON Central Laboratories
  • ICON Clinical Research
  
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.
  

- 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
  
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
  
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)
  
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.

Buyer Products:

  • ICON Development Solutions
  • Beacon Bioscience, Inc.
  • Globomax LLC
  
Staffing/Recruiting  
Clinical  
Health Professionals
Staffing and recruiting of health professionals directly involved in the healthcare delivery process (i.e. physicians, physical therapists, occupational therapists, etc.).

Buyer Products:

  • ICON Contracting Solutions
  
General
Staffing and recruiting of personnel that are not directly involved with the delivery of healthcare but that are part of the overall healthcare delivery process (I.e. Hospital administrators, medical office staff, etc.).

Buyer Products:

  • DOCS International
  
Outsourced Services
Analytical Services
The Analytical Services Subsector includes outsourced services that utilize analytical instruments to analyze biological and chemical samples.

Buyer Products:

  • ICON Central Laboratories
  • ICON Clinical Research
  
Development/Manufacturing Services  
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:

  • ICON Clinical Trials Services
  • Beacon Bioscience, Inc.
  • Globomax LLC
  • The Oncology Solution
  • Medeval Group Ltd.
  • ICON Clinical Research
  
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
  

- 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
  UnitedHealth Group Inc. n/a 65,833.234 14.82 14.18 0.89 0.85 28.15
Covance Inc. n/a 5,023.149 32.00 29.70 3.36 3.26 5.84
Pharmaceutical Product Development, Inc. n/a 4,644.765 28.49 28.15 3.51 3.52 5.51
Omnicare, Inc. n/a 3,946.904 18.43 14.94 0.62 0.63 n/a
MDS Inc. (USA) n/a 2,652.969 3.27 52.68 2.34 2.29 6.16
inVentiv Health Inc. n/a 1,382.602 36.64 25.68 1.60 1.43 n/a
PAREXEL International Corporation n/a 1,252.822 33.60 27.68 1.36 1.39 6.31
PRA International n/a 739.110 41.98 34.66 1.94 2.07 37.65
Kendle International Inc. n/a 637.682 80.96 25.68 1.31 1.59 n/a
PharmaNet Development Group Inc. n/a 623.398 n/a 29.07 1.47 1.72 n/a
Encorium Group Inc. n/a 59.237 n/a n/a 1.98 n/a 18.22
Quintiles Transnational Corp. n/a n/a n/a n/a n/a n/a n/a
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
  Highwoods Properties, Inc. n/a 2,172.685 28.02 14.12 5.05 4.89 2.04
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
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
  Phase Forward Incorporated n/a 884.415 54.65 47.27 7.38 6.68 5.58
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 532.8 3.0 535.8
Other Revenue 0.0 0.0 0.0
Total Revenue 532.8 3.0 535.8
Cost of Revenue 304.0 0.4 304.4
SG&A Expense 155.2 14.2 169.4
Depreciation & Amortization 16.4 0.0 16.4
Research & Development 0.0 23.7 23.7
Interest Expense 0.0 0.0 0.0
Other Operating Expense 0.0 0.0 0.0
Total Expenses 475.6 38.3 513.9
Operating Income 57.2 -35.3 21.9
Non Operating Items
Interest Expense (Inc.), Net Non-Oprtng 4.1 1.8 5.9
Other, Net 0.0 0.0 0.0
Income Before Taxes 61.3 -33.5 27.8
Income Taxes 14.0 0.0 14.0
Income After Taxes 47.2 -33.5 13.7
Minority Interest (IS) -0.2 0.0 -0.2
Net Income - Excl. Xord. Items 47.0 -33.5 13.5
Net Income - Incl. Xord. Items 47.0 -33.5 13.5
Income Avail. to Common 47.0 -33.5 13.5
Share Items
Basic Avg. Shares Outstanding 28.7 23.2 51.9
Basic EPS - Excl. Xord. Items 1.64 n/a 0.26
Basic EPS - Incl. Xord. Items 1.64 n/a 0.26
Full Dilution Adjustment 0.0 0.0 0.0
Fully Diluted Shares Outstanding 29.7 23.2 52.9
F.D. EPS - Excl. Xord. Items 1.58 n/a 0.26
F.D. EPS - Incl. Xord. Items 1.58 n/a 0.26
Balance Sheet
Assets
Cash and Equivalents 78.3 21.0 99.3
ST Investments 28.7 16.6 45.3
Accounts Receivable 115.5 0.6 116.1
Inventory 0.0 0.4 0.4
Prepayments and Advances 15.3 0.9 16.2
Other Current Assets 109.3 0.0 109.3
Current Assets 347.1 39.5 386.7
Accum D&A 0.0 0.0 0.0
PPE, Net 91.2 3.6 94.9
Goodwill & Intangibles 79.4 3.1 82.5
Other Assets 0.0 0.0 0.0
Other LT Assets 4.1 5.1 9.2
Total Assets 521.9 51.4 573.3
Liabilities
Accounts Payable 11.3 1.3 12.6
Payable/Accrued 0.0 0.0 0.0
Accrued Expenses 0.0 2.6 2.6
ST Debt 15.9 0.0 15.9
Curr Port of LTD & Cap Lease Oblg 0.0 1.2 1.2
Other (Current) Liabilities 150.2 0.3 150.5
Current Liab. 177.4 5.5 182.9
LT Debt 0.0 10.8 10.8
Capitalized Lease Obligations 0.1 0.0 0.1
Total LT Debt 0.1 10.8 10.9
Minority Interest (BS) 1.2 0.0 1.2
Deferred Taxes 4.6 0.0 4.6
Other LT Liab. 1.1 3.0 4.2
Total Liabilities 184.4 19.3 203.7
Shareholders Equity
Common Stock 2.1 0.0 2.1
Additional Paid in Capital 140.8 220.3 361.1
Retained Earnings 177.7 -188.3 -10.6
Other Equity 16.8 0.1 16.9
Total Equity 337.5 32.1 369.6
Total Liab. & Equity 521.9 51.4 573.3
Shares Outstanding 28.7 23.4 52.1
Cash Flow
Operating Cash Flow
CF Net Income 47.0 -33.5 13.5
CF Depreciation 16.4 0.0 16.4
CF Deferred Taxes -1.9 0.0 -1.9
Other Non-Cash Items 5.0 0.0 5.0
Change in Working Capital -26.6 4.5 -22.1
Total Cash From Operating Activities 40.0 -29.0 11.0
Investing Cash Flow (not calculated)
Capital Expenditures -51.1 -2.4 -53.5
Other Investing Cash Flows 2.4 3.4 5.9
Total Cash From Investing Activities -48.6 1.1 -47.6
Financing Cash Flow (not calculated)
Dividends Paid 0.0 0.0 0.0
Purchase Or Sale of Stock 5.6 3.5 9.1
Purchase and Retirement of Debt 15.9 12.0 27.9
Other Financing Cash Flow 1.2 -0.1 1.1
Total Cash From Financing Activities 22.7 15.4 38.1
Exchange Rate Effects 1.0 0.0 1.0
Net Change in Cash 15.1 -12.6 2.6
Cash Taxes Paid 11.6 0.0 11.6
Cash Interest Paid 0.1 0.0 0.1