Summary

Other Scenarios:

Buyer: inVentiv Health Inc. (VTIV) Last Price: 37.80 Market Cap.: 1.18B
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
Healthcare Services   155
Outsourced Services 65
Services   390
Business Services   207

- 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: 18)
  • Synergos, Inc.
  • HHI Clinical & Statistical Research Services
  • PromoTech Research Associates, Inc.
  • Creative Healthcare Solutions, LLC
Target (Total: 8)
  • AcuForm Oral Drug Delivery Technology
Buyer
  • inVentiv Pharma Analytics
  • Creative Healthcare Solutions, LLC
  • HHI Clinical & Statistical Research Services
  • Adheris, Inc.
Target
  • Furosemide GR
  • GERD Program
  • Glumetza (Metformin GR)
  • Gabapentin GR

Business Relationship Summary:

Top Key Suppliers

Top Key Customers
Buyer (Total: 0)

n/a
Target (Total: 1)
  • Biovail Corporation (USA) (BVF)
Buyer (Total: 10)
  • Johnson & Johnson (JNJ)
  • GlaxoSmithKline plc (ADR) (GSK)
  • Novartis AG (ADR) (NVS)
  • sanofi-aventis (ADR) (SNY)
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 5,200 105
Revenue Per Employee 171,203.7 153,580.8
Total Revenue 222.0 3.8
Total Expenses 203.4 15.1
Other Revenue 45.6 0.0
Cost of Revenue 162.8 0.3
SG&A Expense 40.6 6.2
Research & Development 0.0 8.6
Other Operating Expense 0.0 0.0
Operating Income 18.5 -11.3
Unusual Income 0.0 0.0
LT Debt to Capital 31.12 0
Fwd P/E 22.60 -5.64
Fwd P/Rev 1.23 8.56
Book Value 403.4 -49.5
Curr Portion of LTD/Cap Lease 13.3 0.0

Individual Company Summary

Focused

Buyer

Focused (): *Healthcare > Outsourced Services > Development/Manufacturing Services > Sales/Marketing

Target

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

Business Description

Buyer

inVentiv Health Inc. (inVentiv) (formerly Ventiv Health, Inc.) is a provider of value-added services to the pharmaceutical and life sciences industries. inVentiv supports a range of clinical development, communications and commercialization activities in the development of drug products and medical devices. The Company provides services to over 200 client organizations, including 20 global pharmaceutical companies, and numerous emerging and specialty biotechnology companies. inVentiv is organized into three operating segments: inVentiv Clinical, inVentiv Communications and inVentiv Commercial. During the year ended December 31, 2006, inVentiv acquired The Maxwell Group, Inc. and its MedConference brand of services (MedConference), American Speakers Education Research Training LLC; DialogCoach LLC, Synergos, Inc., Jeffrey Simbrow Associates Inc. (JSAI), Synergos, LLP (Synergos), Adheris.

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 % 28.21 84.77
Operating Margin % 9.54 -369.97
Quick Ratio 1.43 1.44
Current Ratio 1.53 1.84
Coverage Ratio -0.13 0
Total Assets 782.7 37.0
Return on Equity % 12.36 n/a
Return on Assets % 6.37 -115.66
Cash+ ST Inv. Per Share 1.48 0.61
Total Debt 220.6 0.0
Total Debt to Equity % 54.68 0
Total Debt to Tangible Equity % n/a n/a
Debt to Asset % 28.18 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.
  
Infectious Diseases
The Infectious Diseases Subsector includes therapeutics that treat diseases caused by the invasion and reproduction of microorganisms in the body.
  
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.
  
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
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.
  
Services  
Business Services  
Professional Services
Includes accounting, advertising, consulting, legal, and printing services.
  

- 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.

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
  
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)
  
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  
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.

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
  
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:

  • inVentiv Pharma Analytics
  • Creative Healthcare Solutions, LLC
  • HHI Clinical & Statistical Research Services
  
Education Services
Services providing education materials, seminars, and related learning tools to the healthcare industry.

Buyer Products:

  • Adheris, Inc.
  • The Therapeutics Institute
  • inVentiv Pharma Services
  • ASERT LLC
  • DialogCoach
  
Staffing/Recruiting  
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:

  • Smith Hanley 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.

Buyer Products:

  • Synergos, Inc.
  
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:

  • HHI Clinical & Statistical Research Services
  
Packaging Services
Outsourced companies that provide packaging services for healthcare products.

Buyer Products:

  • PromoTech Research Associates, Inc.
  
Sales/Marketing
Outsourced companies that provide biopharmaceutical and medical device companies with contract sales and marketing services.

Buyer Products:

  • Creative Healthcare Solutions, LLC
  • inVentiv Pharma Analytics
  • Jeffrey Simbrow Associates Inc. (JSAI)
  • InVentiv Commercial
  • JSAI
  • GSW Worldwide
  • PromoTech Research Associates, Inc.
  • inChord Communications Inc.
  
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
  
Services  
Business Services  
Professional Services  
Advertising and Marketing Services  
Advertising Agencies
Companies which provide integrated advertising, marketing and communications services. These services include creating advertisements and advertising campaigns; brand consultancy services, creative services; media buying (procurement of airtime/ad space on radio, television, print, and the internet), and public relations. These companies generally offer the complete range of services which appear in the other sectors of the Advertising and Related Services sector.

Buyer Products:

  • Addison Whitney
  
Business Event/Conference Organizers
Venue and event management, as well as related services, for conferences and other offsite business events.

Buyer Products:

  • MedConference
  

- 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
  WPP Group plc (ADR) n/a 18,332.232 20.97 17.12 1.55 1.50 n/a
Omnicom Group Inc. n/a 17,403.388 19.75 18.35 1.49 1.41 n/a
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
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
  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
Novartis AG (ADR) n/a 129,466.663 23.72 16.80 3.39 3.47 3.20
sanofi-aventis (ADR) n/a 113,757.479 20.79 11.62 2.82 2.91 n/a
Eli Lilly & Co. n/a 64,232.194 27.49 16.73 3.96 3.63 7.04
Bristol Myers Squibb Co. n/a 62,092.452 39.78 22.63 3.51 3.22 16.99
Allergan, Inc. n/a 17,560.146 48.62 26.47 5.28 4.77 286.00
Cephalon, Inc. n/a 5,355.378 24.74 20.05 2.90 3.03 30.97
Altana AG (ADR) n/a 3,541.994 5.30 n/a 1.40 n/a 1.55
Boehringer Ingelheim GmbH n/a n/a n/a n/a n/a n/a n/a
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
  Santarus, Inc. n/a 279.659 n/a -4.97 4.53 2.79 8.90
ClinPhone PLC n/a n/a n/a n/a n/a n/a n/a
SIRO Clinpharm Pvt. Ltd. n/a n/a n/a n/a n/a n/a n/a
Heart Reklambyra AB n/a n/a n/a n/a n/a n/a n/a
Angela Liedler GmbH 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 665.1 12.0 677.1
Other Revenue 149.5 0.0 149.5
Total Revenue 814.5 12.0 826.6
Cost of Revenue 584.8 1.8 586.6
SG&A Expense 152.0 25.0 177.0
Depreciation & Amortization 0.0 0.0 0.0
Research & Development 0.0 29.8 29.8
Interest Expense 0.0 0.0 0.0
Other Operating Expense 0.0 0.0 0.0
Total Expenses 736.8 56.6 793.4
Operating Income 77.7 -44.5 33.2
Non Operating Items
Interest Expense (Inc.), Net Non-Oprtng -10.5 0.0 -10.5
Other, Net 0.0 1.8 1.8
Income Before Taxes 67.3 -42.7 24.6
Income Taxes 17.4 0.1 17.5
Income After Taxes 49.9 -42.8 7.1
Minority Interest (IS) -1.1 0.0 -1.1
Equity in Affiliates 0.7 0.0 0.7
Net Income - Excl. Xord. Items 49.4 -42.8 6.7
Discontinued Operations 2.0 0.0 2.0
Net Income - Incl. Xord. Items 51.5 -42.8 8.7
Preferred Dividends 0.0 -0.7 -0.7
Income Avail. to Common 51.5 -43.4 8.0
Share Items
Basic Avg. Shares Outstanding 30.4 42.1 72.5
Basic EPS - Excl. Xord. Items 1.63 n/a 0.09
Basic EPS - Incl. Xord. Items 1.69 n/a 0.12
Full Dilution Adjustment 0.0 0.0 0.0
Fully Diluted Shares Outstanding 31.2 42.1 73.3
F.D. EPS - Excl. Xord. Items 1.58 n/a 0.09
F.D. EPS - Incl. Xord. Items 1.65 n/a 0.12
Balance Sheet
Assets
Cash and Equivalents 46.3 5.2 51.4
ST Investments 0.0 20.6 20.6
Accounts Receivable 205.3 1.1 206.4
Inventory 0.0 4.4 4.4
Prepayments and Advances 0.0 3.3 3.3
Other Current Assets 16.8 0.0 16.8
Current Assets 268.4 34.5 302.9
Accum D&A 0.0 0.0 0.0
PPE, Net 43.7 2.3 45.9
Goodwill & Intangibles 451.3 0.0 451.3
Other Assets 0.0 0.0 0.0
Other LT Assets 19.4 0.2 19.6
Total Assets 782.7 37.0 819.7
Liabilities
Accounts Payable 0.0 4.6 4.6
Payable/Accrued 82.3 0.0 82.3
Accrued Expenses 0.0 5.6 5.6
ST Debt 25.0 0.0 25.0
Curr Port of LTD & Cap Lease Oblg 13.3 0.0 13.3
Other (Current) Liabilities 54.9 8.5 63.4
Current Liab. 175.5 18.7 194.2
LT Debt 162.5 0.0 162.5
Capitalized Lease Obligations 19.8 0.0 19.8
Total LT Debt 182.3 0.0 182.3
Minority Interest (BS) 0.1 0.0 0.1
Deferred Taxes 6.4 0.0 6.4
Other LT Liab. 15.0 55.8 70.8
Total Liabilities 379.3 74.5 453.8
Shareholders Equity
Preferred Stock 0.0 12.0 12.0
Common Stock 0.0 145.5 145.5
Additional Paid in Capital 318.9 0.0 318.9
Retained Earnings 84.8 -195.0 -110.2
Other Equity -0.3 -0.0 -0.3
Total Equity 403.4 -37.5 365.9
Total Liab. & Equity 782.7 37.0 819.7
Shares Outstanding 31.0 42.1 73.1
Cash Flow
Operating Cash Flow
CF Net Income 51.5 -42.8 8.7
CF Depreciation 15.3 1.2 16.5
CF Amortization 6.3 0.0 6.3
CF Deferred Taxes 11.9 0.0 11.9
Other Non-Cash Items 16.2 2.5 18.7
Change in Working Capital -40.4 9.2 -31.2
Total Cash From Operating Activities 60.8 -29.8 31.0
Investing Cash Flow (not calculated)
Capital Expenditures -6.3 -0.6 -6.9
Other Investing Cash Flows -64.8 26.0 -38.9
Total Cash From Investing Activities -71.1 25.4 -45.7
Financing Cash Flow (not calculated)
Dividends Paid 0.0 0.0 0.0
Purchase Or Sale of Stock 5.8 1.4 7.2
Purchase and Retirement of Debt 1.7 0.0 1.7
Other Financing Cash Flow 5.4 0.0 5.4
Total Cash From Financing Activities 12.8 1.4 14.3
Exchange Rate Effects -0.1 0.0 -0.1
Net Change in Cash 2.4 -3.0 -0.6
Cash Taxes Paid 10.9 0.1 11.0
Cash Interest Paid 12.8 0.0 12.8