Summary

Other Scenarios:

Buyer: Lexicon Pharmaceuticals, Inc. (LXRX) Last Price: 3.91 Market Cap.: 534.85M
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: 11)
  • Genomics-Based Drug Discovery Program
  • Lexicon Pharmaceuticals, Inc.
  • LexVision Database
  • OmniBank
Target (Total: 12)
  • SyncroDose
  • Geminex
  • TIMERx
  • Gastroretentive Drug Delivery System
Buyer
  • ANGPTL4 Antibodies
  • LX-1031
  • LX-1032
  • LX 2931
Target
  • Nifedipine XL
  • PW2132 (Torsemide ER)
  • PW4110
  • PW4153

Business Relationship Summary:

Top Key Suppliers

Top Key Customers
Buyer (Total: 2)
  • BSQUARE Corporation (BSQR)
  • Urigen Pharmaceuticals, Inc. (URGP)
Target (Total: 2)
  • Mylan Inc. (MYL)
  • DRAXIS Health Inc. (USA) (DRAX)
Buyer (Total: 5)
  • Bristol Myers Squibb Co. (BMY)
  • Akzo Nobel N.V. (ADR) (AKZOY)
  • Takeda Pharmaceutical Company Limited (TKPHF)
  • Genentech, Inc. (DNA)
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 585 75
Revenue Per Employee 85,984.7 35,697.8
Total Revenue 12.6 0.7
Total Expenses 30.6 9.9
Other Revenue 0.0 0.0
Cost of Revenue 0.0 0.1
SG&A Expense 5.0 3.7
Research & Development 25.6 6.0
Other Operating Expense 0.0 0.0
Operating Income -18.0 -9.1
Unusual Income 0.0 0.0
LT Debt to Capital 27.91 25.18
Fwd P/E -5.67 -5.18
Fwd P/Rev 8.61 64.18
Book Value 79.9 32.1
Curr Portion of LTD/Cap Lease 0.8 1.2

Individual Company Summary

Focused

Buyer

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

Target

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

Business Description

Buyer

Lexicon Pharmaceuticals, Inc., formerly Lexicon Genetics Incorporated, is a biopharmaceutical company focused on the discovery and development of treatments for human disease. The Company is discovering the physiological and behavioral functions of genes to identify those that encode potential targets for therapeutic intervention, or drug targets. It engages in programs for the discovery and development of potential small molecule, antibody and protein drugs. The Company focuses on six therapeutic areas: diabetes and obesity, cardiovascular disease, psychiatric and neurological disorders, cancer, immune system disorders, and ophthalmic disease. The Company is working both independently and through collaborations and alliances to commercialize its technology and turn its discoveries into drugs. It has established multiple collaborations with pharmaceutical and biotechnology companies, as well as research institutes and academic institutions.

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 % 100 85.73
Operating Margin % -104.05 -1,171.13
Quick Ratio 2.45 6.99
Current Ratio 2.54 7.23
Coverage Ratio -0.01 -0.05
Total Assets 201.0 51.4
Return on Equity % -79.3 -104.45
Return on Assets % -31.54 -65.22
Cash+ ST Inv. Per Share 1.2 1.62
Total Debt 31.8 12.0
Total Debt to Equity % 39.76 37.41
Total Debt to Tangible Equity % 58.71 41.44
Debt to Asset % 15.82 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.
  
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.
  
Outsourced Services
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)
  
Research/Preclinical Stage Products
Therapeutics that are being investigated for the treatment of heart and circulatory system disorders in very early stages of research where no human subject is involved.

Buyer Products:

  • ANGPTL4 Antibodies
  
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:

  • LX-1031
  
Research/Preclinical Stage Products
Therapeutics that are being investigated for the treatment of digestive disorders in very early stages of research where no human subject is involved.

Buyer Products:

  • LX-1032
  
Immunology  
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:

  • LX 2931
  
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.

Buyer Products:

  • LX-6171

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)
  
Outsourced Services
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:

  • Genomics-Based Drug Discovery Program
  • Lexicon Pharmaceuticals, Inc.
  
Target Discovery/Validation  
Databases  
Genomics  
Human
Genomic databases that contain human genetic information.

Buyer Products:

  • LexVision Database
  • OmniBank
  • Genome5000 Database
  
Services
Drug discovery services that discover and validate drug targets for the development of novel biopharmaceutical drugs.

Buyer Products:

  • Functional Genomics Program
  

- 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
  Millennium Pharmaceuticals, Inc. n/a 3,539.930 n/a n/a 7.56 7.43 5.72
Human Genome Sciences n/a 1,322.877 n/a -5.87 37.84 33.38 10.54
Exelixis, Inc. n/a 1,159.117 n/a -11.31 10.47 8.71 n/a
Caliper Life Sciences Inc. n/a 285.778 n/a -20.93 2.29 2.08 16.25
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
  BSQUARE Corporation n/a 58.648 35.53 n/a 1.05 n/a 4.15
Urigen Pharmaceuticals, Inc. n/a 9.561 n/a n/a 16.73 n/a 367.71
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
  Bristol Myers Squibb Co. 35.00% 58,882.351 36.80 20.63 3.31 2.97 13.94
Akzo Nobel N.V. (ADR) 21.00% 23,815.440 15.89 15.92 1.41 1.60 4.93
Takeda Pharmaceutical Company Limited 12.00% n/a n/a n/a n/a n/a n/a
Genentech, Inc. n/a 81,346.724 31.11 27.75 7.43 6.82 8.93
Government - United States n/a n/a n/a n/a n/a n/a 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
  Genentech, Inc. n/a 81,346.724 31.11 27.75 7.43 6.82 8.93
Bristol Myers Squibb Co. n/a 58,882.351 36.80 20.63 3.31 2.97 13.94
Akzo Nobel N.V. (ADR) n/a 23,815.440 15.89 15.92 1.41 1.60 4.93
Inverness Medical Innovations, Inc. n/a 3,172.206 n/a 47.17 5.15 3.98 n/a
Medarex, Inc. n/a 1,776.572 n/a -100.64 37.72 38.72 3.25
XOMA Limited n/a 562.591 n/a -16.31 13.15 8.75 n/a
Invus Group, LLC n/a n/a n/a n/a n/a n/a n/a
Taconic Farms, Inc. n/a n/a n/a n/a n/a n/a n/a
Takeda Pharmaceutical Company Limited n/a n/a n/a n/a n/a n/a n/a
Government - United States n/a n/a n/a n/a n/a n/a n/a
Texas A&M University 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 61.8 3.0 64.8
Other Revenue 0.0 0.0 0.0
Total Revenue 61.8 3.0 64.8
Cost of Revenue 0.0 0.4 0.4
SG&A Expense 20.7 14.2 34.8
Depreciation & Amortization 0.0 0.0 0.0
Research & Development 105.5 23.7 129.2
Interest Expense 0.0 0.0 0.0
Other Operating Expense 0.0 0.0 0.0
Total Expenses 126.1 38.3 164.4
Operating Income -64.3 -35.3 -99.6
Non Operating Items
Interest Expense (Inc.), Net Non-Oprtng 0.4 1.8 2.2
Other, Net 0.4 0.0 0.4
Income Before Taxes -63.5 -33.5 -97.0
Income Taxes -0.1 0.0 -0.1
Income After Taxes -63.4 -33.5 -96.9
Minority Interest (IS) 4.3 0.0 4.3
Net Income - Excl. Xord. Items -59.1 -33.5 -92.6
Net Income - Incl. Xord. Items -59.1 -33.5 -92.6
Income Avail. to Common -59.1 -33.5 -92.6
Share Items
Basic Avg. Shares Outstanding 79.6 23.2 102.8
Basic EPS - Excl. Xord. Items n/a n/a -0.90
Basic EPS - Incl. Xord. Items n/a n/a -0.90
Full Dilution Adjustment 0.0 0.0 0.0
Fully Diluted Shares Outstanding 79.6 23.2 102.8
F.D. EPS - Excl. Xord. Items n/a n/a -0.90
F.D. EPS - Incl. Xord. Items n/a n/a -0.90
Balance Sheet
Assets
Cash and Equivalents 22.6 21.0 43.6
ST Investments 72.6 16.6 89.2
Accounts Receivable 1.4 0.6 2.0
Inventory 0.0 0.4 0.4
Prepayments and Advances 3.7 0.9 4.6
Other Current Assets 0.0 0.0 0.0
Current Assets 100.3 39.5 139.8
PPE 135.2 0.0 135.2
Accum D&A -61.0 0.0 -61.0
PPE, Net 74.2 3.6 77.8
Goodwill & Intangibles 25.8 3.1 28.9
Other Assets 0.0 0.0 0.0
Other LT Assets 0.7 5.1 5.8
Total Assets 201.0 51.4 252.3
Liabilities
Accounts Payable 4.7 1.3 6.0
Payable/Accrued 0.0 0.0 0.0
Accrued Expenses 7.6 2.6 10.2
ST Debt 0.0 0.0 0.0
Curr Port of LTD & Cap Lease Oblg 0.8 1.2 2.0
Other (Current) Liabilities 26.4 0.3 26.7
Current Liab. 39.5 5.5 45.0
LT Debt 30.9 10.8 41.7
Total LT Debt 30.9 10.8 41.7
Minority Interest (BS) 29.9 0.0 29.9
Other LT Liab. 20.7 3.0 23.7
Total Liabilities 121.0 19.3 140.3
Shareholders Equity
Common Stock 0.1 0.0 0.1
Additional Paid in Capital 464.1 220.3 684.4
Retained Earnings -384.2 -188.3 -572.6
Other Equity -0.0 0.1 0.1
Total Equity 79.9 32.1 112.0
Total Liab. & Equity 201.0 51.4 252.3
Shares Outstanding 86.0 23.4 109.4
Cash Flow
Operating Cash Flow
CF Net Income -59.1 -33.5 -92.6
CF Depreciation 10.1 0.0 10.1
CF Amortization 0.0 0.0 0.0
CF Deferred Taxes 0.0 0.0 0.0
Other Non-Cash Items 2.4 0.0 2.4
Change in Working Capital -19.8 4.5 -15.4
Total Cash From Operating Activities -66.4 -29.0 -95.4
Investing Cash Flow (not calculated)
Capital Expenditures -2.2 -2.4 -4.6
Other Investing Cash Flows -21.8 3.4 -18.4
Total Cash From Investing Activities -24.0 1.1 -23.0
Financing Cash Flow (not calculated)
Dividends Paid 0.0 0.0 0.0
Purchase Or Sale of Stock 42.2 3.5 45.7
Purchase and Retirement of Debt 13.5 12.0 25.5
Other Financing Cash Flow 42.8 -0.1 42.7
Total Cash From Financing Activities 98.4 15.4 113.8
Exchange Rate Effects 0.0 0.0 0.0
Net Change in Cash 8.0 -12.6 -4.5
Cash Interest Paid 2.7 0.0 2.7