Summary

Other Scenarios:

Buyer: PharmaNet Development Group Inc. (PDGI) Last Price: 32.25 Market Cap.: 601.85M
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

- 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)
  • SFBC International Inc.
  • PharmaNet Inc.
  • KeyStone Laboratories
  • Pharmaceutical Development Associates, Inc.
Target (Total: 8)
  • AcuForm Oral Drug Delivery Technology
Buyer
  • PharmaNet Inc.
Target
  • Furosemide GR
  • GERD Program
  • Glumetza (Metformin GR)
  • Gabapentin GR

Business Relationship Summary:

Top Key Suppliers

Top Key Customers
Buyer (Total: 1)
  • Accentia Biopharmaceuticals, Inc (ABPI)
Target (Total: 1)
  • Biovail Corporation (USA) (BVF)
Buyer (Total: 0)

n/a
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 2,089 105
Revenue Per Employee 206,773.2 153,580.8
Total Revenue 107.7 3.8
Total Expenses 99.1 15.1
Other Revenue 0.0 0.0
Cost of Revenue 73.4 0.3
SG&A Expense 25.7 6.2
Research & Development 0.0 8.6
Other Operating Expense 0.0 0.0
Operating Income 8.6 -11.3
Unusual Income 0.0 0.0
LT Debt to Capital 37.64 0
Fwd P/E 24.28 -5.64
Fwd P/Rev 1.73 8.56
Book Value 265.0 -49.5
Curr Portion of LTD/Cap Lease 2.7 0.0

Individual Company Summary

Focused

Buyer

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

Target

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

Business Description

Buyer

PharmaNet Development Group Inc. (PDGI), formerly SFBC International, Inc., is a global drug development services company providing clinical development services, including consulting, Phase I and bioequivalency clinical studies, and Phase II, III and IV clinical development programs to branded pharmaceutical, biotechnology, generic drug and medical device companies around the world. The Company conducts its operations in two segments: early stage and late stage clinical development. Early stage consists primarily of its Phase I clinical trial facilities, bioanalytical laboratories and clinical laboratories. Late stage consists of its subsidiary, PharmaNet, Inc., which primarily provides late Phase II through Phase IV services.

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 % 30.65 84.77
Operating Margin % 3.74 -369.97
Quick Ratio 1.28 1.44
Current Ratio 1.57 1.84
Coverage Ratio -0.56 0
Total Assets 576.0 37.0
Return on Equity % 3.54 n/a
Return on Assets % 1.63 -115.66
Cash+ ST Inv. Per Share 2.51 0.61
Total Debt 162.7 0.0
Total Debt to Equity % 61.4 0
Total Debt to Tangible Equity % n/a n/a
Debt to Asset % 28.25 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.
  

- 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:

  • PharmaNet Inc.
  
Outsourced Services
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:

  • SFBC International Inc.
  • PharmaNet Inc.
  • KeyStone Laboratories
  • Pharmaceutical Development Associates, Inc.
  • New Drug Services, Inc.
  • Clinical Pharmacology Associates
  • Synfine Research Inc.
  • Danapharm Clinical Research
  • Taylor Technology
  • Anapharm Inc.
  • Lee Coast Research Inc.
  • SFBC New Drug Services Canada, 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
  

- 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
  Pharmaceutical Product Development, Inc. n/a 4,617.603 29.45 25.68 3.61 3.42 5.86
Covance Inc. n/a 4,460.855 29.64 26.78 3.08 2.93 5.50
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
  Accentia Biopharmaceuticals, Inc n/a 85.338 n/a -1.26 3.95 3.91 n/a
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
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
  Accentia Biopharmaceuticals, Inc n/a 85.338 n/a -1.26 3.95 3.91 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 411.2 12.0 423.2
Other Revenue 0.0 0.0 0.0
Total Revenue 411.2 12.0 423.2
Cost of Revenue 285.2 1.8 287.0
SG&A Expense 102.8 25.0 127.7
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
Unusual Expense (Income) 7.9 0.0 7.9
Total Expenses 395.8 56.6 452.4
Operating Income 15.4 -44.5 -29.2
Non Operating Items
Interest Expense (Inc.), Net Non-Oprtng -8.6 0.0 -8.6
Other, Net 0.0 1.8 1.8
Income Before Taxes 6.8 -42.7 -35.9
Income Taxes -2.6 0.1 -2.5
Income After Taxes 9.4 -42.8 -33.4
Minority Interest (IS) -0.6 0.0 -0.6
Net Income - Excl. Xord. Items 8.7 -42.8 -34.0
Discontinued Operations -34.0 0.0 -34.0
Net Income - Incl. Xord. Items -25.3 -42.8 -68.0
Preferred Dividends 0.0 -0.7 -0.7
Income Avail. to Common -25.3 -43.4 -68.7
Share Items
Basic Avg. Shares Outstanding 18.6 42.1 60.7
Basic EPS - Excl. Xord. Items 0.47 n/a -0.56
Basic EPS - Incl. Xord. Items n/a n/a -1.12
Full Dilution Adjustment 0.0 0.0 0.0
Fully Diluted Shares Outstanding 18.9 42.1 60.9
F.D. EPS - Excl. Xord. Items 0.46 n/a -0.56
F.D. EPS - Incl. Xord. Items n/a n/a -1.12
Balance Sheet
Assets
Cash and Equivalents 36.3 5.2 41.5
ST Investments 11.0 20.6 31.7
Accounts Receivable 128.9 1.1 130.0
Inventory 0.0 4.4 4.4
Prepayments and Advances 9.6 3.3 12.9
Other Current Assets 30.8 0.0 30.8
Current Assets 216.7 34.5 251.2
Accum D&A 0.0 0.0 0.0
PPE, Net 55.2 2.3 57.5
Goodwill & Intangibles 295.5 0.0 295.5
Other Assets 0.0 0.0 0.0
Other LT Assets 8.6 0.2 8.8
Total Assets 576.0 37.0 613.0
Liabilities
Accounts Payable 8.1 4.6 12.7
Payable/Accrued 0.0 0.0 0.0
Accrued Expenses 28.7 5.6 34.4
ST Debt 0.0 0.0 0.0
Curr Port of LTD & Cap Lease Oblg 2.7 0.0 2.7
Other (Current) Liabilities 98.2 8.5 106.8
Current Liab. 137.8 18.7 156.5
LT Debt 157.5 0.0 157.5
Capitalized Lease Obligations 2.4 0.0 2.4
Total LT Debt 160.0 0.0 160.0
Minority Interest (BS) 1.7 0.0 1.7
Deferred Taxes 2.3 0.0 2.3
Other LT Liab. 9.1 55.8 64.9
Total Liabilities 311.0 74.5 385.5
Shareholders Equity
Preferred Stock 0.0 12.0 12.0
Common Stock 0.0 145.5 145.5
Additional Paid in Capital 239.3 0.0 239.3
Retained Earnings 16.3 -195.0 -178.6
Other Equity 9.4 -0.0 9.4
Total Equity 265.0 -37.5 227.6
Total Liab. & Equity 576.0 37.0 613.0
Shares Outstanding 18.7 42.1 60.8
Cash Flow
Operating Cash Flow
CF Net Income -25.3 -42.8 -68.0
CF Depreciation 14.3 1.2 15.5
CF Deferred Taxes -7.8 0.0 -7.8
Other Non-Cash Items 47.2 2.5 49.8
Change in Working Capital -21.5 9.2 -12.3
Total Cash From Operating Activities 7.0 -29.8 -22.9
Investing Cash Flow (not calculated)
Capital Expenditures -33.9 -0.6 -34.4
Other Investing Cash Flows -7.1 26.0 18.9
Total Cash From Investing Activities -40.9 25.4 -15.5
Financing Cash Flow (not calculated)
Dividends Paid 0.0 0.0 0.0
Purchase Or Sale of Stock 4.1 1.4 5.5
Purchase and Retirement of Debt -5.8 0.0 -5.8
Other Financing Cash Flow 20.8 0.0 20.8
Total Cash From Financing Activities 19.1 1.4 20.6
Exchange Rate Effects 1.3 0.0 1.3
Net Change in Cash -13.5 -3.0 -16.5
Cash Taxes Paid 3.0 0.1 3.1
Cash Interest Paid 4.8 0.0 4.8