Summary

Other Scenarios:

Buyer: DRAXIS Health Inc. (USA) (DRAX) Last Price: 5.38 Market Cap.: 226.27M
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
Medical Devices   255
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: 14)
  • Draxis Pharma Inc.
Target (Total: 12)
  • SyncroDose
  • Geminex
  • TIMERx
  • Gastroretentive Drug Delivery System
Buyer
  • DRAXIMAGE I-131 Sodium Iodide Capsules
  • DRAXIMAGE Iobenguane I-131 Injection/131 I-metaiodobenzylguanidine (I-131MIBG)
  • Technetium (Tc 99m) Generators
  • DRAXIMAGE Tc 99 MarcoAggregated Albumin Kit (MAA)
Target
  • Nifedipine XL
  • PW2132 (Torsemide ER)
  • PW4110
  • PW4153

Business Relationship Summary:

Top Key Suppliers

Top Key Customers
Buyer (Total: 4)
  • Genzyme Corporation (GENZ)
  • MDS Inc. (USA) (MDZ)
  • BTG plc (BTG:GB)
  • Chinoin Pharmaceutical Company
Target (Total: 2)
  • Mylan Inc. (MYL)
  • DRAXIS Health Inc. (USA) (DRAX)
Buyer (Total: 8)
  • GlaxoSmithKline plc (ADR) (GSK)
  • Genzyme Corporation (GENZ)
  • Pfizer Inc. (PFE)
  • Johnson & Johnson (JNJ)
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 404 75
Revenue Per Employee 194,904.0 35,697.8
Total Revenue 19.4 0.7
Total Expenses 16.9 9.9
Other Revenue 0.0 0.0
Cost of Revenue 11.7 0.1
SG&A Expense 3.2 3.7
Research & Development 0.7 6.0
Other Operating Expense 0.0 0.0
Operating Income 2.5 -9.1
Unusual Income 0.0 0.0
LT Debt to Capital 0 25.18
Fwd P/E 26.80 -5.18
Fwd P/Rev 2.60 64.18
Book Value 106.1 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 Manufacturing Organizations (CMO) > Pharmaceuticals > Final Dosage Forms

Target

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

Business Description

Buyer

DRAXIS Health Inc. (DRAXIS) is a specialty pharmaceutical company providing products in three categories: sterile products, non-sterile products and radiopharmaceuticals. Sterile products include liquid and freeze-dried (lyophilized) injectables and sterile ointments. Non-sterile products are produced as solid oral, liquid and semi-solid dosage forms. Radiopharmaceuticals are used for both therapeutic and diagnostic molecular imaging applications. As of January 1, 2005, all of the operations of the Company are carried out through its wholly owned subsidiary DRAXIS Specialty Pharmaceuticals Inc., which operates two divisions, DRAXIS Pharma (contract manufacturing) and DRAXIMAGE (radiopharmaceuticals). During the year ended December 31, 2006, 72.8% of its consolidated revenues were derived from DRAXIS Pharma (contract manufacturing) and 24.2% of its consolidated revenues were derived from DRAXIMAGE (radiopharmaceuticals).

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 % 44.04 85.73
Operating Margin % 14.75 -1,171.13
Quick Ratio 4.99 6.99
Current Ratio 6.67 7.23
Coverage Ratio 0.05 -0.05
Total Assets 116.8 51.4
Return on Equity % 9.31 -104.45
Return on Assets % 8.46 -65.22
Cash+ ST Inv. Per Share 0.65 1.62
Total Debt 0.0 12.0
Total Debt to Equity % 0 37.41
Total Debt to Tangible Equity % 0 41.44
Debt to Asset % 0.00 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.
  
Medical Devices  
Radiology
The Radiology Subsector includes medical devices that generate images of internal physiology.
  
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  
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.

Buyer Products:

  • DRAXIMAGE I-131 Sodium Iodide Capsules
  • DRAXIMAGE Iobenguane I-131 Injection/131 I-metaiodobenzylguanidine (I-131MIBG)

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)
  
Medical Devices  
Radiology  
Nuclear  
Gamma Camera  
Accessories  
Sources  
Standards
Guidelines for radioactive dosage calculations.

Buyer Products:

  • Technetium (Tc 99m) Generators
  
Contrast Agents  
Radionuclides  
Injectable
A liquid form of radionuclide contrast agent that is introduced into the body by way of a needle.

Buyer Products:

  • DRAXIMAGE Tc 99 MarcoAggregated Albumin Kit (MAA)
  • DRAXIMAGE Tc-99m Sestamibi
  • MDP
  • DTPA
  • DRAXIMAGE Tc 99 Diethylene-triamine Pentacetic Acid Kit
  • DRAXIMAGE Tc 99 Calcium Glucoheptonate Kit
  • DRAXIMAGE Somatoscan/Somatostatin Therapy
  • DRAXIMAGE INFECTON (Technetium-Labeled Ciprofloxacin)
  • DRAXIMAGE Tc 99 Methylene Diphosphonic Acid Kit
  
Oral
A pill form of radioactive contrast agent that is swallowed orally.

Buyer Products:

  • DRAXIMAGE I-131 Sodium Iodide Capsules
  • DRAXIMAGE Sodium Iodide I-131 Preparation Kit
  
Outsourced Services
Development/Manufacturing Services  
Contract Manufacturing Organizations (CMO)  
Pharmaceuticals  
Final Dosage Forms
Contract Manufacturing Organizations (CMO) that produce large quantities of drug products in final dosage forms ready to be sold to end users.

Buyer Products:

  • Draxis Pharma Inc.
  
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
Overlap
  Johnson & Johnson n/a 190,863.999 18.04 16.24 3.34 3.16 13.68
Buyer
  General Electric Company n/a 420,400.759 19.67 18.82 2.53 2.50 22.72
Johnson & Johnson n/a 190,863.999 18.04 16.24 3.34 3.16 13.68
Bristol Myers Squibb Co. n/a 58,882.351 36.80 20.63 3.31 2.97 13.94
Cardinal Health, Inc. n/a 23,811.086 12.33 15.90 0.27 0.25 15.71
Covidien Ltd. n/a 20,682.508 n/a 15.31 2.06 2.03 n/a
Biogen Idec Inc. n/a 19,990.682 34.32 26.43 6.89 6.17 22.87
Koninklijke DSM N.V. (ADR) n/a 10,182.340 18.38 22.40 0.82 n/a 1.60
Hospira, Inc. n/a 6,472.566 61.84 19.36 2.15 1.91 n/a
Patheon, Inc. n/a 361.609 n/a n/a 0.53 n/a 2.00
Molecular Insight Pharmaceuticals, Inc. n/a 173.620 n/a -2.80 409.69 280.03 4.11
Immunomedics, Inc. n/a 172.643 n/a -9.00 20.30 n/a 8.49
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
  Genzyme Corporation n/a 18,868.543 n/a 24.64 5.42 4.94 5.62
MDS Inc. (USA) n/a 2,652.969 3.27 52.68 2.34 2.29 6.16
BTG plc n/a n/a n/a n/a n/a n/a n/a
Chinoin Pharmaceutical Company n/a n/a n/a n/a n/a n/a n/a
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
  GlaxoSmithKline plc (ADR) 23.00% 145,898.979 13.21 13.20 3.13 3.18 11.63
Genzyme Corporation 23.00% 18,868.543 n/a 24.64 5.42 4.94 5.62
Pfizer Inc. 13.00% 174,978.777 10.02 12.06 3.61 3.71 7.23
Johnson & Johnson 10.00% 190,863.999 18.04 16.24 3.34 3.16 13.68
General Electric Company n/a 420,400.759 19.67 18.82 2.53 2.50 22.72
Penwest Pharmaceuticals n/a 200.033 n/a -5.18 66.37 64.18 6.91
DUSA Pharmaceuticals, Inc. n/a 48.543 n/a -4.48 1.75 1.82 3.19
Bracco S.p.A. 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
  General Electric Company n/a 420,400.759 19.67 18.82 2.53 2.50 22.72
Johnson & Johnson n/a 190,863.999 18.04 16.24 3.34 3.16 13.68
GlaxoSmithKline plc (ADR) n/a 145,898.979 13.21 13.20 3.13 3.18 11.63
Bristol Myers Squibb Co. n/a 58,882.351 36.80 20.63 3.31 2.97 13.94
Cardinal Health, Inc. n/a 23,811.086 12.33 15.90 0.27 0.25 15.71
Covidien Ltd. n/a 20,682.508 n/a 15.31 2.06 2.03 n/a
Genzyme Corporation n/a 18,868.543 n/a 24.64 5.42 4.94 5.62
MDS Inc. (USA) n/a 2,652.969 3.27 52.68 2.34 2.29 6.16
Penwest Pharmaceuticals n/a 200.033 n/a -5.18 66.37 64.18 6.91
DUSA Pharmaceuticals, Inc. n/a 48.543 n/a -4.48 1.75 1.82 3.19
BTG plc n/a n/a n/a n/a n/a n/a n/a
Isogenic Science, Ltd. n/a n/a n/a n/a n/a n/a n/a
Bracco S.p.A. n/a n/a n/a n/a n/a n/a n/a
Med Discovery SA n/a n/a n/a n/a n/a n/a n/a
Chinoin Pharmaceutical Company n/a n/a n/a n/a n/a n/a n/a
United Pharmacy Partners Inc. 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 86.0 3.0 89.1
Other Revenue 0.0 0.0 0.0
Total Revenue 86.0 3.0 89.1
Cost of Revenue 48.2 0.4 48.6
SG&A Expense 17.3 14.2 31.4
Depreciation & Amortization 5.4 0.0 5.4
Research & Development 2.6 23.7 26.3
Interest Expense 0.0 0.0 0.0
Other Operating Expense 0.0 0.0 0.0
Total Expenses 73.3 38.3 111.6
Operating Income 12.7 -35.3 -22.6
Non Operating Items
Interest Expense (Inc.), Net Non-Oprtng 0.7 1.8 2.4
Other, Net 0.0 0.0 0.0
Income Before Taxes 12.9 -33.5 -20.6
Income Taxes 3.0 0.0 3.0
Income After Taxes 9.9 -33.5 -23.6
Net Income - Excl. Xord. Items 9.9 -33.5 -23.6
Net Income - Incl. Xord. Items 9.9 -33.5 -23.6
Income Avail. to Common 9.9 -33.5 -23.6
Share Items
Basic Avg. Shares Outstanding 42.0 23.2 65.2
Basic EPS - Excl. Xord. Items 0.24 n/a -0.36
Basic EPS - Incl. Xord. Items 0.24 n/a -0.36
Full Dilution Adjustment 0.0 0.0 0.0
Fully Diluted Shares Outstanding 42.4 23.2 65.6
F.D. EPS - Excl. Xord. Items 0.23 n/a -0.36
F.D. EPS - Incl. Xord. Items 0.23 n/a -0.36
Balance Sheet
Assets
Cash and Equivalents 27.4 21.0 48.4
ST Investments 0.0 16.6 16.6
Accounts Receivable 15.4 0.6 16.0
Inventory 8.4 0.4 8.8
Prepayments and Advances 2.1 0.9 3.1
Other Current Assets 3.9 0.0 3.9
Current Assets 57.2 39.5 96.7
Accum D&A 0.0 0.0 0.0
PPE, Net 52.9 3.6 56.5
Goodwill & Intangibles 1.0 3.1 4.1
Other Assets 0.0 0.0 0.0
Other LT Assets 5.7 5.1 10.8
Total Assets 116.8 51.4 168.2
Liabilities
Accounts Payable 8.0 1.3 9.4
Payable/Accrued 0.0 0.0 0.0
Accrued Expenses 0.0 2.6 2.6
ST Debt 0.0 0.0 0.0
Curr Port of LTD & Cap Lease Oblg 0.0 1.2 1.2
Other (Current) Liabilities 0.5 0.3 0.8
Current Liab. 8.6 5.5 14.0
LT Debt 0.0 10.8 10.8
Total LT Debt 0.0 10.8 10.8
Other LT Liab. 2.1 3.0 5.1
Total Liabilities 10.7 19.3 30.0
Shareholders Equity
Common Stock 79.6 0.0 79.6
Additional Paid in Capital 15.9 220.3 236.2
Retained Earnings -4.6 -188.3 -193.0
Other Equity 15.3 0.1 15.4
Total Equity 106.1 32.1 138.2
Total Liab. & Equity 116.8 51.4 168.2
Shares Outstanding 42.1 23.4 65.4
Cash Flow
Operating Cash Flow
CF Net Income 9.9 -33.5 -23.6
CF Depreciation 5.4 0.0 5.4
CF Deferred Taxes 2.2 0.0 2.2
Other Non-Cash Items 0.1 0.0 0.1
Change in Working Capital 2.4 4.5 6.9
Total Cash From Operating Activities 20.0 -29.0 -9.1
Investing Cash Flow (not calculated)
Capital Expenditures -8.6 -2.4 -11.0
Other Investing Cash Flows -0.4 3.4 3.1
Total Cash From Investing Activities -8.9 1.1 -7.9
Financing Cash Flow (not calculated)
Dividends Paid 0.0 0.0 0.0
Purchase Or Sale of Stock 3.8 3.5 7.3
Purchase and Retirement of Debt 0.0 12.0 12.0
Other Financing Cash Flow -2.3 -0.1 -2.4
Total Cash From Financing Activities 1.5 15.4 16.9
Exchange Rate Effects -0.0 0.0 -0.0
Net Change in Cash 12.5 -12.6 -0.1
Cash Taxes Paid 0.2 0.0 0.2