Friday, January 4, 2013

Pernix Therapeutics Holdings, Inc completes the acquisition of Cypress Pharmaceuticals, Inc. and Hawthorn Pharmaceuticals.

In November, Perix pharma announced that it would acquire Cypress Pharma and Hawthorn Pharma and recently in December it revised the acquisition value to $102m and terms of payment. The acquisition amount will be a a mix of upfront payment (cash), equity investment and milestone payment (Table 1) 
 Cypress Pharma is a generic pharmaceutical company, Hawthorn Pharma is a branded pharmaceutical company and are privately owned. Together these companies will add approximately $50 million in 2012.   54% of revenues are from generic products and 46% from brands. On a consolidated basis, Pernix now expects to generate approximately $135-$145 million of sales in 2013.

Product Portfolio of Cypress and Hawthorn

Cypress Pharma offers generic products targeting the fields of cough and cold, nutritional supplements, analgesics, urinary tract, women’s health, pre-natal vitamins and dental health. Meanwhile, Hawthorn Pharma offers branded pharmaceutical products for allergy, respiratory, iron deficiency, nephrology and pain management.

Transaction Valuation - Cypress and Hawthorn

The transaction values Cypress and Hawthorn at approximately 2x revenues.
                      Table 1

Perix acquires Cypress and Hawthorn 
Transaction Value 102
     Upfront Payment 52
     Equity investment 34
     Milestone 16

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