|Impax CEO Fred Wilkinson|
Back in August, Impax Laboratories ($IPXL) CEO Fred Wilkinson told investors on a conference call that the company was "well-positioned to execute on a number of transactions." And now, the company has pulled the trigger on one of those deals, spending $700 million on a pair of Pennsylvania drugmakers.
The California company has agreed to pick up Lineage Therapeutics and Tower Holdings, which brings along subsidiaries CorePharma and Amedra Pharmaceuticals. Impax says the companies' drugs should generate between $215 million and $225 million in sales for this year, and they could add 90 cents per diluted share to its own 2015 earnings if the deal closes within the next 6 months.
Things haven't been so rosy at Impax lately, with problems at a California manufacturing plant costing it heavily. In January, Impax acknowledged that the FDA wouldn't consider approval of Rytary, its Parkinson's drug candidate, until it got plant problems under control. The delay in getting the drug to market earlier cost Impax a partnership with GlaxoSmithKline ($GSK), which had bought some international rights to Rytary for $186 million back in 2010. Impax embarked on a plan to cut 110 jobs shortly thereafter.
Adding Tower and Lineage should help things. They'll bring along a portfolio featuring both generics and branded pharmaceutical products--such as Tower's Adrenaclick, an epinephrine drug--as well as a New Jersey campus focused on R&D, manufacturing, packaging and supply chain management. With the FDA recently handing Impax Form 483s on both its production plants, that's something it could use right now.
In a statement, Wilkinson called the deal "an important step forward in executing our plan to drive growth and create value through strategic acquisitions that enhance our existing strategies." And Impax may not be done there; Wilkinson was careful to note that the company will still have an "ability to pursue additional external strategic growth opportunities."
- read the release
- see Reuters' take
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