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Par Pharmaceutical Companies, Inc. has a market cap of $1.84 billion; its shares were traded at around $50.01 with a P/E ratio of 15.8 and P/S ratio of 2.
Highlight of Business Operations:Strativa acquired the worldwide rights to Nascobal® Nasal Spray in 2009. Nascobal® Nasal Spray is an FDA-approved prescription vitamin B12 treatment indicated for maintenance of remission in certain pernicious anemia patients, as well as a supplement for a variety of B12 deficiencies. It is the first and currently only once-weekly, self-administered alternative to B12 injections. In June 2011, we announced our plans to resize Strativa as part of a strategic assessment. We reduced our Strativa workforce by approximately 90 people. The remaining Strativa sales force focus their marketing efforts on Megace® ES and Nascobal® Nasal Spray. In July 2011, we received a notice letter from a generic pharmaceutical manufacturer advising that it has filed an Abbreviated New Drug Application (ANDA) with the U.S. FDA containing a Paragraph IV certification referencing Megace® ES. Megace® ES is protected by Alkermes Pharma Ireland Limited (Elan) s U.S. Patents 6,592,903 and 7,101,576. We intend, with Elan, to investigate the Paragraph IV certification and ANDA, and to enforce Elan s patents, which expire in 2020 and 2024, respectively, as appropriate. Together with Megace® ES and the current level of personnel deployed in the field, we believe Strativa will generate cash inflows in excess of cash outflows into the foreseeable future.
In July 2005, we received FDA approval for our first NDA and began marketing Megace® ES (megestrol acetate) oral suspension. Megace® ES is indicated for the treatment of anorexia, cachexia or any unexplained significant weight loss in patients with a diagnosis of AIDS and utilizes the Megace® brand name that we have licensed from Bristol-Myers Squibb Company. We promoted Megace® ES as our primary brand product from 2005 through March 2009. With the acquisition of Nascobal® in March 2009, Strativa increased its sales force and turned its focus on marketing both products. In July 2011, we received a notice letter from a generic pharmaceutical manufacturer, TWi Pharmaceuticals, Inc., advising that it has filed an Abbreviated New Drug Application (ANDA) with the U.S. FDA containing a Paragraph IV certification referencing Megace® ES. Megace® ES is protected by Alkermes Pharma Ireland Limited (Elan) s U.S. Patents 6,592,903 and 7,101,576. We, along with EDT Pharma Holdings Ltd. (now known as Alkermes Pharma Ireland Limited) (Elan), filed a complaint against TWi in the U.S. District Court for the District of Maryland and another complaint in the U.S. District Court for the Northern District of Illinois, in September 2011, alleging infringement of Elan s patents, which expire in 2020 and 2024, respectively.
The decrease in the Strativa segment revenues in the second quarter of 2012 was primarily due to the decrease in Oravig® and Nascobal® revenues tempered by other product-related revenues driven by higher royalties earned of $1.7 million as compared to the prior year from Strativa s share of the proceeds from Optimer Pharmaceuticals sale of certain rights in fidaxomicin to a third party.
The decrease in the Strativa segment revenues in the year-to-date period of 2012 was primarily due to a net sales decline of Megace® ES primarily due to decreased volume coupled with a decrease in average net selling price as compared to the prior year comparable periods coupled with a decrease in Oravig® revenues. The decreases were tempered by the increased prescription volume of Nascobal® in the year-to-date period of 2012.
The increase in Par Pharmaceutical gross margin dollars for the six months ended June 30, 2012 is primarily due to the launch of modafinil in April 2012 coupled with launches of budesonide in June 2011, olanzapine in October 2011, and fentanyl citrate in October 2011, coupled with the operating results from the products acquired in the Anchen Acquisition, primarily bupropion ER and zolpidem. These increases were tempered by pre-launch inventory write-offs during the year-to-date period of 2012 coupled with lower gross margin from amlodipine and benzepril HCl revenues (approximately $23 million) and increased amortization of intangible assets associated with the Anchen Acquisition (approximately $17 million).
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