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With a $1.2 billion buy, Concordia re-affirms that old drugs are indeed gold!
Canada based, Concordia Healthcare continued their buying spree of old, established drug brands by announcing the acquisition of commercial assets of Covis Pharma S.a.r.l and Covis Injectables, S.a.r.l for US $1.2 billion in cash. The Covis deal comes right after Concordia’s $329 million purchase of Donnatal (belladonna alkaloids, phenobarbital) in May 2014. Concordia’s buy makes them add to their existing portfolio, 18 high-margin, branded and authorized generic pharmaceutical products from private-equity backed, Swiss-based, Covis. Authorized and branded generics of the following drugs are all part of the deal: Nilandron®, for the treatment of metastatic prostate cancer Dibenzyline®, for the treatment of pheochromocytoma (neuroendocrine tumor) Lanoxin®, for the treatment of mild-to-moderate heart failure and atrial fibrillation Plaquenil®, for the treatment of lupus and rheumatoid arthritis  Lanoxin, Dibenzyline and Plaquenil have been on the market in the United States for over 60 years  Covis 2014 revenues were between US$140 and $145 million with a 90% gross margin, while 38% of approximate Concordia’s US$ 120 million revenues came from Donnatal.  In their conference call, Concordia supported paying almost 8.5 times revenues with the following rationale: Lanoxin (Digoxin) – API and Finished Dosage manufacturing challenges have resulted in market supply shortages and the potential FDA implementation of NTI (Narrow Therapeutic Index) for Lanoxin can represent a future upside to this business. DiBenzyline (Phenoxybenzamine Hydrochloride) – is the preferred agent of choice with no generic competition. The opportunity exists to develop new orphan indications. Plaquenil (Hydrochloroquine) – API supplier to Ranbaxy, which held 90% market share, exited the market in 2014 due to a voluntary market withdrawal and currently competitors are not positioned well to meet the existing demand. Nilandron (Nilutamide) – absence of generic competition due to strict ANDA guidelines coupled with excellent payer coverage. Covis’ 2014 revenues contributions were:  Lanoxin 25%  Dibenzyline 17% Nilandron 16%  Plaquenil 15%  So while pharmaceutical companies are looking at next generation molecules to grow their revenue streams, a look back in time may provide some worthwhile opportunities. 

Impressions: 4865

https://www.pharmacompass.com/radio-compass-blog/with-a-1-2-billion-buy-concordia-re-affirms-that-old-drugs-are-indeed-gold

#Phispers by PHARMACOMPASS
10 Mar 2015
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