Impax Agrees To Buy Genetic Products For $586 Million

Impax Laboratories, Inc. IPXL revealed Tuesday that it reached definitive agreements with Teva Pharmaceutical Industries Ltd. TEVA and affiliates of Allergan plc AGN for the acquisition of a wide portfolio of generic products. That included solid oral, inhalable, injectable and topical dosage forms and the return to Impax of its rights to its pending abbreviated new drug application ("ANDA") for the generic equivalent to Concerta. According to the company, the total payout involved about $586 million.

Impax said that once the transaction is completed, it would gain a portfolio of 15 currently marketed generic products; one approved generic product and two approved strengths of a currently marketed product that have not yet launched. Similarly, it would also benefit from one pipeline generic product and one pipeline strength of a currently marketed product that are pending Food and Drug Administration (FDA) approval.

The company also disclosed the gain of the full commercial rights to Impax's pending ANDA for the generic equivalent to Concerta, a product previously partnered with Teva; and one generic product under development once the transaction is completed.

Impax President and CEO, Fred Wilkinson, commented, "The anticipated acquisition of these currently marketed and pipeline products fits with our strategic priorities of maximizing our generic platform, optimizing R&D and accelerating business development to create long term growth."

He added, "Through this transaction, we will be expanding our portfolio of difficult-to-manufacture or limited-competition products and maximizing utilization of our existing manufacturing facilities in Hayward, California and Taiwan. The acquisition of full commercial rights to generic Concerta provides an additional opportunity to add another valuable near term launch and accentuates the strength of our internal R&D program."

The company indicated the transaction would be accretive immediately. It added that the acquired marketed generic products fetched about $150 million in net sales and approximately $100 million in gross profit in the last year.

The medical firm also opted to update its full year 2016 financial guidance. Accordingly, 2016 guidance assumed 12 - 14 generic product launches including six to eight new generic product approvals based on its current expectations. For the Year to date, it launched two generic products including one of two products approved by the FDA in 2016.

Impax expects about $80 million revenue to be added in the second half of the current year if everything goes according to their plan. It would also offset the weakness from the recent competition on its diclofenac sodium gel, as well as metaxalone products. The company also expects favorable impact on its EBITDA and EPS by a minimum of 20 percent from the last year due to the transaction.