September 21, 2015
By Mark Terry, BioSpace.com Breaking News Staff
Baudette, Minn.-based ANI Pharmaceuticals, Inc. (ANI) announced today that it is buying the New Drug Applications (NDA) for two compounds from Merck & Co. For $75 million in cash and a percentage of future net sales, ANI is acquiring the NDAs for purified corticotropin gel and corticotropin-zinc hydroxide.
ANI has indicated it plans to create one or more foreign subsidiaries to handle the acquisitions, manufacture the drugs and provide other services. This will be done to cut its overall tax rate.
“This acquisition is intended to enable us to compete in a one billion dollar branded market alongside H.P. Acthar Gel,” said Arthur Przybyl, president and chief executive officer of ANI in a statement. “We are confident in our ability to re-commercialize these products.”
The two drugs have been approved for several diseases, including multiple sclerosis, rheumatic disorders, dermatological diseases, and various collagen, ophthalmic, respiratory diseases, and allergic and edematous states. The company projects the U.S. market for the two drugs to be approximately $1 billion.
Investors seem happy about the acquisition. For the last year ANI stock has been moderately volatile with no particular trend, although a fair number of spikes and drops, especially a drop from $71.03 on July 31 to $48.01 on August 24. A year ago on Dec. 3, 2014, shares traded for $60.21, rose to $70.75 on March 2, 2015, dropped again to $62.16 on March 12, and rose back to $71.78 on April 23. Then on June 1, shares dropped to $49.68. Shares are currently trading for $56.50.
As reported by News Watch International, ANI shares dropped 13.92 percent in the last three-month period. It’s year-to-date stock performance is at -5.89 percent, although in the last year, it’s rallied 89.13 percent.
According to OTC Outlook, two analysts have given the company a short-term price target of $66. Two analysts have given the company a 2, with Zacks ranking it at 5. OTC interprets that as “suggesting the traders with a rating of strong sell for the short term.”
The deal with Merck is expected to close in January 2016. The drugs are being compared to H.P. Acthar Gel, which is currently being marketed by Mallinckrodt.
This marks another drug-buying deal. In July, ANI acquired 22 generic drug products from Israel-based Teva Pharmaceutical Industries Ltd. (TEVA). Those drugs had been on the market previously. That deal was for $25 million in cash and a percentage of future product sales. According to IMS Health, four of the drugs have a combined 12-month market value of $210 million and the entire 22-drug portfolio has a total market value of about $650 million.
In December 2013, the company acquired 31 generic drugs from Teva, which included 20 solid-oral immediate release therapeutics, four extended release products and seven liquid drugs.
On June 2, ANI announced that the U.S. Food and Drug Administration (FDA) had approved its Abbreviated New Drug Application (ANDA) for Oxycodone Hydrochloride Oral Solution 5mg/5mL, which is expected to have 12-month sales of about $30 million.
Of the new deal with Merck, Robert Schrepfer, vice president of business development for ANI, said in a statement, “This represents a transformational opportunity for ANI that remains consistent with our strategy of acquiring and re-commercializing previously approved products. We have added a unique and substantial opportunity to our expanding product pipeline and by establishing a new foreign platform we feel that ANI has set the stage for long term growth both organically and through future acquisitions.”
