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Executive Summary

ZENITH HAS FIRST GENERIC APPROVAL OF TRILAFON (PERPHENAZINE), Schering-Plough's anti-anxiety agent. Zenith's ANDA for perphenazine in 2, 4, 6, 8 and 16 mg tablets was approved on Sept. 10. Orders are currently being taken for the product and shipments will begin on Sept. 14, the generic manufacturer said. In a press release announcing the product approval, Zenith estimated domestic sales of Trilafon at "over $20 mil." in 1986. The price to wholesalers for the generic perphenazine will be about 45% less than the brand name product, according to the company. Zenith already markets perphenazine in combination with amitriptyline, the generic version of Merck's tranquilizer agent Triavil. In a separate development, Zenith announced the sale of its Northvale, New Jersey pharmaceutical operation, one of five facilities owned by the company, to Greenville, North Carolina-based generic manufacturer MaxPharma for over $18 mil. "As part of the agreement, Zenith would be required to purchase at least $15 mil. per year from MaxPharma of products produced at the Northvale facility for a period of two years," Zenith said in a Sept. 11 release. "In addition, Zenith would act as the sole and exclusive distributor for MaxPharma for a period of five years with respect to products currently under development and to be developed by MaxPharma over the next three years." Despite its success in gaining first-time ANDA approvals, Zenith recently has been struggling. Through the first six months of 1987, the company experienced a 28% decline in sales to $23 mil., and booked a net loss of over $3 mil. "Proceeds from the transaction will be used to reduce debt and provide funds for working capital requirements," Zenith President James Leonard remarked. The transaction is subject to the approval by the boards of both firms, a definitive agreement to be signed on or before Sept. 24 with a closing date on or before Dec. 21, and the availability of financing on terms satisfactory to MaxPharma. Of the total $18 mil. purchase price, $12 mil. plus the book value of inventory is due at closing, with $6 mil. payable in installments over three years, the release notes. Leonard added that products currently manufactured in Northvale and not covered under the supply agreement will be produced at Zenith's Puerto Rico plant.

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