IVAX BUYING GOLDLINE GENERIC DRUG DISTRIBUTOR FOR $ 33 MIL. AND NOVEN FOR $ 47 MIL.; TWO ACQUISITIONS WILL PUT IVAX IN TRANSDERMAL PATCHES, BOOST GENERICS EFFORT
Ivax Corp is spending about $ 80 mil. in two stock swap deals to take the company in two directions: $ 33 mil. to acquire generic drug distributor Goldline Laboratories; and $ 47 mil. for the transdermal drug delivery R&D firm Noven Pharmaceuticals. Ivax announced the Goldline letter-of-intent on Sept. 20, one week after a similar announcement of a letter-of-intent agreement with Noven. Ivax will acquire all outstanding shares of Goldline in exchange for 1.1 mil shares of Ivax common stock, which are currently trading at about $ 33 per share. Goldline, known as Generix Drug until 1987, is primarily a distributor of generic drugs. The company has two affiliates: Bioline (a distributor) and Superpharm (a manufacturing arm). Current annual sales are estimated at approximately $ 175 mil. The controlling family is the Orloves. Michael Orlove, a former Helene Curtis exec, purchased the firm in 1975. Goldline claims to have 14,000 accounts and has about 600 employees, mostly in sales and marketing. Ivax is looking to the purchase to bring it a substantial sales force. Goldline will distribute and market drugs manufactured subsequent to approved ANDAs held by two existing Ivax subsidiaries, Baker Cummins and the U.K. subsidiary Harris Pharmaceuticals. With the Goldline purchase, Ivax will acquire the customer base of Bioline. Ivax will also apparently acquire Goldline subsidiary Superpharm, which manufactures and markets 90 SKUs made under 30 ANDAs. As a result of the investigations underway in the generic industry, Superpharm has withdrawn all ANDAs pending FDA approval. The company is in the process of being wound down. The acquisition of Noven represents a different strategy by Ivax Chairman Phillip Frost, a return to his roots. Frost was a founder of Key Pharmaceuticals, which was based on sustained release and transdermal drug delivery systems. Key was acquired by Schering-Plough in 1986 for $ 590 mil. Noven Chairman Steven Sablotsky was associate director of product and process development at Key. Ivax said it hopes to reach a definitive agreement on both deals by Oct. 31. Under the proposed stock swap, Noven shareholders will receive $ 3.50 for each share of capital stock they hold, payable as Ivax common stock; the amount distributed will depend on Ivax' trading price at the time of the merger. There are approximately 12.6 mil. Noven shares outstanding on a not fully diluted basis. Miami, Fla.-based Noven has one ANDA pending: it filed for approval of transdermal estradiol in September 1989. The product is licensed to Rhone-Poulenc Rorer. Farther back in the pipeline, Noven has a transdermal nitroglycerin in the late stages of development and in preclinicals a transdermal albuterol patch and an anti-fungal vaginal cream (miconazole nitrate). Noven received an IND in April for a transoral mucosal anesthetic delivery system for oral lesions or dental pain management. The company said it also is developing applications for an iontophoretic transdermal drug delivery system, patented in April. Noven will retain its autonomy as an R&D subsidiary, Ivax said. Ivax will add Noven and Goldline to the long list of acquisitions it has made since going public in 1987. Originally formed from a merger of three companies, Ivax acquired Baker Cummins OTC Dermatologics from Schering-Plough (which had acquired it from Key) in 1988. Ivax subsequently formed Baker Cummins Pharmaceuticals, its only R&D division. Ivax acquired Best Generics in August 1988, Harris Pharmaceuticals in December 1990, and in March, the orphan drug products firm Medical Marketing Specialties. While Ivax has not disclosed the terms of all its aquisitions, the two recent deals seem typical of Ivax' preference for stock swaps over cash purchases. Ivax has about 40 mil. shares of stock outstanding and authorization to issue 10 mil. more. Ivax does have a considerable amount of cash on hand, however; it made a public offering of 3.5 mil. shares at $ 19.25 per share in May, raising $ 55.9 mil.
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