Numark top OTCs include Equalactin, Certain Dri, Benzedrex with Menley & James assets.

NUMARK TOP OTCs INCLUDE EQUALACTIN, CERTAIN DRI, BENZEDREX with the acquisition of essentially all the assets and liabilities of Horsham, Penn.- based Menley & James for approximately $12.9 mil. in cash ("The Tan Sheet" Aug. 24, In Brief). Edison, N.J.-based Numark Labs said of its current brands, the top sellers are Equalactin chewable diarrheal tablets and Certain Dri deodorant/antiperspirants. Menley & James has been focusing its marketing efforts primarily on the Benzedrex decongestant inhaler, as well as Humibid Guaifenesin Plus cough/cold product and Derifil, an internal deodorant.

Privately held Numark was founded by Patrick Lonergan, a former senior exec at Johnson & Johnson, and four of his J&J compatriots in 1987 as a marketer of underpromoted, traditional OTCs. Prior to the agreement with Menley & James, Numark marketed 12 brands acquired from J&J, Pfizer, Bristol-Myers Squibb and others. Sales for the company are at least above the $2 mil. mark, which it reached in 1995.

The marriage of the two companies' brands provides a view into the pharmacies of the first half of the century, when major brands included Lydia Pinkham uterine sedative tonic, Bromo-Seltzer antacid and Serutan natural fiber laxative.

In addition to Equalactin and Certain Dri, Numark products include the classic Bromo-Seltzer and Lydia Pinkham products, as well as Alophen laxative pills. Additionally, Numark markets the cough/cold products Histalet and P-V Tussin Syrup, and Lipotriad and Lipoflavonoid lipotropics with vitamins.

Menley & James, founded in 1919, became part of SmithKline Beecham in 1980, which three years later transformed into SmithKline Beecham. Menley & James was reformed as an independent entity by former SmithKline Beecham execs in 1990, following its purchase of 32 SmithKline OTC and toiletry brands. With this new acquisition, the company focused on six primary brands: Serutan, A.R.M. allergy relief caplets, Hold medicated relief lozenges, Ornex cold medication caplets, Rose Milk moisturizer and 5 Day antiperspirant/deodorant. Menley & James went public in December 1991.

The assets and liabilities acquisition by Numark will allow Menley & James to be debt-free, give the firm an estimated net operating loss carry-forward of $7.3 mil. and an estimated available capital loss of approximately $24.5 mil. and approximately $12.9 mil. in cash and cash equivalents, the company said.

Menley & James does not expect to liquidate or make a distribution to stockholders but instead has sought the assistance of Warburg, Pincus investors to find merger candidates that will take the company in "a new direction and generate greater opportunities than those available through its previous business focus," the company said. The price of the deal with Numark is subject to a post-closing increase or decrease of up to $500,000 depending on the level of net tangible assets as of the closing date.

Numark said it will continue the manufacturing contracts Menley & James currently has, while maintaining its own manufacturing contracts. Menley & James' management will stay in place and its headquarters will remain in Horsham. As with its own products, Numark plans focused radio, television, print and professional advertising for certain Menley products. Numark's agency of record for Bromo-Seltzer, Certain Dri, Equalactin, Lipotriad, Lipoflavonoid and Lydia Pinkham is Bruce Novograd, New York City.

Menley & James sales for the second quarter increased 11.3% to $3.6 mil., and the company took and a net loss of $181,000. Through the half, sales were $6.9 mil., down 52.1% from $14.4 mil. in the same period of 1997. The six-month results "reflect the continued erosion of a certain group of the company's brands due to trade destocking and competitive pressure," Menley said Aug. 13.

Sales from this group of brands "have declined from $3.5 mil. in the first six months of 1995 to $2.3 mil. in the first six months of 1998," while the company's consolidated sales have remained "relatively flat" for the same periods, the company said. "Increased sales the company markets under agreements with three pharmaceutical firms and sales from the company's other brands have largely offset this sales decline since 1995," Menley & James added.