Impax Laboratories, Inc. (NASDAQ: IPXL) today announced that it has completed its acquisition of Tower Holdings, Inc. (including operating subsidiaries CorePharma LLC and Amedra Pharmaceuticals LLC), and Lineage Therapeutics Inc. (together, the "Companies"). In connection with the closing of the acquisition, Impax also announced that it is reshaping the operating and reporting structure of its two divisions – the Impax generic products division will now be known as "Impax Generics" and the Impax branded products division will now be known as "Impax Specialty Pharma". In addition, Impax has launched a new corporate logo to better reflect the growth and future of the Company.
"We are pleased to complete this acquisition, which is another important step forward in executing our plan to create value through strategic acquisitions that enhance our existing strategies," said Fred Wilkinson, president and chief executive officer of Impax. "By joining together our collective capabilities, we accelerate Impax's growth while also bolstering our operating foundation with a robust product pipeline and an expanded, more diversified manufacturing footprint."
"The acquisition significantly expands our commercialized generic portfolio to 47 products and the number of potential generic product launches in 2015 of up to 18 products, nine of which are already approved. Our branded commercialized portfolio also expands with the addition of four Amedra products. These branded products should benefit from promotional efforts utilizing our established sales and marketing organization."
The privately-held Companies acquired by Impax specialize in the development, manufacture and commercialization of complex generic and branded pharmaceutical products. This profitable and growing portfolio consists of four branded products, including the branded Albenza® franchise, Adrenaclick® and the related authorized generic, ten complementary commercialized generic products as well as other near-term generic opportunities.
"Since announcing the acquisition last October, we have worked closely alongside very committed and passionate individuals at the acquired Companies," Wilkinson continued. "With the acquisition complete and the organization structure established, we will now begin the most substantial aspects of the integration and we look forward to realizing the many benefits we expect to create by this combination."
2015 Financial Outlook
The Company's full year 2015 estimates, which include the newly acquired Companies, are based on management's current belief about prescription trends, pricing levels, inventory levels, and the anticipated timing of future product launches and events. The Company's estimates exclude the impact from any products for which the Company has not yet received approval from the U.S. Food and Drug Administration.
- Adjusted gross margins as a percent of total revenue are expected to be in the mid 50% range, excluding preliminary projections of Hayward facility remediation costs.
- Total research and development (R&D) expenses across the generic and brand divisions of approximately $80 million to $85 million (includes patent litigation expenses). This includes an additional generic R&D facility at CorePharma, partially offset by estimated annual savings of approximately $8 million related to Impax's generic and brand R&D restructuring announced in October 2014.
- Selling, general and administrative expenses of approximately $170 million to $180 million. The increase over 2014 is primarily a result of costs related to the newly acquired Companies and incremental launch and salesforce expansion costs related to the launch of RYTARY™.
- Capital expenditures of approximately $45 million to $50 million.
- Effective tax rate of approximately 34% to 36% on a GAAP basis, which assumes that the U.S. R&D tax credit is renewed for 2015. The R&D tax credit expired on December 31, 2014. The Company anticipates that its non-GAAP effective tax rate may experience volatility as the Company's tax benefits may be high compared to the Company's operating income or loss.
New Division Structure and Corporate Logo
In connection with the closing of the acquisition, Impax has reshaped its operating and reporting structure of its two divisions –Impax Generics and Impax Specialty Pharma.
- Impax Generics will include the Company's legacy Global Pharmaceuticals business as well as the acquired CorePharma and Lineage Therapeutics businesses.
- Impax Specialty Pharma will include the legacy Impax Pharmaceuticals business as well as the acquired Amedra Pharmaceuticals business.
As previously announced, Impax Generics will be responsible for overseeing all early stage development for brand and generic products, generic regulatory affairs, as well as all phases of development for the Company's generics business, in addition to generic marketing and sales. The Impax Specialty Pharma division will oversee clinical development for brand and generics, brand regulatory affairs, drug safety/pharmacovigilance and medical affairs, brand marketing and sales, and managed markets.
Reflecting its growth and future, Impax has also adopted a new logo. The new logo speaks to the Company's fast-evolving business created through the combination of the multiple branded and generic businesses. The Company intends to initiate a re-branding campaign in several stages throughout 2015, including a change in the Company's product packaging over time.
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