Boston, MA 05/14/2014 (wallstreetpr) – Pernix Therapeutics Holdings Inc (NASDAQ:PTX) has two reasons driving its shares to a record high level of nearly 30% today. Firstly, the company has signed an agreement to acquire Treximet’s U.S. rights from GlaxoSmithKline plc. Secondly, the company has forecasted its fiscal year 2015 guidance above analysts’ estimates.
U.S. Rights For Treximet
As per the press release, GlaxoSmithKline Plc has decided to extinguish all its rights for Treximet in favor of Pernix Therapeutics Holdings Inc (NASDAQ:PTX) in consideration of $250 million. As per the terms of the divestment by Glaxo, it will assign its existing Product Development and Commercialization Agreement with POZEN to Pernix, which in turn would alter the agreement in line with the rights of the parties and further development. Under the amended agreement, Pernix will keep some of the GSK’s ongoing development activities and will further add new activities that will be supported by POZEN. Pernix has agreed to pay $3 million to CPPIB in relation to the allocation of the PDC agreement.
Along side the agreement, Pernix Therapeutics Holdings Inc (NASDAQ:PTX) has also provided POZEN a warrant to buy 500,000 shares of its common stock at an exercise price of closing market price of the stock on May 13, 2014. The warrants shall be exercisable from the divestiture closing date through February 28, 2018 and will be registered under the SEC. Also, the amended agreement provisions for a committed quarterly minimum royalty payment of $4 million commencing from January 1, 2015 through March 31, 2018. In the meanwhile, Pernix expects to complete the acquisition within August 1, 2014.
FY15 Revenue Estimate Above Consensus
The acquisition of Treximet, a migraine drug would instantly add to the revenues and earnings of the company. Furthermore, the rights are expected to double Pernix Therapeutics Holdings Inc (NASDAQ:PTX)’s revenues and give EBITDA margins in surplus of 30% on a pro forma basis for the year 2014. As as result, the company now guides pro forma revenues for financial year 2015 to exceed $230 million and EBITDA margin of more than 40%, which is above the market consensus.
