Daily News: November 14, 2012

MidCap to Provide Financing for Pernix Acquisition


Pernix Therapeutics Holdings, Inc. announced that it has entered into a definitive agreement to acquire Cypress Pharmaceuticals, Inc., a privately owned generic pharmaceutical company, and Hawthorn Pharmaceuticals, Inc., a privately owned branded pharmaceutical company.

Under the terms of the agreement, Pernix will pay approximately $101 million, which includes an up-front payment of $68.5 million in cash and $12.5 million in equity, $10 million payable in December 2013, and an additional $10 million in milestone payments. The company has received a commitment of a $60 million credit facility. MidCap Financial will serve as sole bookrunner, administrative agent and joint lead arranger.

Cypress and Hawthorn, founded in 1993, are headquartered in Madison, MS and have 170 employees, including 115 sales reps. In 2012, revenues for Cypress and Hawthorn are expected to be approximately $50 million, consisting of approximately 54% generic products and 46% branded products.

Cooper Collins, president and CEO of Pernix, said, “This will be the most significant acquisition in the company’s history. The generic and branded businesses of Cypress and Hawthorn are an excellent fit for Pernix, which is expected to increase the company’s revenues for the full year 2013 to approximately $135-$145 million. The Cypress and Hawthorn pipeline, which includes products filed with the FDA or in development, will move us forward on our strategic plan to drive the company’s future success.”

Pernix Therapeutics is a specialty pharmaceutical company primarily focused on the sales, marketing, manufacturing and development of branded, generic and OTC pharmaceutical products.

MidCap Financial, LLC is a commercial finance company focused on middle-market lending in the broad national healthcare industry.