King Must Sell Drug Assets to Buy Alpharma
By Marley Seaman
King said the Federal Trade Commission has ended a required waiting period for King's buyout of Alpharma and is provisionally accepting a consent order for public comment. After three months of public wrangling, Alpharma accepted a buyout offer worth $1.6 billion, or $37 per share, from King in November.
King's tender offer for Bridgewater, N.J.-based Alpharma is expected to end at 10 a.m. Monday, and more than 92% of Alpharma shares have been tendered in favor of the deal.Kadian is an extended-release morphine-based pain drug, and in 2007, it was Alpharma's best-seller, bringing in $167.7 million in revenue. King is developing its own extended-release painkiller, called Remoxy, with Pain Therapeutics. Remoxy is a form of oxycodone, an opioid marketed as OxyContin, that is designed to be abuse-resistant. King gets about half its revenue from sales of painkillers, but its muscle relaxant Skelaxin will face generic competition in 2012, and analysts say the patents supporting the drug could be overturned as early as 2009. The company lost patent protection on its blood pressure drug Altace in 2007, and its surgical blood-clotting product Thrombin-JMI is also facing patent threats. Alpharma also makes the Flector pain patch, which it began selling in January. The patents behind Kadian are scheduled to expire in spring 2010. Cowen and Co. analyst Ian Sanderson said the FTC's ruling is "a positive outcome for King" because the company won't have to sell off a more valuable product or drug candidate.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV