PENNWALT EXPLORING SALE OF PHARMACEUTICAL DIVISION in an effort to dissuade the investment group, Centaur Partners, from attempting a takeover of the full company. Pennwalt announced June 17 that its board of directors has authorized investment banker, Goldman Sachs "to explore the possible sale" of the pharmaceutical business "with a limited number of potential purchasers." Pennwalt says it has been considering the divestiture for "the past several months." The timing of the company's announcement, however, appears linked to a takeover threat posed by Centaur Partners, holders of 6.5% of Pennwalt's outstanding stock (750,000 shares purchased for about $ 48 mil.). Pennwalt's drug division has about $ 125 mil. in annual sales and contributed operating earnings of approximately $ 20 mil. in 1987. In the first quarter of 1988, Pennwalt initiated one of its most significant recent launches, the diuretic Microx (metolazone). Approved in November 1987, Microx competes directly with committee's Dyazide and Lederle's Maxzide. In addition to Microx, Pennwalt's prescription products include the antihypertensive Hylorel, the psychotherapeutic Adapin, and the antitussive Tussionnex. The company also markets a line of OTC products, including the Allerest antihistamine line, Desenex foot powder, Cruex jock itch powder, and Americaine topical anesthetics. Based on an investigation conducted with Goldman, Sachs, Pennwalt said its board "concluded that the potential of the pharmaceutical division might be more fully and rapidly realized if combined with a larger pharmaceutical enterprise." Pennwalt said that "discussions are continuing with interested parties." Pennwalt had high hopes for its drug business earlier in this decade based on the Pennkinetics slow release liquid system. However, OTC products based on the system had minimal success in the marketplace. Centaur Partners publicly reported its Pennwalt holdings in a 13-D filing with the Securities & Exchange Commission on June 15. In that filing, Centaur Partners reported beneficially owning approximately 750,000 shares of Pennwalt valued at about $ 48 mil. On the same day that Pennwalt announced it was seeking bids for its drug division, Centaur Partners sent a letter to Pennwalt Chairman and CEO Edwin Tuttle requesting a meeting to discuss a friendly takeover. "We are prepared to negotiate immediately with you and Pennwalt's board of directors the purchase of all remaining shares on a friendly basis at a significant premium to the current market price," the letter states. The letter asks for a response by June 21. The main principals in the group are Melvyn Estrin, Charles Abod, Abbey Butler and Joel Comiteau. In response to the 13D filing and the letter to management, Pennwalt stock vaulted 12 points to close on June 17 at 81. Over the past two weeks, Pennwalt stock has climbed over 17 points. At $ 81 per share and with 11.2 mil. shares outstanding, Pennwalt is carrying a market value of $ 908 mil.
Join thousands of industry professionals who rely on Pink Sheet for daily insights
Already a subscriber?
Advanz Pharma would have had to show that the European Commission’s decision to revoke Ocaliva’s conditional marketing approval risked causing serious and irreparable harm, according to lawyers from Van Bael & Bellis.
This is your final call to participate in the survey to better understand our subscribers’ content and delivery needs. The deadline is 20 September.
We are conducting a survey to better understand our subscribers’ content and delivery needs. If there are any changes you’d like to see in coverage topics, article format, or the method in which you access the Pink Sheet – or if you love it how it is – now is the time to have your voice heard.
A new pilot aims to take Brazil closer to ‘digital transformation.’
The reductions across medical product programs in the agency’s budget request include hundreds of positions funded by user fees, which may foreshadow its upcoming user fee restructuring strategy.
A new research ethics review system for multi-site clinical trials in Canada is expected to help improve study start-up times, avoid unnecessary duplication and boost the country’s competitiveness on a global stage.
A European Medicines Agency official provided an overview and update of the support the EMA offers developers of innovative products and discussed, among other things, its Innovation Task Force, Quality Innovation Group and a scientific advice pilot for clinical trials.
