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Pernix Therapeutics Holdings, Inc. recently announced that it has completed the acquisition of Cypress Pharmaceuticals, Inc. and Hawthorn Pharmaceuticals. 

Both the companies are privately owned. While Cypress Pharma is a generic pharmaceutical company, Hawthorn Pharma is a branded pharmaceutical company. 
The acquisitions were announced on November 14, 2012 but the terms of the payment were modified on December 28, 2012. 
As per the amended agreement, Pernix will pay up to $102 million which includes an up-front payment of $52.0 million in cash and $34.0 million in equity on closing while $11 million will be paid in December 2013 along with an additional milestone payment of $5 million.
Previously, Pernix was supposed to pay up to $101 million which included an up-front payment of $68.5 million in cash and $12.5 million in equity on closing coupled with $11 million payable in December 2013 and an additional $5 million in a milestone payment. 
Pernix undertook a $42 million credit facility to finance the acquisitions. Both Cypress Pharma and Hawthorn Pharma are expected to generate sales of approximately $50 million in 2012 consisting of approximately 54% generic products and 46% branded products. On a consolidated basis, Pernix now expects to generate approximately $135-$145 million of sales in 2013. 
Cypress Pharma offers generic products targeting the fields of cough and cold, nutritional supplements, analgesics, urinary tract, women’s health, pre-natal vitamins and dental health. Meanwhile, Hawthorn Pharma offers branded pharmaceutical products for allergy, respiratory, iron deficiency, nephrology and pain management.
Hence, the acquisitions will widen Pernix’s portfolio in the respective arenas. Pernix currently markets generic products through its wholly-owned subsidiary, Macoven Pharmaceuticals. 
Pernix has been active on the acquisition front with the acquisition of Great Southern Laboratories in July 2012 and the merger agreement to acquire Somaxon Pharmaceuticals, Inc. for $25 million in December 2012.
We currently have a Neutral recommendation on Pernix, which carries a Zacks #3 Rank (Hold).  Pharma stocks which currently look attractive are Allergan, Inc. (AGN - Analyst Report) with a Zacks #2 Rank (Buy).

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