ANI Pharmaceuticals, Inc.’s (ANIP - Free Report) shares were up 4.4% on the company’s decision to acquire two New Drug Applications (NDAs) from Merck & Co. Inc. (MRK - Free Report) . The NDAs for purified corticotropin gel and corticotropin zinc hydroxide will be acquired for $75 million and a percentage of future net sales.
The transaction is slated to close in Jan 2016.
The company also said that it will establish one or more foreign subsidiaries, which will manufacture products and provide other ancillary services as well. The company expects that the acquisition will enable it to achieve a lower over-all tax rate for its operations.
ANI Pharmaceuticals will schedule a meeting with the FDA to re-activate the NDAs as a prior approval supplement. The label is expected to be similar to that of Mallinckrodt Public Limited Company’s (MNK - Free Report) Acthar gel excluding infantile spasms. Indications include the treatment of exacerbations of multiple sclerosis, rheumatic disorders, dermatologic diseases, and a variety of collagen, ophthalmic, respiratory diseases as well as allergic and edematous states.
According to information provided by the company, approximately 4,000,000 patients in the U.S. can be potentially treated with both products. The current annual U.S market for the products is estimated to be approximately $1 billion, as evidenced by Acthar gel sales.
Mallinckrodt generated Acthar gel sales of $763.1 million in first three quarters of fiscal 2015.
ANI Pharmaceuticals carries a Zacks Rank #5 (Strong Sell). Medivation, Inc. is a better-ranked stock in the health care sector carrying a Zacks Rank #1 (Strong Buy).
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