RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Seeking alphaHere's an exerpt from 5i Research:
Aralez is adding Toprol and its authorized generic. Toprol is a cardioselective beta blocker used in the treatment of hypertension (in combination with other drugs). The payment is quite large, at $175 million upfront, but ARZ indicates it will improve profitability in 2017 and is immediately EBITDA accretive. Revenue was $89 million last year and $53 million in the first half of this year.
The balance sheet will change, of course, but the deal adds more than twice the prior-expected 2016 revenues of the company. It looks like a decent deal for the company.
It is good to see a Canadian company get approval after many misses in other companies. The main risk has now been taken off the table, so now it is a question of growth and sales.
It is a good product, and solves a big problem. The company is already looking forward and bought its first other drug rights last week.
The revenue ramp up looks good, but sometimes launches take longer than investors expect. The balance sheet is OK, and we have no reason to expect any issues here. Insiders own 11% and have been net buyers this year. We think it may pause a bit while investors await sales, but the risk has been significantly reduced and the potential remains quite high, in our view.