Pharma BD Deal Intelligence
A $102M bolt-on acquisition that got swallowed by Pernix's own 2019 bankruptcy—the acquired generics were later deemed "less profitable" and discontinued, and the whole company sold for roughly $75.6M. Inherited False Claims Act exposure from before the deal compounded the failure.
This will be the most significant acquisition in the Company's history. The generic and branded businesses of Cypress and Hawthorn are an excellent fit for…
Factual completion coverage: Pernix completed the acquisition of Cypress Pharmaceutical and Hawthorn Pharmaceuticals under the terms announced November…
Zacks framed the closed deal as a transformative two-for-one transaction adding generics scale plus a branded portfolio to Pernix's pediatric-cough base.
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Pernix acquired Cypress Pharmaceuticals (private generics) and Hawthorn Pharmaceuticals for up to $102M ($52M cash + $34M equity upfront, plus contingent payments). Strategic doubling-down in specialty pharmaceuticals.
Assessment window: 5yr post-close.
Cypress and Hawthorn (Madison, MS) marketed multi-therapeutic generic and branded specialty products spanning allergy, respiratory, cough/cold, iron deficiency, nephrology, pain, urinary tract, women's health, prenatal vitamins, and dental health. The portfolio targets primary-care prescribers and retail pharmacy through a 115-rep specialty sales footprint.
The 2012 US generic and specialty pharmaceutical channel was dominated by scaled players (Teva, Mylan, Sandoz, Watson/Actavis) and a long tail of mid-cap roll-ups including Akorn, Lannett, and Hi-Tech Pharmacal. On the branded specialty side, Pernix competed with companies like Hi-Tech, Prasco, and small allergy/respiratory specialists. Cypress and Hawthorn brought ~10 ANDAs approved over the prior three years plus 15 ANDAs and a 505(b)(2) NDA on file at FDA, giving Pernix immediate scale: 2013 revenue guidance jumped to $135-145M from a pre-deal base of ~$50M. The deal materially differentiated Pernix from pure pediatric-cough specialty peers by adding a generics engine and a branded portfolio with built-in clinical/regulatory infrastructure. The patent-cliff backdrop (Lipitor, Plavix, Singulair losing exclusivity in 2011-2012) made ANDA-rich generic platforms unusually valuable, supporting the $102M price tag (~2x trailing revenue).
| Deal | Year | Value | Outcome |
|---|---|---|---|
| Pernix Therapeutics Holdings, Inc. / Cypress Pharmaceuticals, Inc. and Hawthorn Pharmaceuticals, Inc. (this deal) | 2012 | $102M | 21 |
| Watson Pharmaceuticals (Actavis Inc.) / Actavis plc | 2012 | $5.9B | 97 |
| Kohlberg Kravis Roberts & Co. / PRA International (Genstar Capital) | 2013 | $1.3B | 91 |
| Stryker Corporation / MAKO Surgical Corp. | 2013 | $1.6B | 91 |
| Quintiles Transnational Holdings Inc. / IMS Health Holdings, Inc. | 2016 | $17.6B | 91 |
| DPx Holdings B.V. (JLL Partners 51% / Royal DSM 49%) / Patheon Inc. + DSM Pharmaceutical Products | 2013 | $2.6B | 90 |
| Pamplona Capital Management, LLP / PAREXEL International Corporation | 2017 | $5.0B | 90 |
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