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Biotech / Medical : Biotech Valuation -- Ignore unavailable to you. Want to Upgrade?

To: nigel bates who wrote (4433)	8/9/2001 9:44:10 AM
From: Biomaven	Respond to of 52153

King pays 4x sales for some mature drugs: Thursday August 9, 9:12 am Eastern Time King buys rights to four drugs, ups rev outlook (UPDATE: Adds details paragraphs 3-4, 8-12) NEW YORK, Aug 9 (Reuters) - Specialty drugmaker King Pharmaceuticals Inc. (NYSE:KG - news) said on Thursday it acquired the rights to four medicines from drug giant Bristol-Myers Squibb Co. (NYSE:BMY - news) for $285 million, and as a result revised upward its revenue guidance for the remainder of 2001 and for 2002. Bristol, Tennessee-based King reiterated its earnings guidance for the third and fourth quarters of 2001 and raised its guidance for earnings for the full year 2002. King said it agreed to purchase hypertension drug Corzide, estrogen replacement therapy Delestrogen, and Florinef for adrenocortical insufficiency in Addison's disease patients and for the treatment of salt-losing adrenogenital syndrome. It also acquired the license to and trademark for hypertension drug Corgard in the United States. The company, which markets Altace for hypertension and Levoxyl for thyroid disorders, said it used a combination of cash on hand and proceeds from its existing revolving line of credit to finance the deal with Bristol-Myers. The combined sales for the four drugs were $69.2 million in 2000, King said. Bristol-Myers generated more than $21.3 billion in revenues in 2000, according to research firm Thomson Financial/First Call. King reiterated its earnings outlook of 25 cents to 26 cents per share for the third quarter and 29 cents to 30 cents for the fourth quarter. The company raised its revenue guidance for the third quarter to between $214 million and $224 million, from $207 million to $217 million previously, and raised its guidance for the fourth quarter to between $247 million and $257 million, from $230 million to $240 million. King raised its 2002 earnings estimates to between $1.24 and $1.32 per share from a previous forecast of $1.14 to $1.20 per share. It expects revenues for the year to come in between $1.1 billion and $1.2 billion, above a previous forecast of between $1.0 billion and $1.1 billion. The consensus analyst estimates for King's earnings were 26 cents per share for the third quarter, 30 cents per share for the fourth quarter, and $1.20 per share for 2002. King also said it was raising its national sales force to 750 representatives from 520 in part because of the acquisition of the Bristol-Myers drugs. The company plans to hire an additional 100 representatives during the third quarter of 2001 and an additional 150 representatives during the fourth quarter of 2001. Shares of King closed at $39.83 on the New York Stock Exchange on Wednesday, above the 52-week low of $20.53 and below the high of $46.05. Wonder why BMY is selling these drugs? I haven't checked their patent status to see their expected life. Seems like KG raises their EPS guidance about every month... Peter