HEALTH

Perrigo to buy Paddock for $540 million

BY Alaric DeArment

ALLEGAN, Mich. — Perrigo will buy Paddock Labs for more than half a billion dollars, Perrigo said Thursday.

Perrigo, an Allegan, Mich.-based company that makes generic prescription and over-the-counter drugs, including private-label products, announced that it would buy Minneapolis-based Paddock for $540 million in cash.

“This acquisition is an important step forward in executing on our strategy to expand our specialty portfolio of generic prescription drug products,” Perrigo chairman and CEO Joseph Papa said. “It adds incremental scale, as well as excellent development and manufacturing capabilities across a spectrum of niche dosage forms.”

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HEALTH

Second half of cold season holds promise

BY Michael Johnsen

SCOTTSDALE, Ariz. — Cough-cold supplier Matrixx on Thursday credited tough comparisons against the prior season’s high pre-season inventory purchases by retailers due to the publicity of the H1N1 flu outbreak for the lower level of sales for the quarter ended Dec. 31, 2010.

The company reported net sales of $20.3 million, down 29%. However, a lift in late December cough-cold illness rates holds promise for the second half of the season.

“We began to see increases in consumer purchases of our products during [late November, December] as new advertising commenced and the incidence of illness surpassed last year’s illness level,” said Bill Hemelt, Matrixx president and CEO. “Retailers continued to trim their inventory levels in comparison to last year; however, we believe retailers’ inventory of our products has reached a point where they will increase purchases to offset the increased consumer takeaway,” he said.

“For the four weeks ended Dec. 26, 2010, retail unit sales (three-outlet syndicated scanner data, not including Walmart or club stores) of Zicam Cold Remedy oral delivery products increased approximately 30%, while the total cough-cold category increased approximately 5% compared to the prior year," Hemelt added. "For the full fiscal year ending March 31, 2011, we anticipate revenue increasing 3% to 5% above the $67.3 million achieved in fiscal 2010."

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HEALTH

Matrixx provides ‘go-shop’ process update

BY Michael Johnsen

SCOTTSDALE, Ariz. — Matrixx Initiatives on Friday provided a summary of the ongoing "go-shop" process initiated by the company after Wonder Holdings proposed a merger agreement. The “go-shop” process is scheduled to run through Jan. 22.

To date, Matrixx’s financial adviser, Sawaya Segalas, has contacted 132 separate parties that were identified as potentially interested parties. Of the parties contacted, 48 were strategic parties, and 84 were financial parties. From this group, 31 parties executed confidentiality agreements, including seven strategic parties and 24 financial parties.

As of Friday, all of these parties have withdrawn from the “go-shop” process.

Wonder commenced a tender offer to purchase for cash all of the outstanding shares of Matrixx common stock at a price of $8 per share. The tender offer will expire at 5 p.m. EST on Jan. 31.

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