Noven Pharmaceuticals to be purchased by Japanese firm: Noven Pharmaceuticals of South Miami-Dade is being sold to a Japanese company for $428 million in an all-stock transaction that is not expected to result in any job losses.

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Jul 15, 2009 (The Miami Herald - McClatchy-Tribune Information Services via COMTEX) -- NOVN | Quote | Chart | News | PowerRating -- In the latest case of a South Florida drug maker being taken over by an outside firm, Noven Pharmaceuticals, the region's largest publicly traded drug company, announced Tuesday it is being purchased by Hisamitsu Pharmaceutical of Japan for $428 million.

The companies said Noven will operate as a stand-alone unit, maintaining its 15-acre campus near the Miami Metrozoo and its current workforce of 610, including 400 in South Florida.

"There is not a single position that will be lost as a result of this transaction," said Jeffrey F. Eisenberg, Noven's executive vice president who will become chief executive of the new Noven subsidiary. "This is not the type of transaction based on finding cost savings and synergies."

Instead, Hisamitsu is planning to use Noven as "a launch pad" to enter the American market, said Peter Brandt, Noven's chief executive, who will leave the company after the transition.

The all-cash tender valued Noven at $16.50 a share, a 22 percent premium over the stock's close on Monday afternoon.

Nancy J. Hull, an analyst with Ladenburg Thalmann, had set a target price of $16 a share, indicating that the deal was reasonably priced.

Brandt said the South Miami-Dade's company has had a relationship with Hisamitsu, based in the city of Saga, "for the better part of eight years," exploring various possibilities for global partnering.

Founded in 1847, Hisamitsu has annual sales of about $1.3 billion a year. About three-fourths of that comes from prescription drugs, Brandt said. The Japanese firm purchased one million shares of Noven on the open market in 2002 and an additional 240,000 shares since then. Hisamitsu presently owns 4.9 percent of Noven's outstanding shares.

Noven's primary focus has been on prescription drugs delivered through patches. Its best known product, the Vivelle-Dot patch, used to deliver estrogen to relieve symptoms of menopause, saw sales climb when studies showed that patches carried fewer risks of side effects than pills in treating female hormonal issues.

In July 2007, the company sought to expand its market by spending $125 million to purchase JDS Pharmaceuticals, which had several tablet-based drugs in its research pipeline.

The pipeline did not quickly produce results and investors soured on the stock. Chief Executive Robert C. Strauss retired in January 2008 after the board decided not to negotiate a new contract with him. Brandt, a longtime Pfizer executive, was brought on board in April 2008.

The price of Noven stock almost doubled during Brandt's tenure. Hull, the analyst, said Brandt improved margins by focusing on "weeding out some products that weren't really profitable."

For 2008, Noven showed net income of $21.4 million on revenue of $108.2 million.

Brandt said that the company's pipeline had a couple of dozen prospects but he concentrated on a handful of products that had a chance for success. On Tuesday, Noven announced positive results from a Phase 2 clinical trial with Mesafem, intended to treat hot flashes, and was planning a Phase 3 study.

South Florida has been home to several drugmakers that started small and grew into major enterprises before being acquired by other firms. IVAX, Andrx and Kos Pharmaceuticals have all gone that route in recent years.

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