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Eagle Pharmaceuticals Inc (EGRX), a pharmaceutical firm that focuses on developing and commercializing injectable products, plans to raise $50 million in its approaching IPO. on Wednesday.

The Woodcliff Lake, New Jersey-based firm will offer 3.3 million shares at an expected price range of $14-$16 per share. If the IPO can find the midpoint of that range at $15 per share, EGRX will command a market value of $216 million.

EGRX filed on December 20, 2013.
Lead Underwriters: Piper Jaffray & Co, William Blair and Co LLC
Underwriters: Cantor Fitzgerald and Co.

Summary

EGRX is a specialty pharmaceutical company engaged in the development and commercialization of injectable products that address the shortcomings of extant commercially successful products. The firm's product portfolio includes a pair of approved products and six advanced product candidates. In the case of each product, EGRX seeks to enter the market no later than the first generic drug, with the intent to convert the market to its products without compromising attractive pricing.

The firm's first product, EP-1101, is a proprietary version of the anticoagulant argatroban, and has captured a 28% share of the overall argatroban market since its 2011 FDA approval. The firm hopes to replicate EP-1101's success with its current product candidates--the two most advanced of which are proprietary presentations of bendamustine, used in the treatment of certain hematologic cancers.

Valuation

EGRX offers the following figures in its S-1 balance sheet for the three months ended December 31, 2013:

Revenue: $5,491,565.00
Net Loss: ($3,255,142.00)
Total Assets: $18,010,088.00
Total Liabilities: $17,235,359.00
Stockholders' Equity: ($92,238,274.00)

Though EGRX has yet to become profitable, it seems to be rapidly approaching profitability. The firm's net loss for the year ended September 30, 2013 was $6,048,473-a significant improvement over the net loss for the year ended September 30, 2012, which was $19,382,641.

Competitors

EGRX's products must compete with those offered by other pharmaceutical firms, many of which are more or less identical. Some of these firms have much greater financial and technical resources than EGRX. Competitors include GlaxoSmithKline (GSK), West-Ward Pharmaceuticals, and Teva Pharmaceutical Industries (TEVA).

Management

Founder Scott Tarriff has served as President and CEO since EGRX's inception in January 2007. Mr. Tariff previously served as President and CEO, among other positions, with Par Pharmaceutical Companies, Inc., and held various positions with Bristol-Meyers Squibb. He has served as a director of Synthetic Biologics, Inc. since February 2012 and previously served on the board of directors of Clinical Data, Inc. Mr. Tarriff holds a B.S. in marketing from Pennsylvania State University and an M.B.A. from Rider College.

Conclusion

We rate this IPO a buy in the proposed price range of $14 to $16. We are hearing the deal is several times oversubscribed. This puppy could fly out of the gate on Wednesday morning.

EGRX's business strategy appears solid and should give the firm every opportunity to capitalize on opportunities presented by other pharmaceutical firms' successes. The firm's initial products have already proven commercially successful, and we believe that it will be able to build on the knowledge gained from those successes to commercialize more treatments. We expect the firm to attain profitability in the near future.

Source: Eagle Pharmaceuticals IPO Could Fly Due To Commercial Success And Near-Profitability