$200m (25m) sen unsec cb coming Thurs from GS/JPM. Terms: 5.5y, 1.75-2.25% up 27.5-32.5, full protections. UOP=gcp/note hedge. Auxilium is a biopharma with 2 marketed products. Co has multiple collaborative agreements, but further in-house pipeline limited. As a result, will be looking to acquire later stage products using cash on hand. CF modest but slowly improving.
PF cash = 368m
PF Debt = 200m
LTM FCF = $11m
We’ll use L+50
2yr 50/10 ile real vol = 39.2/28.1
ADV = 528k
We’ll use 30 vol. Theo = 103.25
This is yet another deal about the story, so don’t get bent out of shape over the model. We expect this to go straight up so don’t miss out
BUY
Specialty biopharma co w/2 marketed products, Testim gel for hypogonadism and Xiaflex injectable for Dupuytren’s contracture.
Testim has been on market for years and will generate 240m rev in FY 12. Xiaflex launched 3/10 in US w/FY 12 rev 54m. Numerous collaborative agreements incl co-promote with GSK for Testim in mid-12. Filed w/FDA for Xiaflex for peyronie’s, expect decision 9/13. Existing relationships w/ urologist (testim) should benefit. Rest of pipeline is additional Phase 1 and 2 for Xiaflex. Converts will be only debt. Looking for phase 2 or later acquisition to expand portfolio.
Our assigned spread L+500