3SOF

MPAX Announces FDA Approval of Generic Corzide
Tuesday April 3, 8:00 am ET
Product to Be Launched by Global Pharmaceuticals Division

HAYWARD, Calif.--(BUSINESS WIRE)--IMPAX Laboratories, Inc. (OTC:IPXL - News; "IMPAX" or "the Company") announced today that the U.S. Food and Drug Administration (FDA) has granted final approval of the Company's Abbreviated New Drug Applications (ANDA) for Nadolol/Bendroflumethiazide 40mg/5mg and 80mg/5mg, generic of Corzide®. The Company will begin marketing the products through its Global Pharmaceuticals division in the near future.

Corzide, marketed by Monarch Pharmaceuticals, a wholly-owned subsidiary of King Pharmaceuticals, Inc., for the treatment of hypertension, had sales of approximately $5.5 million in the 12 months ended February 28, 2007, according to Wolters Kluwer Health.

"This is our first approval in 2007 and we are very pleased to add generic Corzide to the growing portfolio of products our Global Pharmaceuticals division offers to patients," said Larry Hsu, Ph.D., President and Chief Executive Officer of IMPAX Laboratories.

IMPAX Reports SEC Actions
Tuesday May 1, 8:00 am ET

HAYWARD, Calif.--(BUSINESS WIRE)--IMPAX Laboratories, Inc. (OTC: IPXL - News; "IMPAX" or "the Company") reported that on April 30, 2007, an Administrative Law Judge ("ALJ") of the Securities and Exchange Commission ("Commission") issued an initial decision that, if upheld by the Commission itself, would result in the revocation of the registration of the Company's common stock under section 12 of the Securities Exchange Act of 1934. The Company will file a timely appeal to the Commission and hopes to persuade the Commission, based upon the evidence developed in a two-day hearing in February before the ALJ, that revocation or suspension of such registration is neither necessary nor appropriate for the protection of investors. The ALJ's decision will not be effective during the pendency of the appeal.

The ALJ's initial decision is based upon the Company's failure to file periodic reports since its quarterly report for the period ended September 30, 2004. As previously announced, the reason for this reporting delinquency is that the Company has been working to determine the appropriate accounting treatment for transactions under its Strategic Alliance Agreement with an affiliate of Teva Pharmaceutical Industries, Ltd. The Company has now developed an accounting treatment that it deems appropriate and is awaiting the concurrence of the Commission's Office of the Chief Accountant ("OCA") in its proposed treatment. Although it cannot predict when the OCA will reach a conclusion, the Company currently estimates that it will be in a position to file all of its delinquent reports within two to three months following a favorable determination by the OCA.

The Company also reported that its available cash and investments at March 31, 2007 was approximately $46.6 million, compared with $29.1 million at December 31, 2006. The Company continues to actively develop, manufacture and ship pharmaceutical products and received nine FDA approvals during 2006.

still holding my IPXL shares.... 

IPXL update:
IMPAX Receives Final FDA Approval for Generic Ditropan(R) XL 5 mg and 10 mg
Wednesday, May 09, 2007 09:56ET

HAYWARD, Calif., May 09, 2007 (BUSINESS WIRE) -- IMPAX Laboratories, Inc. (OTC: IPXL) ("IMPAX" or "the Company") today announced that the U.S. Food and Drug Administration (FDA) has granted final approval of the Company's Abbreviated New Drug Application (ANDA) for generic versions of Ditropan(R) XL, (Oxybutynin Chloride) 5 mg and 10 mg Extended-release Tablets. Alza Pharmaceuticals markets Ditropan XL for the treatment of urge urinary incontinence. U.S. sales of both the branded and generic 5 mg and 10 mg dosage forms were approximately $233 million in the 12 months ended March 2007, according to Wolters Kluwer Health. The Company's version of generic Ditropan XL is one of 12 products covered under its strategic alliance entered into in June 2001 with a subsidiary of Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA). Teva plans to begin marketing the product immediately.
"This is our second FDA approval this year and we look forward to working with our partner on the launch of our generic version of 5 mg and 10 mg Ditropan XL," said Larry Hsu, Ph.D., IMPAX's president and chief executive officer. "We are pleased to add these dosage forms to our 15 mg version, which received approval and 180-day marketing exclusivity last November," Dr. Hsu added.


Updated May presentation:
http://media.corporate-ir.net/media_files/irol/67/67240/Presentations/IPXLMay07v1.pdf

August presentation :

http://library.corporate-ir.net/library/67/672/67240/items/257277/IPXLAug07FINAL.pdf

IPXL update (quotation  )
The "Presentation" is the Impax's way to communicate with investors under current unusual circumstances. For me, Presentation + EDGAR + Company's PR make a great deal of transparency -- much better than many many other companies. Notes from LB and Citi are very helpful as well.

First at all, financially Impax is in a good shape. In 1H07, six-month cash increment was $33.0M and the company paid off $2.6M debt. The six-months EPS was no less than $0.60 -- in line with LB and Citi expectation.

How about 2H07? We may see some price erosion with 300mg gWXL by counting on competitions from Watson and potentially from Abrika. Previously, the players were (Teva + Impax + Anchen) and (Biovail + GSK). Seems to me that Teva is in the driver's seat and it is a very smart driver. Based on Citi's notes, the Rx number of gWXL in 1H07 was almost the same as Branded WXL. That indicates that Teva has left plenty of rooms for others to keep a better price. Thus, I don't expect a significant shrinkage in market share for (Teva + Impax + Anchen). (Teva + Impax) launched 5&10mg gDitropan in late May. Impax will have better income from gOxy. Thus, Impax will do well in 2H07.

Therefore, $1.20 EPS for Impax's 2007 book is achieveable.

How about 2008? Citi's target ($11) is based on (17 x $0.68 2008 EPS). But that $0.68 is ridiculous -- with intentional biases (to have a $11 target). For gDitropan, no new players are expected at this time. Even counting no some price erosion in gDitropan and further price erosion in 300mg gWXL, the new income from 150mg gWXL will be spare than enough to fill the hole. Beyond 2008, Impax may have gAllergra-D, gConcerta, gEffexorER, gAdderall, gDapakote, Vadova, etc.

How about buyout by Teva. This is an issue that I am not so sure. Eventually, Teva will own Impax -- nobady has any doubts. But why would Teva buy it now? I cann't get it. However, I will be happy to vote for a buyout of $25 per share.

Surprise!! Surprise?? no gap up as the milestone of OCA conclusion was reached on 7/25 and then the positive earning was "presented" on 8/8. However, everyone should remember that no gap down as the trading suspended by SEC and then the judge ruled an initial decision of revocation. Seems that the pps was down about $1 with "no reason." Let's try again -- perhaps a reason: The market is in a volatile correction -- specifically with the "credit crunch." Some aggressive investors got hurt and need money to cover their losses from other stocks. If they bought IPXL at $5-12, they may rush to sell. In November 2006, Greenlight Capital sold 5.8M shares of IPXL due to their own financial crises. This time, big boys may try to put a lid on "ask" to force selling cheap. On Aug 8, the pps was likely to drop to $8 or $6 at one time, but the positive earning in the presentation pulled pps back. Looking at the trading details these days, the buying volume at "ask" was much greater than the selling volume at "bid." But who knows what's next with such a bad market environment.

IPXL closed at $10.8 on last Friday. Wrt $1.20 EPS, the P/E is exactly at 9.0. How low will it go? And how long will the low P/E stay? Only the market can tell. In 7/30 notes Citi's analyst said: "We note that Impax is not totally out of the woods, as an administrative law judge has recommended that Impax shares be revoked." He also said in the same note: "Additionally, we note that the judge would likely consider Impax's significant progress in its efforts to "get current" when considering the appeal." Well enough, balancedly presented two-side.

&

Some addition to your thoughts:

"The "Presentation" is the Impax's way to communicate with investors under current unusual circumstances. For me, Presentation + EDGAR + Company's PR make a great deal of transparency -- much better than many many other companies. Notes from LB and Citi are very helpful as well."

I dont excatly agree with this statement because I feel it is just their way of showing the SEC that they have been "trying" to provide the public with as much information as possible without giving anything away. It does however, provide the very less the indication that IMPAX is growing and is profitable. Their PRs are nothing more than wild guesses that never ever come true. In cases where it does some true, it is often wrong or far off from their orginial estimates. Thank god for LB and Citi notes. If it werent for them, shareholders will be truely in the dark about everything (if Impax had their way). The only reason I am interested in this stock is because of LB and Citi's notes and not because of Impax's "transparency".

In any case, the presentation on 08/08/07 does provide some clues of IMPAX's profitability and confirms LB and Citi's notes. Beginning of the year Dec 2006 our cash was about $29 million. Fast forward to June 2007, it is now $62 million. This is an increase in ~ $33 milion.

Impax in 2007 is building a manufacturing plant in Taiwan, estimated operational date of 2010. Based on the presentation, this will boost IMPAX's operational capacity by 50%. That is huge. Our earnings will only grow because of this increase in capacity. Their current manufacturing plant must be overwhelmed by the demand of their products. If not, why spend the money to build additional capacity.

I agree with you that a buyout by Teva in my opinon looks very unlikely anytime soon. Why would IMPAX expand into Taiwan and waste money like that. If their intention is for a buyout, they would not expand like that and not consolidate their book value to inflat their worth. But you never know. Teva has a very close partnership with Impax and owns alot of IMPAX's share on the cheap 6-7 years ago.

The market for last couple of weeks has been horrible. The dow reached a high of 14000 and now is at ~13100. Impax's stock has held up fairly well compare to other companies. I believe this stock is poise for some appreciation near the periodic filings.

LB's target price of $15 is based on 17x 2006 EPS estimate of $0.86. Impax's six month EPS is ~$0.60. Therefore, $1.20 EPS is quite achievable for 2007. If we take the 17x multiple (which is a discount multiple compare to other companies), we are looking at a price target of about $21.

thanks clcl 

Counting on the "8-12 weeks" with the date July 25, the expectation of filing is between September 19 and October 17.

My rough estimates for yearly EPS are
2004, about even;
2005, $0.15;
2006, $0.30;
2007, $1.20;
and it is sustainable beyond 2007.

Earning is the life-source of the stock market, nobody ingor that for any stick. Such that smart traders know the value of IPXL just what discount rate should be apply under filing-delinquent status, and some of they try to take advantages.

In last December, a high EPS was already set. With the support from a buyer (VAM), pps was around 8 x 2007EPS (as high as 10 x), even with the trading suspension and the threat of revocation. Now, the buyer got enough shares and stopped buying. A little withdraw symptom was observed last week and the pps is currently a little below 9 x.

Supply and demand is the primary principle of capitalism. IPXL float is about 58.6M common shares. The majority has being held by Wellington + SAC Capital + VAM + insiders. Quit many individuals know the value and won't sell easily, except some aggressors lost to other stocks and need cash. The convertible is a tricky part. For a declining stock, convertible may sell short. However, IPXL bottomed at aroud $5 one year ago so short selling should not be a strong factor anymore. With the bright EPS and discounted multiplier, the demand of IPXL will exponentially increase along with approaching filing and the supply will be in drought.

Big boys always play but they have to ultimately abbey the principle. Everyday trading is still full of randomness but the foundamental trend will steadily show up.

Filing Is Coming -- CitiGroup's Predictions      4-Jan-08 04:27 pm   
2008 predictions
Our forecasts for the year ahead in specialty pharma

* Bystolic disappoints - Given the long list of generic alternatives in the
beta blocker market, we predict the launch of Bystolic (nebivolol) will fall
short of expectations, and we are lowering our forecasts for both Mylan and
Forest Labs to reflect a slow sales ramp.
* Allergan exceeds expectations - Allergan is one of our preferred names for
'08, and we predict the company will exceed earnings expectations over the
next two years, as we do not expect either a weak consumer or increased
competition to meaningfully slow the momentum Allergan enjoys across its
aesthetic platform.
* Mylan earnings fall short - With gross margin pressures (as key franchises
face increased competition) and a heavy debt load, we predict Mylan's 2008
earnings will fall short of both management guidance and consensus
expectations.
* The FDA approves Puricase - As potentially the first new gout therapy in 30
years, we believe the FDA will grant Puricase priority review; and given its
efficacy and safety profile, we believe the agency will approve Puricase by
year-end.
* Valeant outlicenses retigabine - We believe retigabine ranks among the most
attractive late-stage small molecule candidates, and we expect Valeant to
sign a deal with a marketing partner in 2008.
* Other predictions - We also predict that Impax will file audited financial
statements and that Copaxone sales will exceed expectations.

Andrew Swanson, Sara C Moreno , Andrew J Finkelstein

latest presentation:
http://media.corporate-ir.net/media_files/irol/67/67240/Presentations/IPXLNov.13.07.pdf

 

IMPAX Files Form 10 Registration Statement
Friday , October 10, 2008 18:36ET

HAYWARD, Calif., Oct 10, 2008 (BUSINESS WIRE) -- IMPAX Laboratories, Inc. today announced the completion of the audits of the Company's 2004 through 2007 financial results and that it has filed a Form 10 registration statement with the Securities and Exchange Commission pursuant to section 12(g) of the Securities Exchange Act. Section 12(g) provides the registration statements thereunder shall become effective within 60 days after filing. The Company will issue a further announcement when the registration statement becomes effective and trading in the Company's stock resumes.

For the six months ended June 30, 2008, total revenues increased to $128.6 million (up 38%) and income before income taxes increased to $32.0 million (up more than 900%), compared with total revenues of $92.9 million and income before income taxes of $3.0 million for the same period last year. Net income per share on a diluted basis for the six months ended June 30, 2008 was $0.30, compared with tax-benefit aided net income per share on a diluted basis of $1.24 in the prior year period. The results for the first six months of 2007 include a reversal of a deferred tax asset valuation of $1.33 per diluted share ($81.5 million).

Larry Hsu, Ph.D., president and chief executive officer of IMPAX Laboratories, said, "We are obviously pleased that the audit work has been completed and that public trading of our shares is likely soon to resume. Despite this long ordeal, we successfully grew our business by continuing to execute our strategy of applying our formulation expertise and drug delivery technology to the development of controlled-release and specialty generics in addition to the development of brand products. At last count, we had 46 generic pharmaceutical products approved by the U.S. Food and Drug Administration ('FDA'), and a further 76 products pending FDA review or under development to target currently marketed products with more than $34 billion in U.S. brand and generic sales. We are also continuing to invest in our brand business, where we currently have one product in Phase III trials, have filed an IND on another product, and have four additional exploratory stage products."

Dr. Hsu continued, "Our improved first-half results indicate our ongoing commitment to invest in research and development programs which are driving, and should continue to drive, the growth of our business. Our ANDA filing goal in 2008 is eight to ten new applications with at least 25% of these having the potential to be first-to-file product opportunities. Year to date, we have filed five ANDAs and believe we will be able to achieve our goal in the fourth quarter."

Six Months Ended June 30, 2008 Results

Revenues

Total net revenues for the six months ended June 30, 2008 increased 38% to $128.6 million, compared to $92.9 million in the prior year period driven by increases at the Company's RX Partner, Global and OTC Partner segments.

Global product net revenues for the six months ended June 30, 2008 increased 25% to $50.1 million, compared to $40.1 million in the prior year period primarily due to the Company's generic versions of Lofibra(R) capsules, a cholesterol-lowering drug of which the Company's product was the only generic version in a market experiencing increasing demand for drugs of this type, and Colestid(R) tablets due to the increasing demand for the tablet form of this drug.

Rx Partner revenues for the six months ended June 30, 2008 increased 51% to $62.7 million, compared to $41.6 million in the prior year period primarily attributable to sales of generic OxyContin(R) and generic Wellbutrin(R) XL 300 mg of which the Company's customers' inventories were relatively full during the first quarter of 2007 as a result of the product's launch in December 2006, and generic OxyContin. Under a litigation settlement agreement, the Company's product was one of only two generic versions of OxyContin(R) in the marketplace in January 2008, when we ceased further sales of this product.

OTC Partner revenues for the six months ended June 30, 2008 increased 98% to $9.3 million, compared to $4.7 million in the prior year period primarily attributable to higher demand for seasonal allergy products

Promotional Partner revenues for the six months ended June 30, 2008 were $6.5 million with nominal change to the same period in 2007.

Margins

Gross profit for the six months ended June 30, 2008 increased 90% to $84.5 million, compared to $44.6 million in the prior year period. Gross profit margin for the six months ended June 30, 2008 increased 18 percentage points to approximately 66% of total revenues, as compared to 48% of total revenue in the prior year period. The increase in profit margin was due almost entirely to sales of generic OxyContin(R) during the first quarter of 2008.

Expenses

Total research and development expenses for the six months ended June 30, 2008 were $27.6 million, compared to $16.5 million in the prior year period. Generic project activity increased $7.1 million to $20.0 million primarily due to increased spending on bioequivalent studies related to five new and 23 pending ANDA filings, higher patent prosecution an opinion expenses and investment in additional human resources. Brand product activity relating to the Company's pipeline increased $4.0 million to $7.6 million due to expenses associated with 36 additional research personnel added during the period representing 65% of the total increase in brand R & D spending and higher spending on clinical trials.

Patent litigation expenses for the six months ended June 30, 2008 were $3.0 million, down $3.4 million over the prior year period due to lower costs resulting from a lower number of open patent litigations as a result of two settlements during the first half of 2008.

Selling, general and administrative expenses for the six months ended June 30, 2008 were $22.0 million, up $3.3 million over the prior year period primarily attributable to additional marketing and sales promotional spending.

Other income and expense

Interest income and other expenses was $1.5 million higher for the six months ended June 30, 2008, primarily due to higher cash balances as a result of the increase in net sales.

Tax Rate

The provision for income taxes for the six months ended June 30, 2008 was a charge of $14.2 million, compared to a benefit of $76.0 million in 2007 related to the release of a valuation allowance of a deferred tax asset. The effective tax rate for the first six months of 2008 was 43%.

Balance Sheet Information

The Company had cash, cash equivalents and short-term marketable securities of $154.8 and total debt of $83.7 million as of June 30, 2008.

In August and September 2008, the Company repurchased in the aggregate $62.3 million principal amount of their 3.5% debentures.

Non-GAAP Results for the Six Months Ended June 30, 2008

A substantial portion of the Company's revenue is derived from alliance agreements with marketing partners and, in accordance with generally accepted accounting principles (GAAP), is deferred and recognized over the estimated remaining life of the related agreement. The Company believes it is useful to present supplemental information showing what results of operations would have been had such revenue not been deferred and instead recognized at the time marketing partners reported the revenue to the Company. The Company utilizes this information in the management of its business, including in defining performance goals for executives, and believe it may be useful to investors, drug wholesalers and others in understanding changes in the Company's cash position and in evaluating customer acceptance of the Company's products in comparison with its competitors that do not defer significant portions of their revenue. However, this non-GAAP financial information should not be considered by investors as an alternative to operating income or net income as an indicator of the Company's performance. We derive the non-GAAP results by adding the deferred revenues to our revenues determined in accordance with GAAP and deducting the amortized portion of previously deferred revenues. The following tables presents the Company's results as reported in accordance with GAAP and in accordance with this non-GAAP method.

   
Full Year 2007 Results

For the year ended December 31, 2007, the Company earned tax-benefit aided earnings per diluted share of $2.06, compared to a net less of $0.20 per diluted share in the prior year period. The results for 2007 include a tax credit of $0.80 per diluted share ($48.8 million) related to the release of a valuation allowance of a deferred tax asset. Excluding the tax-credit, adjusted diluted earnings per share were $1.26 for the year ended December 31, 2007, compared to a loss per share of $0.20 in the prior year period.

Revenues

Total net revenues for 2007 increased 102% to $273.8 million, compared to $135.2 million in the prior year period driven by an increase in the Company's Rx Partner, Global and Promotional Partner segments.

Global product net revenues for 2007 increased 13% to $88.0 million, compared to $78.2 million in the prior year period primarily due to the launch of the Company's generic version of Colestid(R) tablets and increased sales of its generic version of Lofibra(R) capsules, as it was the only generic version in the market. These increases were partially offset by lower sales of the generic versions of Brethine(R) and Minocin(R) due to increasing price competition.

Rx Partner revenues for 2007 increased to more than 300% to $161.1 million, compared to $36.8 million in the prior year period primarily attributable to sales of the Company's generic version of OxyContin(R). Under a litigation settlement agreement, the Company's product was one of only two generic versions of OxyContin(R) in the marketplace during the second and fourth quarters of 2007. Higher sales of new generic versions of Ditropan(R) XL 5 mg, 10 mg and 15 mg tablets and Wellbutrin(R) XL 300 mg were partially offset by a decline in sales of generic Wellbutrin(R) SR 100 mg & 150 mg tablets, and generic Prilosec(R) 10 mg and 20 mg capsules due to a declining market which contributed to both lower volume and pricing as competitors sought to maintain or grow market share.

OTC Partner revenues for 2007 declined 14% to $11.9 million, compared to $13.8 million in the prior year period due to lower demand.

Promotional Partner revenues for 2007 nearly doubled to $12.8 million, compared to $6.4 million in 2006 due to the fact that the Company did not begin providing promotional services until mid-2006.

Margins

Gross profit for 2007 increased 164% to $166.1 million, compared to $63.0 million in 2006. Gross margin for 2007 increased 14 percentage points to approximately 61% of total revenues, compared to 47% of total revenue in 2006. Of the total 2007 increase of 14 percentage points, nine percentage points resulted from the relatively high margins associated with sales of generic OxyContin(R) and the balance resulted from operational efficiencies.

Expenses

Total research and development expenses for 2007 were $40.0 million, compared to $29.6 million for 2006. Generic project activity increased $6.8 million to $31.2 million, primarily due to increased spending on bioequivalent studies related to submission of 13 new ANDA filings in 2007 as compared to seven filings in 2006. Brand product activity relating to the Company's pipeline increased $3.5 million to $8.8 million due to higher spending on clinical trials.

Patent litigation expenses for 2007 were $10.0 million, up $0.3 million due to higher expenses related to our generic Effexor XR(R) litigation.

Selling, general and administrative expenses for 2007 were $39.6 million, up $7.2 million primarily attributable to $1.7 million in professional fees related to legal, accounting, and audit services and $3.9 million in incentive compensation.

There were no material litigation settlement expenses in 2007, as compared with $2.6 million for interest expense and legal fees related to a litigation settlement in 2006 of a suit brought against the Company in 2003 by Solvay Pharmaceuticals, Inc.

Other income and expense

Interest income and other expenses was $2.2 million higher in 2007, primarily due to higher cash balances as a result of the increase in net sales

Tax Rate

Income tax benefit for 2007 was $48.8 million with an effective tax rate of 35% before the change in valuation allowance. There was a nominal income tax expense in 2006 as we reported a loss from operations.

Balance Sheet Information

The Company had cash, cash equivalents and short-term marketable securities of $143.5 and total debt of $89.7 million as of December 31, 2007.

           

IMPAX Resolves Remaining SEC Comments on Form 10 Registration Statement
Tuesday , January 27, 2009 09:26ET

HAYWARD, Calif., Jan 27, 2009 (BUSINESS WIRE) -- IMPAX Laboratories, Inc. (OTC:IPXL.PK) today announced that all comments from the U.S. Securities and Exchange Commission's review of the Company's Form 10 Registration Statement have been resolved. Additionally, the Financial Industry Regulatory Authority (FINRA) has approved the application of several market makers to resume quotations of the Company's common stock (symbol IPXL.PK) on the Pink Sheets.

Larry Hsu, Ph.D., president and chief executive officer of IMPAX Laboratories, said: "We are pleased to have completed the process of re-registering our shares and that market-making activities in the stock have resumed. We expect shortly to submit an application for relisting of our shares on The NASDAQ Stock Market."

&

Impax wins final FDA approval for generic ulcer drug
Tuesday , January 27, 2009 09:57ET

Jan 27, 2009 (Datamonitor via COMTEX) -- Impax Laboratories, a technology based specialty pharmaceutical company, through its generic drug division Global Pharmaceuticals, has announced that the FDA has granted final approval of its abbreviated new drug application for a generic version of Prilosec 40mg delayed-release capsules.

AstraZeneca markets Prilosec for the treatment of duodenal/gastric ulcers and gastro-esophageal reflux disease.

The company's versions of generic Prilosec (including previously approved and marketed 10mg and 20mg capsules) are one of 12 products covered under its strategic alliance entered into in June 2001 with a subsidiary of Teva Pharmaceutical Industries. Teva began marketing the 40mg product immediately.

update (one of my long term holdings)  :

Five Small-Cap Giants for Earnings Season
By Louis Navellier  04/07/10 - 11:35 AM EDT


Stock quotes in this article: IGLD , IPXL , NVMI , IMAX , CREE 

Small Cap Stock No. 2: Impax Laboratories(IPXL)

*

Impax Laboratories is an innovative drugmaker that is constantly seeking a cheaper way to bring specialty generic pharmaceuticals to patients around the world. The company concentrates on controlled-release versions of drugs and niche pharmaceuticals that require difficult-to-obtain raw materials or specialized expertise.

In the fourth quarter, the company sales soared almost fourfold to $176.1 million compared with the same quarter a year earlier. During the same period, Impax Laboratories' earnings rose an incredible 306.7%, to $38.1 million, or 61 cents per share, compared with $9 million, or 15 cents per share. The company's operating earnings were 69 cents per share. The analyst community was expecting operating earning of 14 cents per share on sales of $91.4 million, so Impax Laboratories posted a whopping 392.9% earnings surprise and a stunning 92.7% sales surprise. Analysts have raised their earnings consensus estimates upward 254.3% just in the past month, so I am definitely expecting a great surprise from IPXL when it reports earnings.


http://www.thestreet.com/story/10719911/3/five-small-cap-giants-for-earnings-season.html
http://finviz.com/quote.ashx?t=ipxl&ty=c&ta=1&p=d

fyi

Impax Labratories (IPXL) is a generic drug maker. The company focuses on controlled-release generic substitutes for brand-name drugs that have gone off-patent, or have insufficient patent protections. Currently, the company has 57 approved generic drugs, including substitutes for Claritin, Wellbutrin, Prilosec, and Flomax. The bulk of Impax's sales are directly to wholesalers like Cardinal Health (CAH) or McKesson (MCK). The firm also has joint ventures with several larger generics companies to sell their drugs, including a fairly large one with generic powerhouse Teva (TEVA). Impax is also developing a couple of branded drugs, although this is not really material to results yet.

Generics are a much different business than branded pharmaceuticals. In branded drugs, companies like Pfizer (PFE) spend billions on large R&D pipelines to develop proprietary drugs. The success rate is low, but the winners are incredibly lucrative with a decade of patent protection and huge profit margins.

Success in generics is much different. There are two keys here. One is consistently getting short (8 week) exclusivity periods on generic compounds by being the first to file applications (ANDAs) with the FDA. Impax's recent success and, in fact, its appearance in MFI is solely due to the company winning this period for generic Flomax in Q1. Having this uncontested period allowed Impax to book $176 million of incremental revenue over Q1 of 2009. That gain alone triples the total of $59 million booked last Q1! This higher revenue of course led to much higher profits - operating income was up 4,726%! As a result, the Magic Formula earnings yield is measured against a one-time revenue event and is unsustainably high at 29%.

While generic Flomax will continue to produce very good results for the first month of Q2, exclusivity ended at the end of April. For the remainder of the year, it will be a modest contributor to revenue. If we look out to 2011 expectations, earnings yield is around 10.8%. That is still pretty cheap but not exceptional.

The other key to success in generics is scale. Price is *the* competitive advantage, and being the low cost producer is paramount. Unfortunately for Impax, it pales in size to the big generics makers like Teva and Sandoz, the generics division of Novartis (NVS). Due to this fact, Impax's success will be lumpy and largely dependent on how well it invests its windfalls like Flomax.

MagicDiligence believes that generic drugs is a good industry to be in right now, and Impax has a lot of interesting qualities. For one, the company is very sound financially. The balance sheet has over $130 million in cash and no debt. Second, management has a pretty strong record of getting ANDAs passed and winning exclusivity. In addition to Flomax, Impax has been early to market with versions of OxyContin and Wellbutrin. Finally, there is a landslide of big-name drugs coming off patent in the 2011-2015 period, presenting a massive opportunity for generics makers. Impax has 32 generic drug applications pending with the FDA, and another 50+ in development.

Also intriguing is Impax's history with Teva. The two companies have had agreements for a decade, and Teva has even invested in Impax in the past. Currently, Teva distributes several of Impax's products, including generic Prilosec and Claritin. Teva has been very aggressive about expanding its already dominant scale, swallowing large competitor Barr in 2008. Impax could be a very attractive acquisition to further this cause.

And Teva isn't the only potential acquirer. As mentioned, scale is key in generics. A lot of traditional drug makers, including Pfizer, have been looking to expand their generics business. Impax also has alliance agreements with Wyeth, now a part of... Pfizer. While the potential to be acquired should never be a prime reason to invest, it is nevertheless an interesting potential catalyst for these shares.

Overall, Impax has a good track record, excellent financial health, and operates in a growth industry with both organic expansion and the potential to be bought. MagicDiligence believes it makes a nice Magic Formula purchase at current prices - and a potential future Top Buy.

 

latest IR presentation:

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NzA1MTZ8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1

consolidation in the 18-19 $ area 

Impax (IPXL) says Parkinson's drug meets study goal
AP - Mon Mar 14, 9:09PM CDT

HAYWARD, Calif. (AP) — Impax Laboratories Inc. said Monday that its potential Parkinson's disease drug met key goals in a late-stage study.

The company said the drug candidate IPX066 met key treatment goals when compared with immediate-release carbidopa-levodopa. IPX066 is an extended-release version of carbidopa-levodopa. The study focused on patients with fluctuations in motor function.

The study involved 471 subjects. Impax plans on presenting full study results at an upcoming scientific meeting.

Shares of Impax surged $2.93, or 13.3 percent, to $25 in afterhours trading after closing unchanged at $22.07 during the regular trading session.

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Impax Laboratories Schedules Conference Call and Webcast for First Quarter 2011 Financial Results
Thursday , April 14, 2011 13:00ET

HAYWARD, Calif.--(BUSINESS WIRE)-- Impax Laboratories, Inc. (NASDAQ: IPXL) announced today that its first quarter 2011 financial results will be released before the market opens on Tuesday, May 3, 2011 and will be available on Impax's Web site at www.impaxlabs.com. The Company will host a conference call and live webcast with financial analysts at 11:00 a.m., Eastern Time.