Pernix Therapeutics Holdings, Inc.
) jumped 68.9% on the back of an institutional investment by
Athyrium Capital Management and the appointment of a new Chief
Executive Officer (CEO).
Pernix appointed Doug Drysdale as its CEO. Pernix also
announced that a group of institutional investors led by Athyrium
Capital Management have agreed to purchase $65 million aggregate
principal amount of 8.00% convertible senior notes due 2019 from
the company. The notes are convertible into shares of common
stock of Pernix at an initial conversion price of $3.60 per
share. The appointment of Drysdale was supported by the group of
institutional investors led by Athyrium Capital Management.
Pernix expects to use the capital provided from the buyout of
notes for strategic acquisitions along with working capital and
for general corporate purposes.
Separately, Pernix also announced that it has settled all its
pending claims brought against by the former shareholders of
erstwhile Cypress Pharmaceuticals, Inc. related to the
We remind investors that Pernix has completed the acquisition
of Cypress Pharma (a privately-owned generic pharmaceutical
company) at the end of Dec 2012.
As per the settlement agreement, Pernix is required to pay
$1.3 million to the former shareholders of Cypress Pharma on or
before Feb 7, 2014. The amount was accrued as a contingent
consideration by Pernix. The settlement also modified some other
terms of the acquisition to enable better product development
Additionally, Pernix also reached an agreement with the
Attorney General of the State of Texas. The company settled all
claims arising from certain actions by Cypress prior to the
The resolution of the pending litigation matters and
appointment of a new CEO is encouraging. We expect further
details on the same when the company reports fourth quarter
Pernix currently carries a Zacks Rank #3 (Hold). Some
better-ranked stocks in its sector include
Biogen Idec Inc
). All three carry a Zacks Rank #1 (Strong Buy).
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