March 2005                        return to newsletter contents page

IVAX Expands Animal Health Business; Announces Agreement to Purchase Phoenix Scientific, Inc.

IVAX Corporation announced that it has entered into an agreement to acquire Phoenix Scientific, Inc. Headquartered in St. Joseph, Missouri, Phoenix Scientific (Phoenix) is the industry's largest manufacturer of generic veterinary pharmaceutical formulations, with 2004 sales of over $130 million. The closing of the transaction, subject to certain customary conditions including clearance under the Hart-Scott-Rodino Antitrust Improvements Act, is expected to occur during the second quarter of 2005, after which Phoenix will be combined with DVM Pharmaceuticals, Inc. (DVM), IVAX' veterinary products business. The Purchase Agreement provides that at the closing IVAX will pay a combination of $196,850,000 in cash and $75,000,000 in IVAX common stock as consideration for 100% of Phoenix.

Jane Hsiao, Ph.D., Vice Chairman-Technical Affairs and Chief Technical Officer of IVAX, and Chairman and Chief Executive Officer of DVM Pharmaceuticals, Inc., said, "Phoenix, like DVM, is a company with a superior reputation and management; it will be an important addition to IVAX' existing veterinary operations and greatly enhance our ability to compete in the U.S. animal health market. The acquisition of Phoenix is expected to be immediately accretive and a growing contributor to IVAX' earnings."

DVM, IVAX' wholly owned animal health subsidiary, is well recognized by veterinarians as a pioneer and leader in providing topical and oral treatments for dermatological conditions in cats, dogs and horses. Best known for its brands, DermCaps(R), 3VCaps(R), Malaseb(TM), and the Synovi family of products, DVM and its professional sales team are strong in the ethical companion animal market. During the past five years, DVM has focused its research to develop products to treat respiratory disorders, benefiting from technology used in IVAX' human health products. DVM recently introduced NebulAir(TM), a portable nebulizer designed to vaporize liquid medications for inhalation by cats and dogs. A new, non-CFC, aerosol steroid medication delivered by IVAX' patented breath operated aerosol inhaler is in clinical trials to treat asthma (heaves) in horses.

Phoenix is an important provider of products for food animals, but is increasing its emphasis on the high growth rate segment of the companion animal market. Phoenix manufactures over 80 products in the form of oral liquids and solids, injectables, pour-ons and pastes, and other novel formulations. Since getting its first FDA approval for a product in 1994, Phoenix has averaged one new approval approximately every 60 days and currently has a pipeline of over 50 products to treat livestock and companion animals.

The strategic acquisition of Phoenix will allow IVAX, supported by DVM's strong sales force, to offer the largest number of quality products to distributors, prescribing veterinarians, farmers and pet owners in the United States. The combined company will offer almost all dosage forms and delivery systems used to treat food and companion animals. IVAX' strength in sourcing and purchasing active pharmaceutical ingredients for its human generic drug unit will have a synergistic impact on cost savings and accelerated animal drug development for the combined companies. Additionally, IVAX' international human products business presence will provide opportunities to globalize its animal healthcare business. The combination of DVM's and Phoenix' industry knowledge, assets and resource will help accelerate drug development and approvals by the FDA to lead the industry in both generic and innovative animal drug introductions.

IVAX Corporation, headquartered in Miami, Florida, discovers, develops, manufactures, and markets branded and brand equivalent (generic) pharmaceuticals and veterinary products in the U.S. and internationally.