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Alexander, MD, PhD, Department of Neurology, WMRB-6000, Emory University School of Medicine, 101 Woodruff Circle, Atlanta, GA 30322, USA e-mail: medgea emory. Loestrin drug info | Cheap loestrin 24We are initiating coverage of newly public Warner Chilcott Ltd. with a Buy rating and a 12month price target of $18. Our valuation is based on an in-line 17x multiple of estimated 09 cash EPS defined as EPS adding back amortization of intangibles and deferred loan costs, net of tax ; of $1.34, also supported by a discounted cash flow analysis applying a perpetual growth rate of 3% and a discount rate of 12%. Known historically as an aggressive acquirer of branded pharmaceuticals with a foundation in female health, Warner management delivered three-year annual revenue growth in excess of 40% before going private in January 2005 for $3.2 billion. We believe the company has re-emerged public an even stronger company. Today, Warner competes with two market leading product platforms instead of one: the legacy oral contraceptive and HRT business and a new $300 million per year Rx dermatology line. Combined, we project consolidated cash EPS to grow in excess of 30% per year through 2009. Helping to drive earnings is $350 million per year in free cash flow, which management will use to substantially pay down $1.5 billion in debt now on the balance sheet. WCRX: CLASSIC SPECIALTY PHARMA AT WORK Bermuda-based Warner's origins trace back to a small branded generic marketing company in Northern Ireland and former drug units within the old Warner Lambert Company. Founded in 1968 by John King and Dr. Alan McClay, Galen Plc. evolved into a $100 million per year health care company comprised of a pharmaceutical division selling respiratory, pain, and GI drugs in the UK, and a CRO and services business. From the outset, management sought to build value in female health so they focused R&D on hormone replacement. 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In March 2004, management sold the original non-pharmaceutical Galen units for $345 million and renamed the company Warner Chilcott to better reflect the exclusive focus on pharmaceuticals in the U.S. In May 2004, the company purchased a manufacturing facility from Pfizer in Puerto Rico for $4 million, where today a majority of the company's products are either made or packaged, including Estrostep, Ovcon, Loestrin, Femhrt and Doryx. In January 2005, the company underwent the private equity buyout led by Bain Capital, CSFB Merchant banking, JP Morgan Partners, and Thomas Lee Partners. THE NEW DERMATOLOGY BUSINESS The $7 billion per year U.S. market for prescription dermatology products including primary care ; is influenced by 8, 000 dermatologists who collectively write 44 million prescriptions per year. Note, another 93 million prescriptions are written by PCPs and other specialties. Warner's roots in the space trace back to the late 90's and a rather obscure $5 million per year oral antibiotic, originally approved in 1985. Trademarked Doryx, the product is a tetracycline antibiotic, a class routinely prescribed for acne. Doryx is a novel, enteric-coated pellet formulation of doxycycline hyclate in a capsule. Capitalizing on the selling proposition of oncedaily dosing and less GI side effects, a small Warner dermatology force steadily built the brand into a $95 million dollar product by 2005. Displaying classic life cycle management skill, which has become their hallmark, management pre-empted a generic threat in 2005 by achieving and macrobid. 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Side effects of medications can be so dangerous that a drug is pulled from pharmacy shelves. Too frequently, new side effects of approved drugs are detected after a drug is placed on the market. This leads to significant changes in prescribing information, including the most serious "black box warnings". A black box warning is contained within a thick black square at the beginning of the information about that drug published in the Physicians' Desk Reference PDR ; . It is also folded and inserted in every package of the drug. The black box warning might include potentially lethal drug interactions, toxicities, or other life-threatening side effects. A black box warning tells prescribers the most important safety information about a potentially dangerous drug. The warnings also influence some prescribers to look for safer alternatives. It is important to remember that medication side effects can occur even after years of continuous use. Each time a medication is administered, the side effects are to be reviewed. Old drugs can have previously unreported side effects. No drug is safe under all conditions for every person. Question whether the information you read about medication is current. Throw away old and outdated drug reference books. Instead, rely on the Internet e.g., fda.gov ; or a hospital or pharmacy's drug information center for up-to-date information. Rather, the federal government would have to expend significant resources to engage in an ongoing educational campaign about the dangers of the treatment so that health care practitioners and their patients will not make the same harmful mistake over and over again. The last step in ordering loestrin is completing and fax us all the order forms.
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