Eagle Pharmaceuticals emerges from the pandemic in great shape. The Woodcliff Lake-based company has a strong pipeline and has just added two products to market through its acquisition of Acacia Pharma. In short, Eagle is ready to take flight.
So what’s the next step? NJBIZ recently spoke with Scott Tarriff, Founder, President and CEO of the company, about how Eagle has conducted its business over the past few years and how its executives plan to continue that success.
“Fortunately for us, if you just look at the way we’ve run our business over the past five or six years, we’ve been very profitable relative to our size. We generated a lot of money, we put it in the bank. We bought back our stock. And so we don’t have to worry about debt,” Tarriff said. “We don’t have anything holding us back that we really need to worry about. Maybe we made a little less money. And maybe our stock has gone down a bit more than we would like. But at the end of the day, we’re right in the middle of launching two important products. We generate a lot of revenue and profit from these. We are in a position where cash is probably very important. We don’t need to fundraise. We accumulate cash every day. And so we are in a great situation.
The following is an abbreviated version of that conversation. Questions and answers have been edited for length and clarity. A video of the full interview is available at njbiz.com/njbizconversations.
NJBIZ: There are a lot of things I wanted to cover, however I wanted to start with some recent news – the company’s acquisition of Acacia Pharma. I know you added two marketed hospital products in this transaction. Was it something that was just kind of opportunistic because the target was struggling a bit and had just appeared or was it part of a strategy?
Price Scott: It’s a bit of both. It’s an exciting time as we do our best to be students of our own industry, and right now we’re looking historically – companies like ours, other companies in the space are trading at historically high low. We’ve been conservative over the years – we’ve generated a significant amount of cash relative to our size, we’ve bought back a lot of our stock. We have no debt and we have an infrastructure that will allow us to introduce several other products into the business without the need for a lot of additional infrastructure. And so after years of focusing on organic internal development, we decided to start acquiring. And the acquisition of Acacia is hopefully the first of a few acquisitions and we’re using that money that we have [accumulated] over the years to build the value of our business.
Q: Okay, companies enter into agreements for many reasons — to add scale, to add new technologies, to achieve geographic or market reach. Are you simply looking for specific products? How would you rate potential targets?
A: Our development over the years is that we present ourselves as both a hospital company and an oncology company. We have developed products and we market products in both categories. So we have built a nice extension here in our hospital portfolio and our offers with the [deal] — two products, Barhemsys and Bayfavo. We are filing another emergency room product – it’s Landiolol – which we will be filing next year. I think in the future we will focus on oncology. At this time, we are trying to stay away from clinical risk. We try to steer clear of regulatory risks and are looking for products that are already on the market that could fit into our sales team, which we are currently focused on. I think we will succeed.
Q: And you said it was a combination of both, so organic growth is still part of what you hope to accomplish here.
A: Yes. And over the past few months, we were in the middle of two launches that kept us very busy – Vasopressin and Pemfexy. Vasopressin is a hospital product and Pemfexy is an oncology product. We’re filing Landiolol next month. We have recently been able to obtain an authorization in Japan for one of our products, and the organic growth is therefore working quite well. Now is the time to eliminate the risk. We have great faith in our sales team bringing products to market that are already on the market.
Q: You mentioned a few products by name, and I wanted to ask you what’s in the works. What can you tell us about, first of all, the two you mentioned, and anything else interesting to come?
A: The first product, we call it CalO2, is a new product for severe pneumonia and we are very excited about it, because it really could be a breakthrough therapy for patients with severe pneumonia if all goes as we hope.
And I think we have reached a very solid agreement for our shareholders. We paid about $10 million up front for the asset and will begin the study later this year for pneumonia season. And then hopefully we will have interim results at the end of the summer next year. We need approximately $25 million to achieve these interim results, in addition to the $10 million we have spent so far. So for $35 million of our shareholders’ money, we’re going to know when we see these interim results whether we really have a flagship product or not. And, look, it would be invaluable to these patients if it worked.
Then the second product that we have in development right now—in fact, we’re going back to the clinic next week, which we’re really excited about—is a new version of Faslodex, the generic name being Fulvestrant. It’s been a long road, frankly, for us. We’ve been to the clinic two or three more times, hopefully we’ve fixed some of the issues we saw – formulation issues. Hopefully we are around them, and we should have news of success there or not in September.
There is a lot of good news and hope in the short term.
Q: As you know, state officials here and people in your industry like to believe that New Jersey is a good place to do business with companies like yours. The pharmacy of the world, all that. … How do you find it? Are there any challenges you need to overcome to stay here? How does it feel for a company like yours to do business in this state?
A: New Jersey, what can I say? Its important to me. I raised my children in North Jersey. I lived in New Jersey for several years, almost my entire life. And it’s a big state, but it’s not without its challenges — a very high-tax state.
The great part of New Jersey is that we still have, especially in the pharmaceutical industry, a great ability to find employees. And look what the pandemic has brought us. It’s led us – we can say good or bad, it’s probably mixed – that people can work from home. People have left the state and we can find workers outside of New Jersey. New Jersey is struggling to keep talented people in the state, to lower taxes, to make it a reasonable place for people to want to work.
There is obviously a migration to states like Texas now and Florida. I have great faith in our New Jersey government. I know a lot of people running our country and they are wonderful, smart people, but it’s something we have to come to grips with. We really need to focus on how we maintain state greatness over the next decade or two. It’s going to be hard. I am confident that we can achieve this, but it will not come easily.