RxElite purchased FineTech Laboratories in a deal valued at approximately $18.3 million. The firm will pay $6.2 million in cash and 18,632,383 shares. RxElite stock opened trading at $0.65. RxElite expects this acquisition to bolster its ability to develop and manufacture complex generic drugs.
FineTech conducts R&D as well as manufactures complex APIs at its manufacturing facility in Israel. RxElite acquired the physical facilities, intellectual property, and patents of FineTech and has retained all FineTech employees. The firm will operate as a separate division, through a wholly owned subsidiary.
FineTech achieved revenues of approximately $6 million in 2007, according to Houssian. The acquisition is expected to be accretive to earnings this year.
“A key part of FineTech's business model has been to develop difficult APIs, selling and licensing them to major U.S. generic companies,” points out Jonathan Houssian, CEO and founder of RxElite. “FineTech's business model has resulted in several successful generic drug launches and significant profits for FineTech's partners over the last five years. RxElite plans to vertically integrate FineTech's business in order to capitalize on these type of profitable opportunities from FineTech's five current products, as well as their six complex APIs under development.”