Eagle Pharmaceuticals is emerging from the pandemic in solid shape. The Woodcliff Lake-based company boasts a robust pipeline and just added two commercialized products through its acquisition of Acacia Pharma. In short, Eagle is ready to soar.
So what’s next? NJBIZ recently spoke with Scott Tarriff, the company’s founder, president and CEO, about how Eagle has conducted business over the past several years and how its leadership plans to continue that success.
“Fortunately for us, if you just look at the way we run our business over the last five or six years, we’ve been highly profitable relative to our size. We’ve generated a lot of cash, we’ve put it in the bank. We bought back our stock. And so we don’t have debt to worry about,” Tarriff said. “We don’t have anything holding us down that we really had to be concerned about. Maybe we made a little bit less money. And maybe our stock is down a little bit more than we would like it to be. But at the end of the day, we’re right in the middle of launching two significant products. We’re generating a lot of revenue and profit from those. We’re in a position where cash is probably very important. We don’t need to raise money. We’re building cash every day. And so we’re in a great situation.”
What follows is an abridged version of that conversation. The questions and answers have been edited for length and clarity. A video of the full interview is available at njbiz.com/njbizconversations.
NJBIZ: There’s a lot of I wanted to get to, I wanted to start with some recent news, though — the company’s acquisition of Acacia Pharma. I know you added two commercialized hospital products in that deal. Was that something that was just sort of opportunistic because the target was struggling a bit and it just popped up or is this part of a strategy?
Scott Tarriff: It’s a little bit of both. It’s an exciting time as we try the best we can to be students of our own industry, and right now we look historically — companies like ours, other companies in the space are trading at historic lows. We’ve been prudent over the years — we’ve been generating a significant amount of cash relative to our size, we bought back a lot of our stock. We don’t have any debt and we have infrastructure that will allow us to bring several more products into the company without needing a lot of additional infrastructure. And so after years of being focused on organic internal development we decided to start to acquire. And the acquisition of Acacia is I hope the first of a few acquisitions and we use this cash that we’ve [accumulated] over the years to build out the value of our company.
Q: OK, companies do deals for a lot of reasons — to add scale, add new technologies, geographic or market reach. Are you just looking for specific products? How would you evaluate potential targets?
A: How we’ve developed over the years is we portray ourselves as both a hospital company and an oncology company. We’ve developed products and we commercialize products in both categories. So we built a nice extension here in our hospital portfolio and offerings with the [deal] — two products, Barhemsys and Bayfavo. We’re filing another emergency room product — that’s Landiolol — that we’ll file next year. I think, going forward we’re concentrating on oncology. Right now we’re trying to stay away from clinical risk. We’re trying to stay away from regulatory risk and we are looking for products that are already marketed that could fit into our sales team, where our focus is right now. I think we’re going to be successful.
Q: And you did say it was a combination of both, so organic growth is still a part of what you’re hoping to accomplish here.
A: Yes. And the last few months we were in the middle of two launches keeping us very busy — Vasopressin and Pemfexy. Vasopressin is a hospital product and Pemfexy is an oncology product. We’re filing Landiolol next month. We were able to achieve an approval in Japan recently for one of our products, and so the organic growth is working pretty well. Now it’s time to take the risk out of it. We have quite a bit of faith in our commercial team bringing products into the market and that are already in the market.
Q: You mentioned a couple of products by name, and I wanted to ask you about what’s in the pipeline. What can you tell us about, first of all, the two that you mentioned, and anything else interesting that’s coming along?
A: The first product, we call it CalO2, is a novel product for severe pneumonia and we’re very excited about it, because it really could be a breakthrough therapy for severe pneumonia patients if all of it works out the way we hope.
And I think we struck a really strong deal for our shareholders. We paid about $10 million up front for the asset and we’ll start the study later this year for pneumonia season. And then hopefully we’ll have interim results sometime at the end of the summer next year. We need about $25 million to get us to those interim results in addition to the $10 million that we outlayed, so far. So for $35 million of our shareholders’ cash, we’re going to find out when we see those interim results if we really have a blockbuster product on our hands or not. And, look, it would be a tremendous value to these patients if it works.
Then the second product that we have in development right now — in fact we’re going back into the clinic next week, which we’re really very excited about — is a new version of Faslodex, the generic name being Fulvestrant. It’s been a long road, quite frankly, for us. We’ve been in the clinic two or three other times, hopefully we’ve solved some of the issues that we’ve seen — formulation issues. Hopefully we’re around them, and we should have news about the success there or not in September.
There’s a lot of good news flow and hopefulness coming up 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 for companies like yours to do business. The medicine chest of the world, that whole thing. … How do you find it? Are there challenges that you have to overcome to remain here? What is it like for a company like yours to do business in this state?
A: New Jersey, what can I say? It’s important to me. I raised my kids in North Jersey. I’ve lived in New Jersey for a number of years, almost my whole life. And it is a great state, but it’s not without challenges — a very high tax state.
The great part about New Jersey is we always, especially in the pharmaceutical industry, we had great ability of finding employees. And look what the pandemic has brought us. It’s brought us — we can argue if it’s good or bad, it’s probably mixed — that people can work from home. People have migrated away from the state and we can find workers outside of New Jersey. New Jersey has its challenges in being able to keep talented people within the state, being able to keep the taxes down, to make it someplace that’s reasonable for people who want to work.
There’s obviously a migration to states like Texas now, and Florida. I have a lot of faith in our government in New Jersey. I know a lot of people running our country and they’re great wonderful intelligent people but it’s something we need to tackle. We really need to be focused on how we maintain the greatness of the state over the next decade or two. It’s going to be hard. I have faith that we will be able to achieve it, but it’s not going to come easily.