Knobias Clip Report (06-13-2008)
Submitted By Knobias ClipReport
SYVC: Forms Strategic JV with Maneesh Pharmaceuticals
Friday the 13th wasn’t as scary as many in the market had expected. Inflation data was announced that was a big more tame than what some had estimated. The data sent the dollar up in the morning session causing oil to fall and the market to gain overall. The Consumer Price Index, expected to have increased 0.5%, rose 0.6% in May.
But like the past 2 out of the 3 days, a reversal came and took the sails out of the market. With the way oil has reacted to price slips, the commodity is certainly something to follow before making investment decisions.
In the small cap space, one name announced some pretty significant news. Synovics Pharmaceuticals, Inc., (SYVC) is a specialty pharmaceutical company engaged in the development, manufacturing and commercialization of prescription and over-the-counter (OTC) drugs.
The Company has two operating subsidiaries, Kirk Pharmaceuticals, LLC and ANDAPharm, LLC, which manufacture and sell OTC and prescription private label drugs respectively, and Synovics Labs, Inc. a drug development subsidiary that is pursuing generic drug opportunities.
On Friday, the Company announced that on June 6, 2008, it formalized a strategic partnership with Maneesh Pharmaceuticals, LTD through the formation of a joint venture. The JV between the companies is intended to be used as a vehicle for Synovics to have access to assets of Maneesh including personnel, drug development, operating and management systems and manufacturing.
The terms of the JV provide that the Company will pay Maneesh a modest monthly fee beginning in six months and reimbursement for certain costs. There is no anticipated sharing or other distribution of Synovics’ profits with Maneesh in the JV, although the parties may agree to certain fees for products or technology licensed in the future. The Company announced on May 15, 2008 that Maneesh had completed a second financing of $5 million bringing Maneesh’s investment in the Company to a total of $12 million. In addition to the new capital, Maneesh assumed a guarantee that the Company has with the Bank of India in the amount of $6.55 million, allowing the Company to fully release the previous guarantors of Nirmal Mulye and Nostrum Pharmaceuticals, Inc. Maneesh has three representatives on Synovics’ board of five directors.
Following the news, shares were up over 9% on limited volume. With a the plan to hopefully achieve lower costs and drive growth through facility utilization, low-cost manufacturing, product development and regulatory filings for generic drug approvals by the US Food and Drug Administration, the Company could be one to watch over the coming weeks.
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