Hi Tech Pharmaceuticals – improving health
Hi Tech Pharmaceuticals wants to discover, develop and successfully promote innovative products to prevent and cure diseases, to ease suffering and to enhance the quality of life.
General info about Hi Tech Pharmaceuticals
Hi-Tech Pharmaceuticals (“Hi Tech”, the “Company”, which may be referred to as “we”, “us” or “our”), a Delaware corporation, incorporated in April 1983, is a growing specialty manufacturer and marketer of prescription, over-the-counter and nutritional products. We develop, manufacture and market products in three categories – generics, prescription brands and over the counter (OTC) brands. Furthermore, we produce a wide range of products for various states, such as asthma, bronchial disorders, dermatological disorders, allergies, pain, stomach, neurological disorders etc. Most of our products are prescription items and include oral solutions and suspensions, as well as topical creams and ointments. We also specialize in the manufacture of products in our state of the art sterile facility capable of producing liquid ophthalmic, otic and inhalation products. This category includes a small amount of contract manufacturing sales for both the prescription and OTC markets.
Our prescription brands include Naprelan®, acquired in 2005, and Tanafed® DMX, acquired in 2006. Our Health Care Products Division markets a line of OTC branded products primarily for people with diabetes, including Diabetic Tussin®, DiabetiDerm®, DiabetiSweet®, DiabetiTrim®, Multi-betic® and Zostrix® line.
Our customers include chain drug stores, drug wholesalers, managed care purchasing organizations, certain Federal government agencies, generic distributors, mass merchandisers, and mail-order pharmacies. McKesson Corporation, Walgreens, Cardinal Health, Inc., CVS, AmeriSourceBergen Corporation and Wal-Mart are some of our customers. We currently market more than 100 products to over 100 customers.
Hi Tech Pharmaceuticals top 5 selling generic products in 2006 were:
• Sulfamethoxazole & Trimethoprim (the generic equivalent of Bactrim® from Roche)
• Urea 40% Cream, Lotion and gel (the generic equivalent of Carmol 40® from Bradley and Vanamide™ from
• Promethazine products including Plain, Codeine and Dextromethorphan varieties (the generic equivalent of
Phenergan® from Wyeth);
• Tannate DEX – DMP (the generic equivalent of Tanafed DMX® which Hi-Tech Pharmaceuticals recently acquired from First
Horizon Pharmaceutical Corporation (First Horizon) );
• Urealac cream lotion and gel (the generic equivalent of Keralac from Bradley.
Generic Approvals and Product Launches
Hi Tech Pharmaceuticals have 31 prescription products approved for marketing by the Food and Drug Administration (FDA) and 2 products with tentative approvals. In addition, we have 12 products submitted to the FDA and pending approval, and approximately 20 products in various stages of development. We received Abbreviated New Drug Application (ANDA) approval for the following product in 2006:
• Acyclovir Oral Suspension, USP 200 mg/5mL, equivalent to GlaxoSmithKline’s Zovirax® Suspension indicated for the treatment of Herpes Zoster Infections, Genital Herpes and Chicken Pox. Additionally, we received tentative ANDA approval for the following product in fiscal 2006:
• Ofloxacin otic solution, equivalent to Daiichi’s Floxin® otic solution, 0.3% indicated for the treatment of bacterial infections of the ear Floxin® is covered by a US patent listed in the Orange Book and is currently subject to litigation. Hi-Tech Pharmaceuticals expects to start marketing its generic version of Floxin® upon expiration of the 180 day exclusivity period if in the Orange Book is held invalid or unenforceable, or upon expiration of the patent in 2012.
In 2006, we launched the following products:
• Urealac Cream (the generic equivalent of Keralac™ Cream from Bradley)
• Ciprofloxacin ophthalmic solution USP, 0.3% (the generic equivalent of Alcon Laboratories’ Ciloxan® Ophthalmic Solution, 0.3%)
• Acyclovir Oral Suspension, USP 200 mg/5mL (the generic equivalent of GlaxoSmithKline’s Zovirax® Suspension)
• Levocarnitine oral solution and tablets (the authorized generic of Sigma-Tau’s Carnitor® )
• Paregoric USP solution
Health Care Products Division
Our Health Care Products Division (“HCP”) is a leading marketer of branded products that include over-the-counter, nutritional lines, and prescription products, primarily for people with diabetes. The Health Care Products Division is composed of six products lines which account for all of its sales. These product lines, in order of sales, are:
• Diabetic Tussin® cough products
• Zostrix® pain relief products
• DiabetiDerm® dermatological products
• Multibetic® multi-vitamins
• DiabetiSweet® sugar substitutes
• DiabetiTrim® weight management products
The Diabetic Tussin® line accounted for greater than half of Health Care Products sales. In July 2005, the Company acquired the US rights to the brands Zostrix® and Zostrix® HP, topical analgesic creams from Rodlen Laboratories, Inc. HCP launched the following products this year:
• DiabetiDerm® Heal and Toe Cream
• DiabetiDerm® Professional Strength Foot Rejuvinating Cream (sold through podiatrists)
Branded Prescription Products
Hi Tech Pharmaceuticals sells two branded prescription products, Naprelan® and Tanafed® DMX. We acquired Naprelan®, which is currently sold in both 375mg and 500 mg strengths, from Elan Pharmaceuticals in June 2004. We sell the 500mg strength ourselves and have a marketing arrangement with Blansett Pharmacal to sell the 375mg strength. Hi-Tech Pharmaceuticals acquired Tanafed® DMX from First Horizon in December 2005.
Management believes that growth in the generic pharmaceutical industry is driven by several factors which should continue in the coming years. These factors include:
• The increasing number of branded pharmaceutical products that have lost or will lose patent protection
• Efforts by federal and state governments, employers, third-party payors and consumers to control health care
• The aging of the U.S. population
• Increased acceptance of generic products by physicians, pharmacists and consumers
Management hopes to exploit these macroeconomic trends by making strategic decisions which will result in the Company’s growth. Our growth strategy is based on the following:
• Increase the number of new product introductions by expanding our research and development efforts and
increasing our ANDA submissions