Benzinga | Aug 10, 2021 01:02PM EDT

Recro To Acquire Undisclosed Full-Service CDMO For Around $50M, Q2 Earnings Top Estimates

* Recro Pharma Inc (NASDAQ:REPH) has signed a non-binding letter of intent to acquire a full-service contract development and manufacturing organization (CDMO) for approximately $49.85 million.

* The target's capabilities range from formulation development to commercial manufacturing for various dosage forms, including oral liquids, sterile injectables, tablets, topicals, liquid/powder-filled capsules, ophthalmic droppers, liposomes, and nano/microparticles.

* The purchase price will be paid through $25.5 million cash, 9.3 million Recro shares to be issued in six months, and seller notes of $6.1 million.

* Recro also reported Q2 sales of $18 million, +16% Y/Y, beating the consensus of $17.10 million.

* The Company reported EPS of $0.03, surpassing the consensus of EPS loss of $(0.11) versus a loss of $(0.25) a year ago.

* Adjusted EBITDA was $5.4 million compared to $4.7 million in Q2 FY20.

* Recro posted an operating income of $1.8 million versus a loss of $(1.02) million last year.

* Price Action: REPH shares are down 1.28% at $1.94 during the market session on the last check Tuesday.