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Community Pharmacy Partners, focused on substitutes for opioid painkillers, runs sales process

  • CPP pharmacies offer topical pain medications
  • Dallas company has in-network reimbursement model
  • Sponsors that have backed opioid-treatment centers: Webster, Bain, Linden, Revelstoke, Housatonic

Community Pharmacy Partners, the specialty pharmacy network focused on alternatives to prescription opioids to treat pain, is weighing a sale, Buyouts has learned.

Stifel is offering sell-side advice to the privately held company, according to people familiar with the matter.

Founded in 2014 in response to the opioid epidemic, CPP focuses on site-specific topical medications to treat patients’ pain.

As opposed to oral painkillers the likes of oxycodone and codeine, the company focuses on FDA-approved products including topical analgesics and anti-inflammatories, neuropathic pain solutions, migraine medications and muscle relaxers, among other offerings.

The Dallas company operates 11 community pharmacies in Arizona, Oklahoma, Texas and Virginia, serving more than 1,500 physicians.

CPP’s reimbursement model is entirely in-network with commercial payers, one source said.

CPP is projecting adjusted Ebitda of about $25 million in 2018, up from about $20 million in 2017, the source said. The company projects full-year revenue for 2018 to approach $110 million, up from just south of $80 million in 2017, the source added.

The CPP process comes as deaths from opioid-related overdoses continue to climb.

More than 64,000 Americans died from drug overdoses in 2016, nearly double in a decade, the Centers for Disease Control and Prevention reports. The level of opioid-related deaths has soared, surpassing 33,000 in the U.S. in 2015, nearly threefold the level seen in 2002, according to the National Institute on Drug Abuse.

After declaring the opioid epidemic a public-health emergency late last year, President Donald Trump in March unveiled his administration’s plan to fight the opioid crisis. The initiative includes new enforcement policies, including the death penalty for some drug dealers, steps to reduce opioid prescriptions, as well as less clear claims to improve access to addiction treatment.

Private equity sponsors have already proven eager to invest behind healthcare platforms looking to combat the nation’s worsening opioid-abuse problem.

One is Webster Capital, which backs one of the largest operators of outpatient opioid-treatment clinics in North America through its investment in BayMark Health Services. The Lewisville, Texas, company in March bought one of its largest peers in Canada, Canadian Addiction Treatment Centers, Buyouts reported.

At BayMark, the model extends beyond methadone treatment to buprenorphine-focused treatment clinics and ambulatory detox sites.

Bain Capital in 2015 sold opioid-treatment company CRC Health for $1.3 billion to publicly traded Acadia Healthcare.

Other PE-backed opioid-treatment groups include Linden Capital Partners’ Pinnacle Treatment CentersRevelstoke Capital Partners’ Crossroads and Housatonic Partners’ Aegis Treatment Centers.

Action Item: Read more about Community Pharmacy Partners here: http://communityrxp.com/

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