Forest Laboratories, Inc. (NYSE:FRX) and Furiex Pharmaceuticals, Inc.
(NASDAQ: FURX) today announced that Forest has entered into a definitive
agreement to acquire Furiex, a drug development collaboration company,
for $95 per share, or approximately $1.1 billion in cash, and up to $30
per share (approximately $360 million in aggregate) in a Contingent
Value Right (CVR) that may be payable based on the status of
eluxadoline, Furiex’s lead product, as a controlled drug following
approval. The acquisition is subject to receipt of customary regulatory
approvals and approval by Furiex shareholders.
Forest concurrently announced that it has entered into an agreement with
Royalty Pharma to sell Furiex’s royalties on alogliptin and Priligy® to
Royalty Pharma for approximately $415 million upon successful completion
of Forest’s acquisition of Furiex. Forest’s acquisition of Furiex is not
contingent on Forest’s agreement with Royalty Pharma.
“The acquisition of Furiex builds on our growing position in
gastroenterology and helps to create a leading GI company within Forest.
It is a natural extension of our GI business following our $2.9 billion
acquisition of Aptalis earlier this year,” said Brent Saunders, Chief
Executive Officer and President of Forest Laboratories, Inc. “We believe
eluxadoline will be very complementary to our anchor GI product Linzess
and additive to our broader GI portfolio, making us more relevant to
gastroenterologists and primary care physicians. With eluxadoline, we
expect to have one of the broadest product offerings for the $38 billion
GI disease market.”
Eluxadoline is a first-in-class, locally-acting mu opioid receptor
agonist and a delta opioid receptor antagonist for treating symptoms of
diarrhea-predominant irritable bowel syndrome (IBS-d). IBS-d affects
approximately 28 million patients in the United States and Europe. In
February, Furiex announced top-line results indicating the company's two
pivotal Phase III clinical trials evaluating the efficacy and safety of
eluxadoline in the treatment of IBS-d met both the U.S. Food and Drug
Administration (FDA) and the European Medicines Agency formally
agreed-upon primary endpoints of composite response based on
simultaneous improvements in stool consistency and abdominal pain.
Furiex is on track to submit a New Drug Application for eluxadoline by
the end of the third quarter of 2014.
“Furiex has built a strong portfolio of life-improving therapies for
patients, including development stage assets and royalty-bearing
products. Forest’s acquisition of our company is a testament to the
strength of the business we have built,” said Fred Eshelman, founding
chairman of Furiex. "I am very proud of our team for its hard work and
excellent development of eluxadoline in just under four years. There is
a strong business fit between Furiex and Forest, and eluxadoline is
expected to contribute to Forest’s leading GI franchise.”
The terms of the merger agreement provide for Forest to pay $95 per
share to Furiex shareholders. In addition, Forest agreed to make
additional payments to Furiex shareholders that are contingent upon
achievement of certain designations following FDA review. If the optimal
CVR milestone is realized, the combined cash and CVR consideration
payable in the proposed transaction will be $125 per share, or
approximately $1.5 billion in the aggregate. If eluxadoline receives FDA
approval and is not scheduled as a controlled drug by the DEA, holders
of the CVR will receive $30 per share or approximately $360 million in
the aggregate. If eluxadoline is designated as a Schedule 4 or Schedule
5 controlled drug by the DEA, holders of the CVR will receive $10 per
share (approximately $120 million in the aggregate) or $20 per share
(approximately $240 million in the aggregate), respectively.
Forest expects to divest Furiex’s royalties on alogliptin and Priligy®
to Royalty Pharma for a payment of approximately $415 million, which,
after tax, will effectively reduce Forest’s purchase price by
approximately $315 million. “Our partnership with Royalty Pharma will
allow us to expand our GI franchise in a capital-efficient manner,
preserving Forest capital to be deployed to areas which are core to
Forest,” said Saunders.
“In partnering on this transaction, we believe Forest and Royalty Pharma
have created a win-win situation,” said Pablo Legorreta, Chief Executive
Officer of Royalty Pharma. “Forest will acquire a company with a very
exciting GI product candidate, while Royalty Pharma will acquire the
non-core passive royalty assets. Our goal is to become the M&A partner
of choice for pharma and biotech companies, allowing them to focus their
resources on strategic assets.”
Forest expects to use cash on hand to fund the acquisition of Furiex.
Forest’s planned acquisition of Furiex is expected to close in the
second or third quarter of 2014 pending regulatory review and Furiex
shareholder approval and is not expected to affect the timing of Actavis
plc’s previously announced acquisition of Forest. Actavis has consented
to Forest’s acquisition of Furiex and supports the transaction.
Covington & Burling LLP served as Forest’s legal counsel, Furiex was
advised by Kirkland & Ellis LLP and Wyrick Robbins Yates & Ponton LLP,
and Royalty Pharma was advised by Goodwin Procter LLP. BofA Merrill
Lynch and Credit Suisse acted as financial advisors to Furiex.
Conference call details:
Forest executives will host a conference call with investors at 8:30 AM
EST today to discuss the details of today’s announcement. The conference
call will be webcast live on the Company’s website at www.frx.com.
Please log on to the website at least fifteen minutes prior to the
conference call as it may be necessary to download software to access
the call. A replay of the conference call will be available until May
28, 2014 by dialing (800) 839-1246 (US or Canada) or +1 (402) 220-0464
(international).
About Forest Laboratories and Its Products
Forest Laboratories (NYSE: FRX) is a leading, fully integrated,
specialty pharmaceutical company largely focused on the United States
market. Forest markets a portfolio of branded drug products and develops
new medicines to treat patients suffering from diseases principally in
five therapeutic areas: central nervous system, cardiovascular,
gastrointestinal, respiratory, and anti-infective. Forest’s strategy of
acquiring product rights for development and commercialization through
licensing, collaborative partnerships and targeted mergers and
acquisitions allows Forest to take advantage of attractive late-stage
development and commercial opportunities, thereby managing the risks
inherent in drug development. In January 2014, Forest acquired Aptalis
Pharmaceuticals for $2.9 billion in cash in order to gain access to its
GI and Cystic Fibrosis products, including treatments for Ulcerative
Proctitis, Duodenal Ulcers, H. Pylori, Anal Fissures, and Pancreatic
Insufficiency. In February 2014, Forest and Actavis plc announced an
agreement where Forest would be acquired for about $25 billion in cash
and stock. The acquisition of Forest by Actavis is contingent upon
regulatory and shareholder approvals.
Forest is headquartered in New York, NY.
About Furiex
Furiex Pharmaceuticals (NASDAQ: FURX) is a drug development
collaboration company that uses innovative clinical development design
to accelerate and increase value of drug development programs by
advancing them through the drug discovery and development process in a
cost-efficient manner. Furiex’s drug development programs are designed
and driven by a core team with extensive drug development experience.
Furiex collaborates with pharmaceutical and biotechnology companies and
has a diversified product portfolio and pipeline with multiple
therapeutic candidates, including one Phase III-ready asset, two
compounds in Phase III development, one of which is with a partner, and
four products on the market. Furiex's mission is to develop innovative
medicines faster and at a lower cost, thereby improving profitability
and accelerating time to market while providing life-improving therapies
for patients. For more information, visit www.furiex.com.
Furiex is headquartered in Morrisville, NC.
About Royalty Pharma
Royalty Pharma is the industry leader in acquiring royalty interests in
marketed and late-stage biopharmaceutical products, with total assets of
approximately $10 billion. Royalty Pharma owns royalty interests in 39
products including, Humira®, Lyrica®, Remicade®, Prezista®, Emtriva®,
Neupogen®/Neulasta®, Januvia®/Janumet®, Tecfidera® and Imbruvica®.
Royalty Pharma also funds late-stage clinical trials in exchange for
royalty interests. More information on Royalty Pharma is available at www.royaltypharma.com.
Royalty Pharma is headquartered in New York, NY.
Safe Harbor Statement
This release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These statements
involve a number of risks and uncertainties, including that the
transactions may not be timely completed, if at all, that prior to
completion of the transactions, Furiex’s business may experience
significant disruptions due to transaction-related uncertainty or other
factors, the timing and the benefits of the business combination
transaction, the ability to obtain regulatory approvals of the
transaction on the proposed terms and schedule, the requirement that
Furiex’s security holders approve the transaction, the risk that the
businesses will not be integrated successfully, the difficulty of
predicting FDA approvals, the acceptance and demand for new
pharmaceutical products, the impact of competitive products and pricing,
the timing of Actavis plc’s acquisition of Forest, the timely
development and launch of new products, and the risk factors listed from
time to time in Forest Laboratories’ Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q and any subsequent SEC filings and
Furiex’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and
any subsequent SEC filings. Neither Forest nor Furiex assumes any
obligation to update forward-looking statements contained in this
release to reflect new information or future events or developments.
Each of Forest and Furiex intends such forward-looking statements to be
covered by the Safe Harbor provisions for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995, and
is including this statement for purposes of complying with these Safe
Harbor provisions. Forward-looking statements, which are based on
certain assumptions and describe future plans, strategies and
expectations of each of Forest and Furiex, may be identified by use of
the words “believe,” “expect,” “intend,” “anticipate,” “project,” or
similar expressions. Investors should not rely on forward-looking
statements because they are subject to a variety of risks, uncertainties
and other factors that could cause actual results to differ materially
from such forward-looking statements. All forward-looking statements in
this document are qualified in their entirety by this cautionary
statement.
Additional Information and Where to Find It
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of any
vote or approval, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of any
such jurisdiction. In connection with the proposed acquisition of Furiex
by Forest, Furiex will file a proxy statement with the SEC (the “Furiex
Proxy”). Additionally, Furiex will file other relevant materials with
the SEC in connection of the proposed acquisition. The Furiex Proxy and
other materials that Furiex plans to file with the SEC will contain
important information about Furiex, Forest, the proposed merger and
related matters. The Furiex Proxy will be delivered to the security
holders of Furiex. In connection with the proposed merger between
Actavis, plc (“Actavis”) and Forest, Actavis has filed with the SEC a
registration statement on Form S-4 that includes a preliminary joint
proxy statement of Actavis and Forest that also constitutes a
preliminary prospectus of Actavis (the “Forest/Actavis Proxy and
Prospectus”). The registration statement is not yet effective. The
definitive Forest/Actavis Proxy and Prospectus will be delivered to
security holders of Actavis and Forest. INVESTORS AND SECURITY HOLDERS
ARE URGED TO READ THE FURIEX PROXY, THE FOREST/ACTAVIS PROXY AND
PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC THAT HAVE
BEEN OR WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN
THEY BECOME AVAILABLE, AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
THE PROPOSED ACQUISITION AND THE PARTIES THERETO THAT SECURITY HOLDERS
SHOULD CONSIDER BEFORE MAKING A DECISION ABOUT THE MERGER. Security
holders of Furiex may obtain free copies of the Furiex Proxy and other
documents filed with the SEC by Forest or Furiex, without charge, from
the SEC's website (http://www.sec.gov).
In addition, investors and security holders of Furiex may obtain free
copies of the documents Furiex files with the SEC by directing a written
request to Furiex Pharmaceuticals, Inc., 3900 Paramount Parkway, Suite
150, Morrisville, NC 27560, Attention: Investor Relations. Copies of
Furiex’s filings with the SEC may also be obtained at the “Investors”
section of Furiex’s internet website at www.furiex.com.
Investors and security holders of Actavis and Forest may obtain free
copies of the Forest/Actavis Proxy and other documents filed with the
SEC by Actavis and Forest, without charge, from the SEC's website (http://www.sec.gov).
In addition, copies of the documents filed with the SEC by Actavis may
be obtained free of charge on Actavis’ internet website at www.actavis.com
or by contacting Actavis’ Investor Relations Department at (862)
261-7488. Copies of the documents filed with the SEC by Forest may be
obtained free of charge on Forest’s internet website at www.frx.com
or by contacting Forest’s Investor Relations Department at (212)
224-6713.
Participants in the Solicitation
Forest, Furiex and their directors and certain of their executive
officers may be considered participants in the solicitation of proxies
from the security holders of Furiex in connection with the proposed
transaction between Forest and Furiex. Information about those directors
and executive officers of Furiex, including their ownership of Furiex
securities, is set forth in the proxy statement for Furiex’s 2014 Annual
Meeting of Stockholders, which was filed with the SEC on April 11, 2014,
as supplemented by other Furiex filings with the SEC. Information about
the directors and executive officers of Forest is set forth in its proxy
statement for its 2013 annual meeting of stockholders, which was filed
with the SEC on July 8, 2013 and certain of its Current Reports on Form
8-K. Investors and security holders may obtain additional information
regarding the direct and indirect interests of Furiex, Forest and their
directors and executive officers in the proposed transaction by reading
the applicable proxy statement and other public filings referred to
above. Additional information regarding the participants in the proxy
solicitation and a description of their direct and indirect interests,
by security holdings or otherwise, will be contained in the Furiex Proxy
and other relevant materials to be filed with the SEC when they become
available.
Actavis, Forest, their respective directors and certain of their
executive officers and employees may be considered participants in the
solicitation of proxies in connection with the proposed transaction
between Actavis and Forest. Information regarding the persons who may,
under the rules of the SEC, be deemed participants in the solicitation
of the Actavis and Forest shareholders in connection with the proposed
merger will be set forth in Forest/Actavis Proxy and Prospectus when it
is filed with the SEC. Information about the directors and executive
officers of Forest is set forth in its proxy statement for its 2013
annual meeting of stockholders, which was filed with the SEC on July 8,
2013 and certain of its Current Reports on Form 8-K. Information about
the directors and executive officers of Actavis is set forth in Actavis’
proxy statement for its 2014 annual meeting of shareholders, which was
filed with the SEC on March 28, 2014. Additional information regarding
the participants in the proxy solicitations and a description of their
direct and indirect interests, by security holdings or otherwise, are
contained in the preliminary Forest/Actavis Proxy and Prospectus and
will be contained in the definitive Forest/Actavis Proxy and Prospectus
and other relevant materials to be filed with the SEC when they become
available.
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