CHESTERBROOK, Pa. and
VANCOUVER, Canada, June 26, 2014 /CNW/ -- Auxilium
Pharmaceuticals, Inc. (NASDAQ: AUXL), a fully integrated specialty
biopharmaceutical company, and QLT Inc. (NASDAQ: QLTI) (TSX: QLT),
a Canadian-based biotechnology company focused on developing
innovative orphan ophthalmology products, today announced that they
have entered into a definitive agreement under which Auxilium plans
to merge with QLT. The transaction is expected to drive shareholder
value creation by accelerating Auxilium's ongoing transformation
into a leading diversified North American specialty
biopharmaceutical company. As a result of the merger, Auxilium
expects to have an expanded corporate platform that includes
focused investments in research and development and the continued
pursuit of new products and M&A due to cost and tax synergies.
The companies also intend to continue to pursue a potential
partnering agreement for QLT's promising late-stage retinoid
program.
Under the terms of the agreement, a wholly-owned subsidiary of
QLT will be merged with and into Auxilium. QLT will remain
incorporated in British Columbia,
Canada, and will be renamed "New Auxilium." Current
shareholders of Auxilium will receive 3.1359 QLT shares for each
Auxilium share, subject to certain adjustments. For QLT
shareholders, the transaction represents a 25% premium based on a
calculation of the closing NASDAQ stock prices of Auxilium and QLT
on June 25, 2014, the last trading
day prior to the announcement of the merger. When completed,
Auxilium shareholders will own approximately 76% of the combined
entity on a fully diluted basis, and current QLT shareholders will
own approximately 24%, subject to certain adjustments.
Adrian Adams, Chief Executive
Officer and President of Auxilium, stated, "Building on Auxilium's
strong foundation and commercial expertise, the merger with QLT
represents a unique opportunity to accelerate our desired strategic
transformation into a leading, diversified North American specialty
biopharmaceutical company. We are creating what we believe is a
more competitive and efficient platform to capitalize on greater
market opportunities and position Auxilium to deliver meaningful
value for shareholders while enhancing our ability to invest in and
offer innovative products that make a difference in the lives of
underserved patients."
"We believe that this is an excellent transaction for QLT
shareholders and provides them with the opportunity to benefit from
the potential upside of the combined company," said Jason Aryeh, Chairman of QLT. "We believe that
Adrian Adams and the Auxilium team
have proven their ability to execute and deliver on a strategy for
providing quality specialty biopharmaceutical products to fill
significant unmet medical needs around the world. I am confident
that under their leadership, and with the advantages presented by
our combined organization, this transaction will leave the merged
company well-positioned to achieve sustained growth."
The combined organization will be led by Auxilium's current
leadership team and will maintain Auxilium's current offices in
Chesterbrook, Pennsylvania. All
current Auxilium directors are expected to join the merged
company's board, joined by two current QLT directors. Auxilium does
not expect any material changes to its current U.S. operations or
employment as a result of this transaction, and expects to grow its
presence in both the U.S. and Canada. Shares of the combined company are
expected to trade on NASDAQ and QLT is expected to be delisted from
the Toronto Stock Exchange.
Mr. Adams continued, "We believe this transaction will
facilitate the continued build out of our current portfolio and
provide us with the corporate platform and strong financial
position to build on our strength in men's healthcare and enable
expansion into new specialty therapeutic focus areas. The
transaction aligns with Auxilium's well-defined growth strategy and
our intention to build a more diversified global organization
through the aggressive pursuit of product licensing and M&A. We
expect Auxilium to create increased value for shareholders and
patients for years to come."
QLT Retinoid Program
QLT's synthetic retinoid program is a replacement for
11-cis-retinal and is under development for the treatment of
retinal diseases caused by gene mutations that interfere with the
availability of 11-cis-retinal. QLT has conducted safety and proof
of concept clinical studies to evaluate its oral synthetic retinoid
in patients with Leber Congenital Amaurosis (LCA) or Retinitis
Pigmentosa (RP). The innovative ophthalmology program is nearing
Phase 3 development. With its orphan drug designation, QLT's
synthetic retinoid program augments Auxilium's existing orphan drug
portfolio and allows Auxilium to expand its orphan drug reach
outside of the U.S. Auxilium and QLT intend to continue to pursue
discussions around a potential partnering agreement for this
promising late-stage retinoid program.
Approvals and Further Details
The transaction, which has been unanimously approved by the
Boards of both companies, is subject to certain conditions and
approvals, including regulatory approvals in the U.S. and
Canada, if necessary, the approval
of both companies' shareholders, consents under Auxilium's senior
secured credit facility required as a result of the transaction or,
in lieu of such consents, the refinancing of such facility, receipt
of an opinion of counsel to Auxilium that "New Auxilium" should not
be treated as a U.S. domestic corporation for U.S. federal income
tax purposes, and other negotiated closing conditions. Deutsche
Bank has delivered a commitment letter for a $225 million facility for the refinancing of the
senior secured credit facility (together with cash on hand) that is
subject to the execution of definitive agreements and other
conditions. The transaction is expected to close in the
fourth quarter of 2014, and is expected to be taxable to Auxilium
shareholders. Holders representing approximately 32% of QLT shares
outstanding have agreed to vote in favor of the transaction.
Deutsche Bank, Skadden Arps and Morgan
Lewis acted as advisors to Auxilium. Houlihan Lokey
Financial Advisors, Inc. also acted as an advisor to Auxilium.
Credit Suisse, McCullough O'Connor Irwin LLP, Nutter McClennen
& Fish LLP and KPMG LLP acted as advisors to QLT.
Conference Call
Auxilium will conduct a conference
call with financial analysts to discuss this news release today at
8:30 a.m. ET. The presentation slides
to be used during the call will be available on the "Investors"
section of Auxilium's web site under the "Presentations" tab at
8:30 a.m. ET. A question and answer
session will follow the presentation. The conference call and the
presentation slides will be simultaneously webcast on the
"Investors" section of Auxilium's website under the "Events" tab.
The conference call will be archived via webcast for future review
until July 26, 2014. Investors and
other interested parties may call 866-510-0712 and enter passcode
AUXILIUM. Please dial in 10 minutes prior to the scheduled start
time.
About Auxilium
Auxilium Pharmaceuticals, Inc. is a
fully integrated specialty biopharmaceutical company with a focus
on developing and commercializing innovative products for
specialist audiences. With a broad range of first- and second-line
products across multiple indications, Auxilium is an emerging
leader in the men's healthcare area and has strategically expanded
its product portfolio and pipeline in orthopedics, dermatology and
other therapeutic areas. The Company now has a broad portfolio of
12 approved products. Among other products in the U.S., Auxilium
markets edex® (alprostadil for injection), an injectable
treatment for erectile dysfunction, Osbon ErecAid®, the
leading device for aiding erectile dysfunction, STENDRA®
(avanafil), an oral erectile dysfunction therapy,
Testim® (testosterone gel) for the topical treatment of
hypogonadism, TESTOPEL® (testosterone pellets) a
long-acting implantable testosterone replacement therapy, XIAFLEX®
(collagenase clostridium histolyticum or CCH) for the treatment of
Peyronie's disease and XIAFLEX for the treatment of Dupuytren's
contracture. The Company also has programs in Phase 2 clinical
development for the treatment of Frozen Shoulder syndrome and
cellulite. To learn more, please visit www.Auxilium.com.
About QLT
QLT is a biotechnology company dedicated to
the development and commercialization of innovative ocular products
that address the unmet medical needs of patients and clinicians
worldwide. QLT is focused on developing its synthetic retinoid
program for the treatment of certain inherited retinal diseases.
QLT's head office is based in Vancouver,
Canada and the Company is publicly traded on NASDAQ Stock
Market (symbol: QLTI) and the Toronto Stock Exchange (symbol: QLT).
For more information about the Company's products and developments,
please visit our web site at www.qltinc.com.
No Offer or Solicitation
This communication is not
intended to and does not constitute an offer to sell or the
solicitation of an offer to subscribe for or buy or an invitation
to purchase or subscribe for any securities or the solicitation of
any vote or approval in any jurisdiction pursuant to the
acquisition or otherwise, nor shall there be any sale, issuance or
transfer of securities in any jurisdiction in contravention of
applicable law. No offer of securities shall be made except by
means of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended.
Additional Information
In connection with the proposed
merger, QLT plans to file with the Securities and Exchange
Commission ("SEC") a Registration Statement on Form S-4 that will
include a joint proxy statement of Auxilium and QLT that also
constitutes a prospectus of QLT. Auxilium and QLT will mail
the joint proxy statement/prospectus to their respective
stockholders. INVESTORS ARE URGED TO READ THE JOINT PROXY
STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE BECAUSE IT WILL
CONTAIN IMPORTANT INFORMATION. You will be able to obtain the
joint proxy statement/prospectus, as well as other filings
containing information about Auxilium and QLT, free of charge, at
the website maintained by the SEC at www.sec.gov and, in QLT's
case, also at the website maintained by the Canadian Securities
Administrators ("CSA") at www.sedar.com. You may also obtain these
documents, free of charge, from Auxilium's website
(www.Auxilium.com) under the heading "Investors – SEC Filings" or
by directing a request to Auxilium, Attention: Investor Relations,
640 Lee Road, Chesterbrook, PA
19087. You may also obtain these documents, free of charge, from
QLT's website (www.qltinc.com) under the tab "Investors" and then
under the headings "Securities Filings" and "Proxy Circulars" or by
directing a request to QLT, Attention: Investor Relations, 887
Great Northern Way, Suite 250, Vancouver,
BC, Canada, V5T 4T5.
Participants in the Solicitation
The respective
directors and executive officers of Auxilium and QLT and other
persons may be deemed to be participants in the solicitation of
proxies in respect of the proposed transaction. Information
regarding Auxilium's directors and executive officers is available
in its definitive proxy statement filed with the SEC by Auxilium on
April 10, 2014, and information
regarding QLT directors and executive officers is available in its
Annual Report on Form 10-K/A filed with the SEC and applicable
Canadian securities regulators by QLT on April 30, 2014. These documents can be obtained
free of charge from the sources indicated above. Other information
regarding the interests of the participants in the proxy
solicitation will be included in the joint proxy
statement/prospectus and other relevant materials to be filed with
the SEC and the applicable Canadian securities regulators when they
become available.
Cautionary Statement Regarding Forward-Looking
Statements
To the extent any statements made in this
press release contain information that is not historical, these
statements are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, as amended,
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, and may be
forward-looking information as defined under applicable Canadian
securities legislation (collectively, "forward-looking
statements").
These forward-looking statements relate to, among other
things, the degree to which the transaction accelerates Auxilium's
ongoing transformation into a leading diversified North American
specialty pharmaceutical company; whether the combined company's
profitability increases in the future; the degree to which the
transaction enhances Auxilium's growth profile, expands its
geographic reach or the efficiencies of Auxilium's platform to
drive shareholder value creation through increased investments in
research and development; whether Auxilium pursues or obtains a
potential strategic or partnering agreement for QLT's late-stage
retinoid program; whether the transaction enables Auxilium to
create a more competitive and efficient global platform, capitalize
on greater market opportunities, positions Auxilium to deliver
value for its shareholders, or enhances Auxilium's ability to
invest in or offer innovative products; whether this transaction
will facilitate the continued build-out of Auxilium's current
portfolio and further build out its men's healthcare portfolio and
establish new specialty therapeutic areas; whether the reorganized
company is positioned to achieve growth, sustained or otherwise;
whether QLT or Auxilium shareholders will receive any of the
anticipated benefits of the transaction; the degree to which the
closing of the transaction results in any changes to Auxilium's
current U.S. operations or employment agreements, whether Auxilium
will grow its presence in either the U.S. or Canada; whether QLT's synthetic retinoid
program augments Auxilium's existing orphan drug portfolio or
allows Auxilium to expand its orphan drug reach outside of the
U.S.; when the transaction will close, if at all; completion of the
various steps of the transaction including filing and mailing of
the joint proxy statement/prospectus; the expected benefits of the
proposed transaction such as efficiencies, cost savings, tax
benefits, enhanced cash management flexibility, growth potential,
market profile and financial strength; the tax consequences to
shareholders; the competitive ability and position of the combined
company; the expected timing of the completion of the transaction;
whether the transaction will be taxable to Auxilium shareholders;
or the securities exchange on which shares of the new parent
company of Auxilium will trade. Forward-looking statements can
generally be identified by the use of words such as "believe",
"anticipate", "expect", "estimate", "intend", "continue",
"plan", "project", "will", "may", "should", "could", "would",
"target", "potential" and other similar expressions. In addition,
any statements that refer to expectations, projections or other
characterizations of future events or circumstances are
forward-looking statements. Although certain of these statements
set out herein are indicated above, all of the statements herein
that contain forward-looking statements are qualified by these
cautionary statements Although Auxilium and QLT believe that
the expectations reflected in such forward-looking statements are
reasonable, such statements involve risks and uncertainties, and
undue reliance should not be placed on such statements. Certain
material factors or assumptions are applied in making
forward-looking statements, including, but not limited to, factors
and assumptions regarding the items outlined above. Actual results
may differ materially from those expressed or implied in such
statements. Important factors that could cause actual results to
differ materially from these expectations include, among other
things, the following: the failure to receive, on a timely basis or
otherwise, the required approvals by Auxilium and QLT stockholders
and government or regulatory agencies (including the terms of such
approvals); the risk that a condition to closing of the merger may
not be satisfied; the possibility that the anticipated benefits and
synergies from the proposed merger cannot be fully realized or may
take longer to realize than expected; the possibility that costs or
difficulties related to the integration of Auxilium and QLT
operations will be greater than expected; the ability of Auxilium
and QLT to obtain consents of lenders or to obtain refinancing in
connection with the transaction, and if the transaction is
consummated, the adequacy of the capital resources of "New
Auxilium;" the ability of the combined company to retain and hire
key personnel and maintain relationships with customers, suppliers
or other business partners; the impact of legislative, regulatory,
competitive and technological changes, including changes in tax
laws or interpretations that could increase "New Auxilium's" or
Auxilium's consolidated tax liabilities, including, if the
transaction is consummated, changes in tax laws that would result
in "New Auxilium" being treated as a domestic corporation for
United States federal tax
purposes; the risk that the credit ratings of the combined company
may be different from what the companies expect; and other risk
factors relating to the biopharmaceutical and medical device
industries, or the business and operations of either of Auxilium or
QLT as detailed from time to time in each of Auxilium's and QLT's
reports filed with the SEC and, in QLT's case, the applicable
Canadian securities regulators. There can be no assurance
that the proposed merger will in fact be consummated.
Additional information about these factors and about the
material factors or assumptions underlying such forward-looking
statements may be found in the body of this press release, as well
as under Item 1.A. in each of Auxilium's and QLT's respective
Annual Reports on Form 10-K for the fiscal year ended December 31, 2013, and Item 1.A in each of
Auxilium's and QLT's most recent Quarterly Report on Form 10-Q for
the quarterly period ended March 31,
2014. Auxilium and QLT caution that the foregoing list of
important factors that may affect future results is not exhaustive.
When relying on forward-looking statements to make decisions with
respect to Auxilium and QLT, investors and others should carefully
consider the foregoing factors and other uncertainties and
potential events. Neither QLT nor Auxilium undertakes any
obligation to update or revise any forward-looking statement,
except as may be required by law.
Auxilium Contacts:
Keri P. Mattox / SVP, IR &
Corporate Communications
Auxilium Pharmaceuticals, Inc.
(484) 321-5900
kmattox@auxilium.com
Nichol L. Ochsner / Senior
Director, IR & Corporate Communications
Auxilium Pharmaceuticals, Inc.
(484) 321-5900
nochsner@auxilium.com
For Media:
George Sard, David Reno, Alexandra
LaManna
Sard Verbinnen and Co.
(212) 687-8080
QLT Contacts:
Investor & Media Relations
Andrea Rabney or David Pitts
Argot Partners
(212) 600-1902
andrea@argotpartners.com
david@argotpartners.com
SOURCE Auxilium Pharmaceuticals, Inc.