Forest Laboratories Issues Statement Regarding Litigation with Icahn
August 05 2011 - 2:25PM
Business Wire
Forest Laboratories, Inc. (NYSE: FRX) today issued the following
statement in connection with the Delaware Chancery Court’s decision
to allow entities affiliated with Carl Icahn to lift
confidentiality restrictions on certain documents relating to the
potential action by the Office of the Inspector General of the U.S.
Department of Health and Human Services (HHS-OIG) to exclude Howard
Solomon, Chairman and Chief Executive Officer of Forest, from
participating in federal healthcare programs:
"Mr. Icahn's decision to publicize the Delaware litigation is a
sideshow and an effort to advance his self-serving agenda in his
proxy contest. The documents to which he refers demonstrate what
Forest has said all along: that Mr. Solomon has never been accused
of any wrongdoing; that the potential exclusion is based solely on
his ‘association with’ Forest; and that HHS-OIG is considering
embarking on an unprecedented and unjustified action.
Icahn is wrong when he states Forest that does not have a plan
to deal with the ‘contingency’ of Mr. Solomon’s potential
exclusion. As previously announced, the Forest Board does have a
succession plan. In the event that HHS-OIG decides to move forward
and Mr. Solomon’s legal challenges are unsuccessful, the succession
plan will be implemented, Mr. Solomon will step aside and the
Company will continue to do business with the federal
government.
In trumpeting a single request regarding other Forest
executives, Icahn is seizing on a fleeting piece of a complex,
six-year negotiation. The fact is that there was no basis for the
government’s request – it was refused and the government quickly
withdrew it. If anything, the documents reflect how the government
allowed Forest to agree to a final settlement with the expectation
that the entire exclusion issue had been dropped, only to have it
raised later by HHS-OIG in an unprecedented action and without a
valid basis.
Icahn’s characterization of Forest’s Board process is similarly
misleading. The Board’s determination to challenge HHS-OIG’s
unprecedented action was made by a majority of independent
directors, advised by outside counsel, who were fully informed of
the matters concerning the related Department of Justice
investigation and its resolution over a six-year period.
Icahn is misusing these documents in an effort to draw attention
away from the fact that his nominees are unqualified and conflicted
by their service on the boards of companies with which Forest
competes for product opportunities. Forest continues to perform
well – outperforming both the S&P 500 Index and the Amex
Pharmaceutical Index (DRG) over the short term and long term, and
it has developed one of the strongest and most exciting product
portfolios in the industry. Forest urges shareholders not to be
distracted and to remain focused on the important issues before the
Company.”
Additional Background
As previously announced, Forest Pharmaceuticals, Inc., a wholly
owned subsidiary of Forest Laboratories, Inc., entered into a
global settlement in September 2010, as part of which the company,
among other things, pleaded guilty in November 2010 to two strict
liability, no-intent misdemeanor violations of the federal Food,
Drug and Cosmetic Act, relating to conduct that occurred almost a
decade ago involving the distribution and marketing of Levothroid
and Celexa. The company agreed to a total payment in excess of $313
million to resolve all criminal and civil claims.
Forward Looking Information
Except for the historical information contained herein, this
document 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
the difficulty of predicting FDA approvals, the acceptance and
demand for new pharmaceutical products, the impact of competitive
products and pricing, the timely development and launch of new
products, changes in laws and regulations affecting the healthcare
industry and the risk factors listed from time to time in Forest
Laboratories’ Annual Reports on Form 10-K (including the Annual
Report on form 10-K for the fiscal year ended March 31, 2011),
Quarterly Reports on Form 10-Q, and any subsequent SEC filings.
Important Additional Information
Forest Laboratories, its directors, director nominees and
certain of its executive officers may be deemed to be participants
in the solicitation of proxies from Forest shareholders in
connection with the matters to be considered at Forest
Laboratories’ 2011 Annual Meeting. On July 18, 2011, Forest
Laboratories filed its definitive proxy statement (as it may be
amended, the “Proxy Statement”) with the U.S. Securities and
Exchange Commission (the “SEC”) in connection with such
solicitation of proxies from Forest shareholders. FOREST
SHAREHOLDERS ARE STRONGLY ENCOURAGED TO READ THE PROXY STATEMENT
AND ACCOMPANYING PROXY CARD AS THEY CONTAIN IMPORTANT
INFORMATION. Detailed information regarding the identity of
participants, and their direct or indirect interests, by security
holdings or otherwise, is set forth in the Proxy Statement,
including Appendix B thereto. Shareholders can obtain the Proxy
Statement, any amendments or supplements to the Proxy Statement and
other documents filed by Forest Laboratories with the SEC for no
charge at the SEC’s website at www.sec.gov. Copies are also
available at no charge at Forest Laboratories’ website at
www.frx.com or by writing to Forest Laboratories at 909 Third
Avenue, New York, New York 10022.
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