Deal Also Includes Up to $30 per share in a
Contingent Value Right for Furiex Shareholders
Creates a Leading GI Company within
Forest- Acquisition Adds Global Rights to Eluxadoline- New Drug
Application Expected to be Filed in 2014- Eluxadoline is
Complementary to Linzess for IBS-C and CIC and Additive to Forest’s
GI Treatments Acquired in Acquisition of Aptalis
Forest to Partner with Royalty Pharma by
Divesting Furiex’s Royalty Rights on Alogliptin and
Priligy®
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.
FOREST InvestorsFrank J. Murdolo, 212-224-6714Vice
President, Investor Relationsmedia.relations@frx.comorFOREST
– MediaAmanda Kaufman, 646-231-7316Media
Relationsamanda.kaufman@frx.comorFURIEX –
InvestorsSailash Patel, 919-456-7814CFO & VP Strategic
Developmentsailash.patel@furiex.comorFURIEX –
MediaTony Plohoros, 908-940-01356 Degrees
Communicationstplohoros@6degreespr.comorROYALTY PHARMA -
MediaGeorge Lloyd, 212-883-2275Executive Vice President,
Investmentsglloyd@royaltypharma.comorROYALTY PHARMA -
MediaAlexander V. Perfall, 212-883-2298Vice President,
Investor Relationsaperfall@royaltypharma.com
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