Cubist Pharmaceuticals, Inc. (NASDAQ: CBST) and Adolor
Corporation (NASDAQ: ADLR) today announced that they have signed a
definitive agreement under which Cubist will acquire all of the
outstanding shares of Adolor for $4.25 per share in cash, or
approximately $190 million on a fully-diluted basis, net of
Adolor’s third quarter 2011 cash balance. In addition to the
upfront cash payment, each Adolor stockholder will receive one
Contingent Payment Right (CPR), entitling the holder to receive
additional cash payments of up to $4.50 for each share they own if
certain regulatory approvals and/or commercialization milestones
for ADL5945 are achieved. The total transaction is valued at up to
$415 million, net of Adolor’s third quarter 2011 cash balance, and
is expected to be accretive in 2012.
Under the agreement, Cubist will commence a tender offer to
purchase all of the outstanding shares of Adolor for the upfront
cash payment and a CPR. The transaction, which has been unanimously
approved by the Boards of Directors of both companies, is expected
to close in the fourth quarter of 2011.
Adolor markets ENTEREG® (alvimopan), the first and only
FDA-approved therapy to accelerate the time to upper and lower
gastrointestinal recovery following partial large or small bowel
resection surgery with primary anastomosis. ENTEREG is an oral,
peripherally-acting mu opioid receptor antagonist. Cubist, with its
focus on addressing acute care and hospital needs, will leverage
its existing commercial operations to promote ENTEREG. Launched in
2008, ENTEREG generated more than $25 million in U.S. sales in 2010
and $15.7 million through June 30, 2011. Cubist anticipates peak
ENTEREG sales of over $100 million annually.
Adolor’s lead development program is ADL5945, an oral,
peripherally-restricted mu opioid receptor antagonist. It is
currently in development for the treatment of chronic opioid
induced constipation (OIC), a growing, multi-billion dollar,
currently underserved market. Adolor announced positive Phase 2
data for ADL5945 in August 2011 and Phase 3 trials are expected to
be initiated in 2012. Cubist plans to retain certain U.S. and
specialty rights while seeking a partner to assist with ex-U.S. and
primary care commercialization.
“This transaction is an excellent strategic fit for Cubist and
the latest milestone in what has been a transformational year for
the company,” said Cubist President and Chief Executive Officer
Michael Bonney. “ENTEREG is a first-in-class therapy with strong
growth potential, and we believe our experienced sales force and
strong commercial platform will realize the potential of this
important hospital product. With the addition of ADL5945, Cubist
will have a truly outstanding late-stage pipeline with three strong
candidates addressing significant markets. We are excited about the
acquisition of Adolor and believe it will deliver significant value
to our shareholders, hospital customers, and patients.”
Michael Dougherty, Adolor’s President and Chief Executive
Officer, stated, “This transaction delivers significant immediate
value to Adolor stockholders, as well as potential future value
through the CPRs. Cubist shares our commitment to patients and
their health care providers, and we expect that ENTEREG and ADL5945
will benefit from Cubist’s proven track record and larger platform
in development and commercialization.”
Terms of the CPR call for additional cash payments of up to
$4.50 per CPR. The CPR will entitle each Adolor stockholder to
receive up to $3.00 per share if ADL5945 receives regulatory
approval in the U.S. and up to $1.50 per share if ADL5945 receives
regulatory approval in the European Union, in both instances prior
to July 1, 2019. In each case, the size of the payment would depend
on the parameters of the approval. The CPR will not be publicly
traded.
Morgan Stanley is acting as the financial advisor to Cubist.
Stifel Nicolaus Weisel is acting as the financial advisor to
Adolor. Ropes & Gray LLP is serving as legal counsel to Cubist
and Dechert LLP is serving as legal counsel to Adolor.
******CONFERENCE CALL & WEBCAST INFORMATION****** Cubist
will host a conference call and live audio webcast WHEN:
Monday, October 24, 2011 at 8:00 a.m. ET LIVE DOMESTIC & CANADA
CALL-IN: 877-407-8289 LIVE INTERNATIONAL CALL-IN: 201-689-8341
24-HOUR REPLAY DOMESTIC & CANADA: 877-660-6853 24-HOUR
REPLAY INTERNATIONAL: 201-612-7415 REPLAY PASSCODES (BOTH
REQUIRED FOR PLAYBACK): ACCOUNT #: 351 CONFERENCE ID #: 381866
CALL WILL ALSO BE BROADCAST LIVE, LISTEN ONLY, VIA THE WEB
AT:
www.cubist.com
Replay will be available for 90 days via the Internet at
www.cubist.com ***********
About Cubist
Cubist Pharmaceuticals, Inc. is a biopharmaceutical company
focused on the research, development, and commercialization of
pharmaceutical products that address significant unmet medical
needs in the acute care environment. Cubist is headquartered in
Lexington, Mass. Additional information can be found at Cubist’s
web site at www.cubist.com.
About Adolor
Adolor Corporation is a biopharmaceutical company specializing
in the discovery, development and commercialization of novel
prescription pain and pain management products.
Adolor's first approved product in the United States is ENTEREG®
(alvimopan), which is indicated to accelerate the time to upper and
lower gastrointestinal recovery following partial large or small
bowel resection surgery with primary anastomosis. ENTEREG is
available only for short-term (15 doses) use in hospitalized
patients. Only hospitals that have registered in and met all of the
requirements for the ENTEREG Access Support and Education
(E.A.S.E.®) program may use ENTEREG. For more information on
ENTEREG, including its full prescribing information, the Boxed
Warning regarding short-term hospital use and the E.A.S.E. Program,
visit www.ENTEREG.com.
The Company's lead development program compound is ADL5945, a
novel mu opioid receptor antagonist being developed for chronic OIC
that demonstrated positive results in Phase 2 trials. The Company
also has several earlier-stage compounds under development for the
management of pain and CNS disorders.
For more information, visit www.adolor.com.
About the Contingent Payment Right (CPR)
Terms of the CPR agreement call for additional cash payments of
up to $4.50 per CPR under certain circumstances. The CPR will not
be publicly traded. The regulatory approvals/commercialization
milestones and payments can be summarized as follows:
• $3.00 per CPR payable if ADL5945 is approved by July 1, 2019
and is the first oral monotherapy treatment for OIC approved by FDA
without certain restrictions, or, if not the first approved, is
approved with a label that does not competitively disadvantage the
product relative to other FDA-approved OIC products.
This $3.00 amount will be reduced by $1.75 to $1.25 if ADL5945
is not the first approved and is approved with a non-competitive
label, provided that such $1.75 can be earned back if certain sales
milestones are achieved.
• $1.50 per CPR payable if ADL5945 is approved by July 1, 2019
and is the first oral monotherapy treatment for OIC approved by the
European Medicines Agency (EMA) without certain restrictions, or,
if not the first approved, is approved with a label that does not
competitively disadvantage the product relative to other
EMA-approved OIC products.
This $1.50 amount will be reduced by $1.00 to $0.50 if ADL5945
is not first approved and is approved with a non competitive label,
provided that such $1.00 can be earned back if certain sales
milestones are achieved.
Additional Information
The CPRs will be deemed contingent consideration under the
revised standard IFRS 3 (business combinations), applicable to all
transactions undertaken on January 1, 2010 or thereafter. As a
result, the fair value of the CPR at the date of change of control
will be included in the price of the acquisition and set off by a
financial liability, the amount of which will reflect the
obligation to pay the potential price adjustments in cash. Future
changes in the fair value of the CPR tied to post-acquisition
events will be recognized in Cubist’s income statement.
Important Additional Information will be Filed with the U.S.
Securities Exchange Commission (SEC)
This press release is neither an offer to purchase nor a
solicitation of an offer to sell securities. Cubist has not
commenced the tender offer for shares of Adolor stock described in
this press release.
At the time the tender offer is commenced, Cubist will file with
the SEC and mail to Adolor stockholders a Tender Offer Statement on
Schedule TO and related exhibits, including the offer to purchase,
letter of transmittal and other related documents, and Adolor will
file with the SEC and mail to its stockholders a Tender Offer
Solicitation/Recommendation Statement on Schedule 14D-9 in
connection with the transaction. These will contain important
information about Cubist, Adolor, the transaction, and other
related matters. Investors and security holders are urged to read
each of these documents carefully when they are available.
Investors and security holders will be able to obtain free copies
of the Tender Offer Statement, the Tender Offer
Solicitation/Recommendation Statement, and other documents filed
with the SEC by Cubist and Adolor through the Website maintained by
the SEC at www.sec.gov. In addition, investors and security holders
will be able to obtain free copies of the Tender Offer Statement,
the Tender Offer Solicitation/Recommendation Statement, and the
other documents filed with the SEC by contacting the Investor
Relations departments of Cubist or Adolor at their respective email
addresses, included below.
Cautionary Note Regarding Forward-Looking Statements
Statements in this press release regarding the proposed
transaction between Cubist and Adolor, the expected timetable for
completing the transaction, future financial and operating results,
benefits and synergies of the transaction, the expectation that the
transaction will be accretive, Cubist’s and Adolor’s product
candidates, including Cubist’s plans to seek a partner for ADL5495,
Cubist’s expectation of peak sales of ENTEREG, the expected impact
of the anticipated transaction on Cubist’s earnings, and any other
statements about Cubist or Adolor managements’ future expectations,
beliefs, goals, plans, or prospects constitute forward-looking
statements. For further information concerning forward-looking
statements, please read the disclosure under the heading
“Cautionary Note Regarding Forward-Looking Statements” in Cubist’s
Quarterly Report on Form 10-Q for the quarter ended June 30, 2011,
and in Adolor’s Quarterly Report on Form 10-Q for the quarter ended
June 30, 2011, each of which has been filed with the SEC. Any
statements that are not statements of historical fact (including
statements containing the words “believes,” “plans,” “anticipates,”
“expects,” “estimates,” and similar expressions) should also be
considered to be forward-looking statements. There are a number of
important factors that could cause actual results or events to
differ materially from those indicated by such forward-looking
statements, including: the possibility that certain closing
conditions to the transaction will not be met; the ability to
consummate the transaction; the ability of Cubist to successfully
integrate Adolor’s operations and employees; the ability to realize
anticipated synergies and cost savings; risks related to drug
development and commercialization; and the other factors described
under the heading “Risk Factors” in Cubist’s Quarterly Report on
Form 10-Q for the quarter ended June 30, 2011, and in Adolor’s
Quarterly Report on Form 10-Q for the quarter ended June 30, 2011,
each of which has been filed with the SEC. Except as otherwise
required by law, Cubist and Adolor disclaim any intention or
obligation to update any forward-looking statements as a result of
developments occurring after the date of this press release.
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