Cypress Bioscience Sends Letter to Ramius
August 17 2010 - 9:00AM
Marketwired
Cypress Bioscience, Inc. (NASDAQ: CYPB) today announced that its
Board of Directors has sent a letter to Ramius LLC in response to
Ramius' letter dated August 11, 2010.
The text of the letter to Jeffrey C. Smith, Partner Managing
Director of Ramius, from Jay D. Kranzler, MD, PhD, Chairman and
Chief Executive Officer of Cypress Bioscience, is below:
Dear Mr. Smith:
The Board of Directors has carefully reviewed your letter dated
August 11, 2010.
With the assistance of financial and legal advisors, the Board
concluded that your latest proposal is identical to the original
proposal outlined in your letter dated July 19, 2010, and repeated
in your letter dated August 5, 2010. Specifically, your proposal
continues to be non-binding, is subject to due diligence and
indicates a purchase price of $4.00 per share in cash with a
potential for a 50% retained interest in BL-1020.
While we understand that you have clarified your "willingness to
consider" a 50% retained interest in BL-1020, we do not believe you
have made any substantive change to your original proposal of July
19, 2010. Given there is no substantive change to your proposal,
our position, as communicated in our letter to you dated August 5,
2010, remains the same. We unanimously concluded that your proposed
$4.00 per share price grossly undervalues Cypress' current business
and future prospects and is not in the best interests of the other
Cypress stockholders.
It is clear that Ramius is interested in acquiring Cypress. You
are motivated to pay the lowest price possible as quickly as
possible so that you can generate the highest rate of return.
Indeed, you likely have a duty to your investors to do exactly
that. In contrast, our duty is to act in the best interests of the
other Cypress stockholders. Your motivation and duty directly
conflict with ours, and therefore, we do not believe you could be
truly interested in "a transaction that will maximize value for all
shareholders" as you state in your letter.
Your proposed purchase price may represent a premium to a given
day's closing stock price, but our focus is on the value of the
Company's current business and future prospects. We have believed
for some time that the market has seriously undervalued Cypress and
your interest in acquiring the Company has confirmed our long held
belief.
Our Board and management team remain committed to building long
term stockholder value, and we believe that our current strategy of
developing a portfolio of CNS drug candidates will deliver superior
value to Cypress stockholders. However, as we have stated
previously, we will seriously consider any bona fide acquisition
proposal or other transaction that reflects the full and fair value
of Cypress' current business and future prospects. Given your
current proposal and your failure to change any material term from
your original proposal, the Board believes it would be imprudent to
start a negotiation or enter into any type of "go shop" transaction
with you.
Separately, the Cypress Board has rotated the position of lead
independent director. Accordingly, please address all future
correspondence to our new lead independent director, Daniel H.
Petree.
On behalf of the Board of Directors,
/s/ Jay D. Kranzler, MD, PhD
Jay D. Kranzler, MD, PhD Chairman and Chief Executive
Officer
About Cypress Bioscience Cypress
Bioscience is a pharmaceutical company dedicated to the development
of innovative drugs targeting large unmet medical needs for
patients suffering from a variety of disorders of the central
nervous system. Since 1999, Cypress has received multiple FDA
approvals, including Prosorba™, a medical device for rheumatoid
arthritis, and Savella® (milnacipran HCl), for fibromyalgia. The
Company focuses on generating shareholder value by reaching
clinical development milestones as quickly and efficiently as
possible. Cypress' currently marketed products include Savella and
the Avise PG(SM) and Avise MCV(SM) therapeutic monitoring,
diagnostic and prognostic testing services for rheumatoid
arthritis. Development-stage assets include CYP-1020 for cognitive
impairment in schizophrenia, as well as AVISE-SLE(SM), a lupus
diagnostic testing service. More information on Cypress and its
products and development assets is available at
http://www.cypressbio.com/.
Forward-Looking Statements This press
release, as well as Cypress' SEC filings and website at
http://www.cypressbio.com/, contain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. These statements include statements with respect to the
value of Cypress' current business and future prospects and
business strategy. Actual results could vary depending a number of
factors including Cypress's need to spend cash reserves on drug
development or other matters, risks involved in selling a business,
and other risks and uncertainties described in Cypress' most recent
Annual Report on Form 10-K, most recent Quarterly Report on Form
10-Q and any subsequent SEC filings. You are urged to consider
statements that include the words "may," "will," "would," "could,"
"should," "believes," "potential," "expects," "plans,"
"anticipates," "intends," or the negative of those words or other
comparable words to be uncertain and forward-looking. The
statements in this press release speak only as the date hereof, and
Cypress undertakes any obligation to publicly update any
forward-looking statements, whether as a result of new information,
future events or otherwise.
INVESTOR CONTACTS: MacKenzie Partners, Inc. Amy Bilbija /
Bob Marese 650-798-5206 / 212-929-5500 MEDIA CONTACTS: Joele
Frank, Wilkinson Brimmer Katcher Andrew Siegel / Jillian Ginsburg
212-355-4449
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