AVANIR ANNOUNCES THE INTENDED ACQUISITION OF A PRIVATE SPECIALTY PHARMACEUTICAL COMPANY
San Diego, May 23, 2006 -- Avanir Pharmaceuticals (NASDAQ: AVNR) announced today that it has entered into a definitive agreement with the shareholders of Alamo Pharmaceuticals, LLC (Alamo) to purchase the Company. Closing is subject to the assumption of debt by the principal shareholder and certain other provisions. Alamo is a privately owned specialty pharmaceutical company with a sales force of approximately fifty representatives currently marketing FazaClo® (clozapine, USP), the only orally-disintegrating formulation of clozapine for the management of severely ill schizophrenic patients who fail to respond adequately to standard schizophrenic drug treatments. FazaClo is also indicated for reducing the risk of suicidal behavior in patients with schizophrenic or schizoaffective disorder.
"FazaClo is an excellent strategic fit for Avanir and acquiring Alamo is an important step forward as we move towards becoming an integrated pharmaceutical company," said Eric K. Brandt, President and Chief Executive Officer of Avanir. "With this acquisition, we significantly enhance our portfolio by adding a marketed CNS product. In addition, Alamo's organization will augment our commercialization capabilities by adding an experienced sales force calling on a base of physicians that overlap with our targeted physicians for Neurodex™, which is under priority review at the U.S. Food and Drug Administration for the treatment of Involuntary Emotional Expression Disorder (IEED). In addition to the attractiveness and potential of FazaClo, the combined organizational capabilities provide a stronger platform for acquiring/licensing other CNS products."
Immediately upon the close of the transaction, Alamo's sales force will continue to promote FazaClo and will begin market development activities focused on increasing the awareness of IEED. In addition to Alamo's sales force, Alamo employs a FazaClo Patient Registry team that is composed of dedicated healthcare, registry, call center, administrative support and data management professionals. These individuals will provide IEED disease state awareness and clinical support of Neurodex.
The upfront acquisition cost of approximately $29 million (excluding transaction costs), consists of approximately $4 million in cash and approximately $25 million in notes. The initial consideration represents approximately three times the current annualized monthly run rate of FazaClo sales. The notes are generally due in three years, with approximately $14 million of the total amount of the notes subject to acceleration at the request of the holder under certain conditions, in which case Avanir may repay accelerated amount in cash or with common stock. In addition, if certain sales milestones are achieved, Avanir will be required to pay up to an additional $40 million.
Avanir will host a conference call and webcast on Tuesday May 23 at 4:30 P.M. ET to discuss the details of the transaction. It is recommended that you go to Avanir's website at least 10 minutes in advance of the webcast to download any applicable software. For those who cannot listen to the live broadcast, an online replay will be available for 30 days, and a phone replay will be available through May 30, 2006, by dialing 800-642-1687 (domestic) and 706-645-9291 (international) and entering the pass-code 9646497.
Alamo Pharmaceuticals, LLC is a privately held specialty pharmaceutical company headquartered in California with operations in New Jersey.
Forward Looking Statements
Statements in this press release that are not historical facts, including statements that are preceded by, followed by, or that include such words as "estimate", "anticipate", "believe", "plan", or "expect", or similar statements, are forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from the future results expressed or implied by such statements. There can be no assurance that Neurodex will receive FDA regulatory approval or that even if such regulatory approval is received, Avanir will be able to market Neurodex successfully. Final review decisions made by the FDA and other regulatory agencies concerning clinical trial results are often unpredictable and outside the influence and/or control of the company. Risks and uncertainties also include risks relating to future FazaClo sales, as well as the risks set forth in Avanir's most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and from time-to-time in other publicly available information regarding the Company. Copies of this information are available from Avanir upon request. Avanir disclaims any intent or obligation to update these forward-looking statements.
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|May 23, 2006|