Abbott (ticker: ABT, exchange: New York Stock Exchange (.N))
News Release -
6-Nov-2006
Abbott to Expand Presence in Lipid Management Market With Acquisition of Kos Pharmaceuticals - Acquisition Strengthens Abbott's Late-Stage Pipeline -
ABBOTT PARK, Ill. and CRANBURY, N.J., Nov. 6 /PRNewswire-FirstCall/ --
Abbott (NYSE: ABT) and Kos Pharmaceuticals, Inc. (Nasdaq: KOSP)today announced
a definitive agreement for Abbott to acquire Kos for $78 per share in cash,
for a total transaction value of $3.7 billion, net of cash currently held by
Kos. Based in Cranbury, N.J., Kos is a specialty pharmaceutical company that
develops and markets proprietary medications for the treatment of chronic
cardiovascular, metabolic and respiratory diseases. The company has a growing
presence in the $20 billion lipid management market.
"Kos Pharmaceuticals is an excellent strategic fit for Abbott, both
scientifically and commercially," said Miles D. White, chairman and chief
executive officer, Abbott. "This acquisition expands Abbott's presence in the
lipid management market and will provide several on-market and late-stage
pipeline products. Kos also complements our existing commercial and research
and development expertise, and increases our R&D spending capacity."
"Since being founded in 1988 by our current Chairman Emeritus Michael
Jaharis and Chairman Daniel Bell, Kos has pioneered the HDL therapy area in
the United States and firmly established Niaspan and Advicor as successful and
highly differentiated therapies," said Adrian Adams, president and chief
executive officer, Kos Pharmaceuticals. "This is an opportune time to become
a part of another fast-growing organization like Abbott with the shared
experience and additional resources to help capture the full value of our
highly differentiated cholesterol franchise and our growing R&D pipeline."
Lipid Management Portfolio
The lipid management market is the single largest pharmaceutical segment
and continues to grow at double-digit rates. Kos Pharmaceuticals' two lead
products are Niaspan(R) (niacin extended-release tablets), an extended-release
niacin product that raises HDL, or good cholesterol levels; and Advicor(R)
(niacin extended-release/lovastatin tablets), a Niaspan/lovastatin combination
product that treats patients with multiple lipid disorders.
A new Niaspan Caplet Formulation with a range of dosages is currently
under U.S. Food and Drug Administration review. Kos is also in late-stage
development with Simcor(R), a fixed-dose combination of Niaspan and
simvastatin (generic Zocor(R)) to treat lipid disorders, which is expected to
be submitted for regulatory review in the United States in the first half of
2007. These on-market cholesterol products and development opportunities will
join Abbott's lipid management portfolio, which includes on-market TriCor(R)
(fenofibrate tablets); a next-generation fenofibrate, ABT-335; and a
TriCor/Crestor(R) development program with AstraZeneca announced in July 2006.
Other Pipeline Products
Kos Pharmaceuticals is also developing a number of other products,
including an asthma medication and an inhaled insulin. Flutiform(TM),
in-licensed from SkyePharma, is currently in late-stage development for adult
and adolescent asthma and will provide an expanded presence for Abbott in the
$10 billion asthma market, in addition to Kos' currently marketed asthma
product. Kos is also developing an inhaled insulin product, which will
complement Abbott's significant presence in the diabetes market -- with its
leading glucose monitoring and diabetes nutritionals businesses.
Financial Terms
Under the terms of the agreement, Abbott will make a tender offer for all
of the outstanding stock of Kos Pharmaceuticals for $78 per share or $3.7
billion, net of cash currently held by Kos. Abbott expects the transaction to
be $0.02 to $0.03 dilutive to ongoing earnings per share in 2007, neutral to
accretive in 2008 and building to significant accretion thereafter. Following
the closing, the transaction is expected to result in one-time charges,
primarily for in-process research and development and integration expenses.
The transaction is structured as a tender offer for all outstanding shares
of Kos Pharmaceuticals followed by a merger. The transaction is subject to
customary closing conditions, including antitrust clearance under the Hart-
Scott Rodino Act and acquisition of a majority of the outstanding Kos
Pharmaceuticals shares in the tender offer. Shareholders owning a majority of
the shares of Kos Pharmaceuticals' common stock have entered into agreements
under which they agreed to tender their shares or have their shares acquired
by Abbott.
TriCor Indication and Safety Information
TriCor (fenofibrate tablets) is a lipid-lowering agent used to treat
abnormal lipid levels in the bloodstream, including cholesterol and
triglycerides. TriCor is a once-daily treatment available in 145 mg and 48 mg
tablets that can be taken with or without food.
TriCor, in addition to appropriate diet, is used to treat adults with high
cholesterol, with or without elevated triglycerides (Fredrickson types IIa,
IIb). TriCor reduces elevated LDL-C ("bad" cholesterol), total cholesterol,
triglycerides and apolipoprotein B, and increases HDL-C ("good" cholesterol).
The effect of TriCor on cardiovascular morbidity and mortality and
noncardiovascular mortality has not been established. Abbott markets TriCor
in the U.S. through an agreement with Solvay Pharmaceuticals. ABT-335
development is co-funded by Solvay Pharmaceuticals.
TriCor, in addition to appropriate diet, is also used to treat adults with
high triglycerides (Fredrickson types IV and V). Excessive body weight,
drinking alcohol, diseases such as diabetes and hypothyroidism, and various
drugs can contribute to high triglyceride levels, and these should be assessed
before a patient is prescribed TriCor tablets. TriCor should only be
prescribed after reasonable attempts to modify lipid profile with diet
modification, exercise and decreased alcohol consumption have failed. It is
important for patients to stay on a diet restricted in saturated fat and
cholesterol while taking TriCor.
TriCor tablets are not for everyone. TriCor should not be taken by people
with serious liver, kidney or gallbladder disease, or by those who may be
allergic or sensitive to the drug.
The combined use of TriCor and HMG-CoA reductase inhibitors (statins) has
not been advised because of a potential for serious side effects that could
lead to acute renal failure. The benefit of further alterations in lipid
levels needs to be weighed against the increased risks of this drug
combination.
TriCor tablets may cause changes in laboratory reports, especially in
liver chemistry results. Regular periodic liver tests should be performed
while patients are taking TriCor. Patients should contact their doctors if
they feel pain in the stomach area while taking TriCor, as this can be a sign
of gallstones or inflammation of the pancreas. TriCor may cause muscle pain
or serious muscle disease, allergic-type reactions and possible changes in
blood chemistry. If patients experience unexpected muscle pain, tenderness or
weakness while taking TriCor, a health-care provider should be contacted
immediately.
Patients should notify their doctor if they are taking any other drugs
while taking TriCor including any other cholesterol-lowering medications.
TriCor may have an effect on drugs that help prevent blood clotting, such as
the blood thinner Coumadin(R) (warfarin sodium tablets, USP), and doctors
should monitor blood-clotting tests more frequently.
Patients should tell their doctors about any side effects they experience,
including breathing problems, back pain and headaches.
For more information about TriCor (fenofibrate) tablets, including full
prescribing information, please visit http://www.tricortablets.com.
Niaspan Indication and Safety Information
Niaspan is the only FDA-approved, once-daily extended-release prescription
formulation of niacin for treating abnormal cholesterol levels. Niaspan is
indicated as an adjunct to diet when the response to a diet restricted in
saturated fat and cholesterol and other nonpharmacologic measures alone has
been inadequate, to reduce elevated total cholesterol, LDL-C, ApoB, and
triglyceride levels, and to increase HDL-C in patients with primary
hypercholesterolemia and mixed dyslipidemia. In patients with a history of
myocardial infarction and hypercholesterolemia, niacin is indicated to reduce
the risk of recurrent non-fatal myocardial infarction or coronary artery
disease and hypercholesterolemia. Niacin, in combination with a bile acid
binding resin, is indicated to slow progression or promote regression of
atherosclerotic disease.
Niaspan is contraindicated in patients with allergies to any of its
ingredients, active peptic ulcer disease, significant or unexplained
persistent liver dysfunction, or arterial bleeding. Niaspan should not be
substituted for equivalent doses of immediate-release niacin. Niaspan should
be prescribed with caution in patients who consume substantial amounts of
alcohol and/or have a past history of liver disease. Liver function tests
should be performed on all patients during therapy with Niaspan. Use of
Niaspan with other lipid-altering medications called statins may increase the
risk of rhabdomyolysis, a rare condition that causes muscles to breakdown. The
most common side effect with Niaspan is flushing of the skin. Other commonly
reported side effects include indigestion, headache, pain, abdominal pain,
nausea, itching, diarrhea, running nose, vomiting and rash. Patients with
diabetes should carefully monitor their blood sugar and report changes to
their doctor.
Advicor Indication and Safety Language
Advicor is a fixed-dose combination product and is not indicated for
initial therapy. Advicor is indicated as an adjunct to diet when the response
to a diet restricted in saturated fat and cholesterol and other
nonpharmacologic measures alone have been inadequate. Advicor is indicated
for the treatment of primary hypercholesterolemia and mixed dyslipidemia in
patients who are taking: lovastatin who require additional TG-lowering or HDL-
raising who may benefit from having niacin added to their therapy or; niacin
who require further LDL-lowering who may benefit from having lovastatin added
to their therapy.
Advicor is contraindicated in patients with a known hypersensitivity to
their components, active liver or peptic ulcer disease, unexplained persistent
liver enzyme elevation, arterial bleeding. Advicor should not be taken by
pregnant or nursing women. This product should be prescribed with caution in
patients who drink substantial amounts of alcohol and/or have a past history
of liver disease. Liver function tests should be monitored periodically.
Combination therapy with niacin and a statin may increase the risk of myopathy
and a serious but rare condition referred to as rhabdomyolysis. The most
common adverse event with Advicor is flushing of the skin. Other commonly
reported adverse events include headache, gastrointestinal symptoms and rash.
Diabetic patients may experience a dose-related rise in blood sugar with these
products.
About Kos Pharmaceuticals, Inc.
Kos Pharmaceuticals, Inc. is a fully integrated specialty pharmaceutical
company engaged in developing, commercializing, manufacturing and marketing
proprietary prescription products for the treatment of chronic diseases with a
particular focus on the cardiovascular, metabolic and respiratory disease
areas. The company's principal product development strategy is to reformulate
existing pharmaceutical products with large market potential to improve
safety, efficacy, and patient compliance. Kos' strategy also includes making
measured investments in new chemical entity research through in-house and
sponsored research, scientific in-licensing and general corporate development
activities. The company currently markets Niaspan, Advicor, Azmacort,
Cardizem LA, Teveten and Teveten HCT. Kos has a strong and growing research
and development pipeline including proprietary drug delivery technologies in
solid-dose, inhalation and aerosol metered-dose device administration to help
fuel sustained, organic sales growth into the future.
About Abbott
Abbott is a global, broad-based health care company devoted to the
discovery, development, manufacture and marketing of pharmaceuticals and
medical products, including nutritionals, devices and diagnostics. The
company employs 65,000 people and markets its products in more than 130
countries.
Abbott's news releases and other information are available on the
company's Web site at http://www.abbott.com.
Additional Information
The tender offer described in this press release has not yet commenced,
and this press release is neither an offer to purchase nor a solicitation of
an offer to sell securities. At the time the tender offer is commenced,
Abbott will file a tender offer statement with the U.S. Securities and
Exchange Commission. Investors and Kos security holders are strongly advised
to read the tender offer statement (including an offer to purchase, letter of
transmittal and related tender offer documents) and the related
solicitation/recommendation statement that will be filed by Kos with the SEC,
because they will contain important information. These documents will be
available at no charge on the SEC's Web site at http://www.sec.gov.
Private Securities Litigation Reform Act of 1995 -
A Caution Concerning Forward-Looking Statements
Some statements in this news release may be forward-looking statements for
purposes of the Private Securities Litigation Reform Act of 1995. Abbott and
Kos Pharmaceuticals caution that these forward-looking statements are subject
to risks and uncertainties that may cause actual results to differ materially
from those indicated in the forward-looking statements including: the tender
offer may not be completed or the merger may not be consummated for reasons
including because conditions precedent to the completion of the acquisition
may not be satisfied. Economic, competitive, governmental, technological and
other factors that may affect Abbott's operations are discussed in Item 1A,
"Risk Factors," and Exhibit 99.1 to our Annual Report on Securities and
Exchange Commission Form 10-K for the year ended Dec. 31, 2005 and in Item 1A,
"Risk Factors," to our Quarterly Report on Securities and Exchange Commission
Form 10-Q for the period ended March 31, 2006, and are incorporated by
reference. For a description of factors that may affect Kos Pharmaceuticals'
future results, see discussion under "Risk Factors Affecting Operations and
Future Results" in Kos Pharmaceuticals' Form 10-Q for the quarter ended June
30, 2006, and periodic reports filed with the Securities and Exchange
Commission. Abbott and Kos Pharmaceuticals undertake no obligation to release
publicly any revisions to forward-looking statements as the result of
subsequent events or developments.
SOURCE Abbott
-0- 11/06/2006
/CONTACT: Media: Melissa Brotz, +1-847-935-3456, or Jonathon Hamilton,
+1-847-935-8646, Financial Community, John Thomas: +1-847-938-2655, or Larry
Peepo, +1-847-935-6722, all of Abbott; Jack Howarth, +1-609-495-0726, or
Nichol Harber, +1-609-495-0726, both of Kos Pharmaceuticals/
/Company News On-Call: http://www.prnewswire.com/comp/110328.html /
/Web site: http://www.tricortablets.com
http://www.abbott.com /
(ABT KOSP)
CO: Abbott; Kos Pharmaceuticals, Inc.
ST: Illinois, New Jersey
IN: MTC HEA
SU: TNM
AM
-- NYM211 --
8908 11/06/2006 07:50 EST http://www.prnewswire.com
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