- 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. DATASOURCE: Abbott 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 Web site: http://www.tricortablets.com/
http://www.abbott.com/ Company News On-Call:
http://www.prnewswire.com/comp/110328.html
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