Depomed Confirms Receipt of Unsolicited Proposal from Horizon Pharma plc
In making its determination with respect to the Prior Proposal, the Depomed Board considered a number of factors, including:
- The Prior Proposal does not reflect the inherent value of
Depomedin light of the Company's standalone prospects: Depomedis in a period of significant growth given the highly successful execution of its acquisition and commercialization strategy which has delivered tremendous value to its shareholders, with Depomed'sstock price recently reaching an all-time high of $28.16on April 27, 2015. The Prior Proposal suggests an acquisition premium of only approximately 3.9% over such price. Depomedis expected to benefit from the NUCYNTA® franchise, which significantly increases the Company's product revenue, cash flow, EBITDA and adjusted earnings per share in 2015 and beyond. This, together with Depomed'sother significant growth opportunities that extend well into the next decade, makes the timing of the Proposal opportunistic as a combination would transfer the future value of Depomedto Horizon at a price the Company believes does not represent the true value of its assets, business and prospects. Depomed'sfinancial and share price performance over the last three years speaks to the soundness of the Company's strategy and its ability to create value for all Depomedstakeholders. In 2012, Depomedhad product sales of approximately $27.5 million. In 2014, Depomed'sproduct sales were $114.2 millionand guidance for 2015 anticipates total product sales of $310-$335 million– and this includes only three quarters of NUCYNTA sales. At the midpoint of Depomed's2015 estimate, the Company's revenues will have grown at a compound annual growth rate of 127%. Depomed'sshare price has increased approximately 330% over the same time period, as of the date of Depomed'sresponse to Horizon on June 25, 2015.
- The Prior Proposal further suggests that
Depomedshareholders would own only approximately 27% of the combined company. However, Depomed'spreliminary analysis shows that the Company's contribution across various metrics such as revenue, EBITDA and unlevered free cash flow would be much greater.
The Depomed Board unanimously believes that the interests of
The following is the text of the letter that was sent on
The Board of Directors ("Board") of
The Board carefully reviewed the Proposal with the assistance of its financial advisors,
Over the last four years,
Building on this success,
Horizon's Opportunistic Proposal Undervalues Depomed, and is Not in the Best Interest of Depomed Shareholders
As outlined above,
The Proposal further suggests that
For the reasons stated above, the Board unanimously rejects the Proposal. Given the highly successful execution of
Depomed is a specialty pharmaceutical company that commercializes products for pain and neurology related disorders. Our NUCYNTA® franchise includes NUCYNTA® ER (tapentadol) extended release tablets indicated for the management of pain, including neuropathic pain associated with diabetic peripheral neuropathy (DPN), severe enough to require daily, around-the-clock, long-term opioid treatment, and NUCYNTA® (tapentadol), an immediate release version of tapentadol, for management of moderate to severe acute pain in adults. Gralise® (gabapentin) is a once-daily treatment approved for the management of postherpetic neuralgia. CAMBIA® (diclofenac potassium for oral solution) is a non-steroidal anti-inflammatory drug indicated for acute treatment of migraine attacks with or without aura in adults (18 years of age or older). Zipsor® (diclofenac potassium) Liquid Filled Capsules is a non-steroidal anti-inflammatory drug indicated for relief of mild to moderate acute pain in adults. Lazanda® (fentanyl) Nasal Spray is an intranasal fentanyl drug used to manage breakthrough pain in adults (18 years of age or older) who are already routinely taking other opioid pain medicines around-the-clock for cancer pain. Gralise, Nucynta ER and various partner product candidates are formulated with Depomed's proven, proprietary Acuform® drug delivery technology. Additional information about Depomed may be found at www.depomed.com.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995. The statements that are not historical facts contained in this release are forward-looking statements that involve risks and uncertainties including, but not limited to, those related to
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