Depomed's Board of Directors Unanimously Rejects Purported Revised, Highly Conditional, Unsolicited Proposal from Horizon Pharma plc
The Depomed Board concluded that the
The Depomed Board also notes that the purported increase in the
"Horizon's purported revised, unsolicited proposal does not reflect the value inherent in
The following is the text of the letter that was sent on
Chairman of the Board, President and Chief Executive Officer
The Board of Directors of
As a threshold matter, I note that Horizon's
In fact, we believe your decision not to include an exchange ratio for your initial proposal or purported revised proposal, and your decision to pre-announce earnings the day before the
After careful consideration, including a thorough review of the terms and conditions of the
In reaching its determination to reject the
- The Company's financial and share price performance over the last three years speaks to the soundness of
Depomed'sstrategy and its ability to create value for its shareholders. At the midpoint of Depomed'supdated 2015 guidance, the Company's product sales will have achieved at a compounded annual growth rate since 2012 of 129%. Since the beginning of 2013, Depomed'sshare price has increased approximately 431%, as of July 28, 2015. Depomedhas created significant value through strong commercial execution of its product portfolio.
- We believe that NUCYNTA has blockbuster potential – an even bigger opportunity than we originally anticipated – and we've just relaunched NUCYNTA with our new product positioning and expanded commercial efforts that we initiated in mid-June.
- Gralise has continued its strong growth trajectory, with year over year growth of 38% in the second quarter.
Depomedhas demonstrated the ability to grow products post acquisition, having increased product net sales for Cambia and Lazanda of over 45% and 375%, respectively, since their acquisition.
- Record quarterly net product sales for the second quarter of 2015 were
$94.3 million, an increase of 234% compared to $28.2 millionfor second quarter of 2014 and an increase of 198% compared to $31.7 millionfor first quarter of 2015;
- Second quarter 2015 cash increase of
- The NUCYNTA franchise is a flagship product for Depomed in the multi-billion dollar pain market and
Depomedrecorded full second quarter NUCYNTA net sales of $56.7 million.
- The product franchise was officially re-launched in mid-June with an expanded sales force of 275 plus full marketing and medical support.
- The Depomed Board believes that the NUCYNTA franchise will significantly increase the Company's product revenue, earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted earnings per share, and cash flow in 2015 and beyond.
This, together with
3.We believe the
The proposal outlined in your letter dated
As noted in Horizon's
- With regards to operating synergies, even if Horizon were to retain
Depomed'ssalesforce, there exist meaningful cost synergies in both the general and administrative infrastructure of Depomed.
- Horizon will also accrue meaningful tax savings as part of this transaction. A reduction in
Depomed'seffective tax rate would substantially increase Depomed'scontribution to Horizon.
5. We believe the
The timing of Horizon's unsolicited proposal allows Horizon to offer inadequate consideration while claiming that it is offering a significant premium. The
6. We believe that Horizon's stock and business model present significant risks and uncertainties for
We believe there are risks to Horizon's business model that are not reflected in its stock price.
The Depomed Board believes that Horizon's urgency in buying
For the reasons stated above, among others, the Depomed Board unanimously rejects your
On behalf of the Board of Directors
President and Chief Executive Officer
"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
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/depomeds-board-of-directors-unanimously-rejects-purported-revised-highly-conditional-unsolicited-proposal-from-horizon-pharma-plc-300120778.html
Investor Contact: Depomed, Inc., August J. Moretti, Chief Financial Officer, 510-744-8000, firstname.lastname@example.org; or Christopher Keenan, VP, Investor Relations and Corporate Communication, 510-744-8000, email@example.com; Innisfree M&A Incorporated, Larry Miller / Jonathan Salzberger / Scott Winter, (212) 750-5833; Media Contact: Joele Frank, Wilkinson Brimmer Katcher, Eric Brielmann, 415-869-3950, Andy Brimmer and Averell Withers, 212-355-4449
Minimum 15 minutes delayed.