Miami, FL, August 15, 2007
Noven Completes Acquisition of JDS Pharmaceuticals
Acquisition Expands Business Model and Broadens New Product Pipeline
Phillip M. Satow, JDS CEO and Co-Founder, Appointed to Noven Board of Directors
-- Noven Pharmaceuticals, Inc. (NASDAQ: NOVN) today announced that it has completed the previously-announced acquisition of JDS Pharmaceuticals, LLC. JDS is a specialty pharmaceutical company that currently markets two branded prescription psychiatry products through a targeted sales force and is advancing a significant pipeline of high-potential products in psychiatry and women’s health.
Noven also announced that industry veteran Phillip M. Satow, JDS’s Chief Executive Officer and co-founder, was appointed to Noven’s Board of Directors, effective upon closing of the transaction.
Expanding Noven’s Capabilities & Pipeline
“We are confident that
the acquisition of JDS will significantly increase our growth rate and
sales and earnings potential over the longer term, and will greatly improve
the visibility of our pipeline and financial goals,” said Robert C. Strauss,
Noven’s President, CEO & Chairman.
“The acquisition builds upon our existing strengths and capabilities by adding the infrastructure, products and category expertise necessary to market and sell products ourselves,” said Strauss. “It also significantly expands our pipeline opportunities. The JDS pipeline has the potential to result in the launch of one new product a year for each of the next four years, including what we expect will be the industry’s first once-daily lithium product (Lithium QD), and a women’s health product (Mesafem™) that fits perfectly with Noven’s existing expertise in menopausal therapy. We also have an opportunity to leverage the JDS sales infrastructure by gaining access to other psychiatry products that complement the existing JDS psychiatry portfolio.”
The acquisition provides Noven with substantial immediate, mid-term and long-term benefits, including:
- A self-supporting, leveragable marketing/sales infrastructure, with two high-margin marketed products (Pexeva® and Lithobid®) and substantial expertise in the psychiatry category;
- A next-generation psychiatry pipeline that includes one pending New Drug Application (Stavzor™) and one product in Phase 3 trials (Lithium QD);
- A non-hormonal product (Mesafem™) entering Phase 3 for vasomotor symptoms (hot flashes/night sweats) associated with menopause that is highly complementary with Noven’s expertise in women’s health; and
- Substantially greater sales and gross margin potential, and
greater control over the success of its products.
JDS’s commercialized and developmental product opportunities consist of:
Product |
Indication |
Status |
Estimated
Launch Year |
|---|---|---|---|
| Lithobid® (lithium carbonate) |
Bipolar Disorder | Marketed in the U.S. | Launched |
| Pexeva® (paroxetine mesylate) |
Depression, panic disorder, OCD & GAD |
Marketed in the U.S. | Launched |
| Stavzor™ (valproic acid softgel) |
Bipolar disorder, migraine, & epilepsy | NDA filed; October 2007 PDUFA date | 2008 |
| Lithium QD (once-daily lithium) |
Bipolar disorder | Phase 3 | 2009 |
| Stavzor™ ER (extended release valproic acid softgel) |
Bipolar disorder, migraine, & epilepsy | Pre-clinical | 2010 |
| Mesafem™ (low-dose paroxetine mesylate) |
Vasomotor symptoms (hot flashes) | Entering Phase 3 | 2011 |
Financial Matters
The purchase price for the acquisition was $125
million cash paid at closing (August 14, 2007) plus the assumption
of approximately $10 million in net non-contingent liabilities. Noven
funded payment of the purchase price from cash and short-term investments.
As of June 30, 2007, Noven had approximately $187 million in cash,
cash equivalents and short-term investments. Noven received a $25
million sales milestone payment related to its Daytrana™ product
in August 2007.
As previously announced, Noven expects to record a one-time charge in the 2007 third quarter for purchased in-process research and development expenses related to the allocated purchase price of acquired products in the development pipeline. This charge is expected to significantly exceed 50% of the acquisition purchase price. In addition, Noven’s ongoing financial results will reflect the impact of significant amortization and other transaction-related expenses associated with the JDS acquisition.
New Board Member
Effective upon closing of the transaction, Phillip M.
Satow, JDS’s Chief Executive Officer and co-founder, was
appointed to Noven’s Board of Directors. After 15 years with Pfizer and
three years as Vice President and General Manager of the Carter Wallace
pharmaceutical business, Mr. Satow served as Executive Vice President
of Forest Laboratories and President of its Forest Pharmaceuticals subsidiary.
He established the marketing and sales departments at Forest, which he
led for 14 years through the launch of the highly-successful antidepressant
Celexa®. He co-founded JDS in August 2004 with his son, Michael Satow,
JDS’s President and Chief Operating Officer.
“As a member of the Noven Board of Directors, Phil will be in a position to help guide the combined company toward achievement of its expanded and ambitious goals. Few in the industry have Phil’s expertise and track record of success in the psychiatry category. We are thrilled to have him on the team as we work to build on the business and opportunities that he helped create.”
Transaction Advisors
Thomas Weisel Partners LLC served as financial advisor
to Noven in connection with the JDS acquisition, and Cravath,
Swaine & Moore
LLP served as Noven’s legal advisor. Piper Jaffray & Co. served as
financial advisor to JDS, and Latham & Watkins served as JDS’s legal
counsel.
About
Noven
Noven Pharmaceuticals, Inc., headquartered in Miami, Florida, has established
itself as a leading developer of advanced transdermal drug delivery technologies
and prescription transdermal products. Its commercialized transdermal
products include Vivelle-Dot®, the most prescribed estrogen patch in
the U.S., and Daytrana™, the first and only patch approved for the treatment
of ADHD. With the acquisition of JDS, Noven has become a broader-based
specialty pharmaceutical company with the infrastructure, products and
category expertise to market and sell products itself, and with a substantially
enhanced late-stage product pipeline. See www.noven.com for additional
information.
Trademark Information
Lithobid® and Pexeva® are registered trademarks,
and Stavzor™ and Mesafem™ are trademarks, of JDS Pharmaceuticals, LLC.
Celexa® is a registered trademark of Forest Laboratories, Inc. or its
affiliates. Vivelle-Dot® is a registered trademark of Novartis AG or
its affiliates. Daytrana™ is a trademark of Shire Pharmaceuticals Ireland
Limited.
Forward Looking Information
Except for historical information contained
herein, the matters discussed in this press release contain forward-looking
statements within the meaning of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934 that involve
substantial risks and uncertainties. Statements that are not historical
facts, including statements which are preceded by, followed by, or that
include, the words "believes," "anticipates," "plans," "expects" or
similar expressions and statements are forward-looking statements. Noven’s
estimated or anticipated future results, product performance or other
non-historical facts are forward-looking and reflect Noven’s current
perspective on existing trends and information. Actual results, performance
or achievements could differ materially from those contemplated, expressed
or implied by the forward-looking statements contained herein. These
forward-looking statements are based largely on the current expectations
of Noven and are subject to a number of risks and uncertainties that
are subject to change based on factors which are, in many instances,
beyond Noven's control. These risks and uncertainties include: the expected
benefits of the transaction, including expected revenue growth, may take
longer than anticipated to achieve and may not be achieved in their entirety
or at all; any costs or difficulties that Noven may encounter in the
process of integration of the organization and operations of the acquired
business into Noven’s existing organization and operations, including
the possibility that such integration may be delayed or more costly or
difficult than expected and may adversely affect Noven’s results of operations
and financial condition; the risk that the proposed transaction disrupts
current plans and operations and the potential difficulties in employee
retention as a result of the transaction; disruption from the transaction
making it more difficult for Noven to maintain its relationships with
its partners, customers, employees or suppliers; uncertainties as to
the future success of ongoing and planned clinical trials and the risk
that results from early-stage clinical trials may not be indicative of
results in later-stage trials; the unproven safety and efficacy of products
under development; the difficulty of predicting FDA approvals, including
timing, and that any expected period of exclusivity may not be realized;
the difficulty of predicting acceptance of and demand for new pharmaceutical
products; the impact of competitive products and pricing; risks relating
to new product development and launch, including the possibility that
any product launch may be delayed or that product acceptance may be less
than anticipated; the possibility that patent applications may not result
in issued patents, and that issued patents may not be enforceable or
could be invalidated; and the impact of competitive responses to Noven’s
sales, marketing and strategic efforts. For additional information regarding
these and other risks associated with Noven’s business, readers should
refer to Noven’s Annual Report on Form 10-K as well as other reports
filed from time to time with the Securities and Exchange Commission.
Unless required by law, Noven undertakes no obligation to publicly update
or revise any forward-looking statements, whether as a result of new
information, future events, or otherwise.
Contact:
Joseph C. Jones
Vice President – Corporate Affairs
305-253-1916
