NEW YORK, Dec. 14 /PRNewswire-FirstCall/ -- Forest Laboratories, Inc.
(NYSE: FRX) today announced that it has signed a definitive merger agreement
to acquire Cerexa, Inc., a privately held biopharmaceutical company based in
Alameda, California, in a cash transaction. Under the terms of the agreement,
Forest will acquire Cerexa for a total of $480 million.
(Logo: http://www.newscom.com/cgi-bin/prnh/20001011/FORESTLOGO )
Pursuant to the acquisition of Cerexa, Forest will obtain worldwide
development and marketing rights (excluding Japan) to two injectable
antibiotics and an option to a third, early stage injectable antibiotic. The
lead compound, ceftaroline acetate, which is entering Phase III studies, is a
next generation, broad-spectrum, hospital-based cephalosporin antibiotic that
exhibits bactericidal activity against the most resistant strains of Gram-
positive bacteria, including MRSA (methicillin resistant Staphylococcus
aureus) as demonstrated in a completed Phase II comparative trial in patients
with complicated skin and skin structure infections (cSSSI). Ceftaroline has
also demonstrated bactericidal activity against penicillin-resistant
Streptococcus pneumoniae (PRSP) and common gram-negative bacteria.
Ceftaroline is being developed for initial indications of cSSSI and community
acquired pneumonia (CAP).
Phase III studies for cSSSI are planned to begin in the first quarter of
calendar 2007 while the CAP Phase III program is scheduled to begin in the
second quarter of calendar 2007. In March 2006 the U.S. Food and Drug
Administration (FDA) granted ceftaroline Fast Track designation for the
treatment of cSSSI caused by MRSA. In granting this designation, the FDA noted
that ceftaroline has the potential to address an unmet medical need due to its
potential ability to benefit patients who are unresponsive to existing
therapies or who are unable to tolerate existing therapies due to serious
toxicities that are present in such therapies. If the Phase III studies are
successful and Forest receives FDA marketing approval, Forest plans to launch
ceftaroline with these two initial, cSSSI and CAP indications in the 2010 or
2011 timeframe. Additional indications will also be pursued under future
supplemental filings.
As a hospital-based product Forest would detail the product utilizing its
existing hospital based salesforce, a subset of the Company's total
salesforce. Forest will also explore options for commercialization outside
the U.S. (excluding Japan) including but not limited to out-licensing
marketing rights or acquiring a non-U.S. hospital-based salesforce.
The second product, ME1036, a broad-spectrum parenteral carbapenem, is
currently in preclinical development and has demonstrated excellent
preclinical activity against both aerobic and anaerobic Gram-positive and
Gram-negative bacteria, including common drug-resistant pathogens. Unlike
carbapenems that are available today, ME1036 is highly active against MRSA,
PRSP, vancomycin-intermediate susceptible Staphylococcus aureus (VISA) and
vancomycin-resistant Enterococcus faecalis (VRE). For this product, Forest's
marketing rights do not include Japan and certain other Asian countries.
An issued composition of matter patent covering ceftaroline expires in
December 2018 and an extension of the patent term is expected under the Hatch
Waxman legislation. There are several filed patent applications covering
ME1036.
The U.S. market for injectable antibiotics is currently estimated to be
between $5 billion and $7 billion using branded pricing for all products.
Worldwide, the market is estimated to be over $9 billion.
The cash-for-stock transaction is valued at approximately $494 million,
which includes related transaction costs and Forest's payment of certain of
Cerexa's transactions fees, and is expected to close in Forest's fiscal fourth
quarter following the expiration of the Hart-Scott-Rodino antitrust waiting
period. Upon closing, Forest expects to incur a one-time after-tax charge of
approximately $0.96 per share, as substantially all of the purchase price will
be expensed as in-process research and development. Excluding the one-time
after-tax charge the Company reaffirms its Fiscal 2007 earnings per share
guidance of $2.60-$2.65 originally issued on October 17, 2006. In addition,
Forest has committed to make a future additional one-time payment of $100
million if U.S product sales of ceftaroline during any twelve-month period
within the first five years following the product launch exceed $500 million.
"Ceftaroline is an important late stage development product that can
address serious and life-threatening infections in the hospital setting
including MRSA. This is a significant medical benefit given the increasing
prevalence of MRSA, which commonly causes severe "staph" infections such as
skin infections that are resistant to treatment with most antibiotics, and the
current limitations of presently available treatment options. We have a high
degree of confidence in the successful commercialization and financial
prospects for ceftaroline given the strength of the existing clinical data and
the clinical need for a next generation hospital based antibiotic," commented
Howard Solomon, Chairman and CEO of Forest. Mr. Solomon continued: "We are,
of course, also aware of the need to replace earnings from key marketed
products following their patent expirations in the next decade and will
continue to review additional in-licensing and co-promotion opportunities as
well other strategic acquisitions. Our ongoing business development efforts
will continue to assess both near-term and longer-term commercial
opportunities which will serve to increase shareholder visibility into long-
term earnings growth prospects for Forest."
Dennis Podleask, Cerexa's Chief Executive Officer, added: "We received
significant interest in Cerexa from multiple parties and are delighted to be
entering into this transaction with Forest, who will be assuming
responsibility for the development and future commercialization of
ceftaroline. Forest has a proven track record of success in developing and
commercializing products, as evidenced by the success of the Lexapro(R) /
Celexa(R) franchise, and we have great confidence in their ability to optimize
the therapeutic and commercial potential of the Cerexa portfolio."
About Ceftaroline
Ceftaroline acetate is a member of the cephalosporin class of antibiotics,
the most frequently prescribed class of antibiotics in the world. In
preclinical studies and clinical trials to date, ceftaroline demonstrated a
favorable safety profile, similar to that of existing cephalosporins. Unlike
marketed cephalosporins, ceftaroline exhibits bactericidal activity against
the most resistant strains of Gram-positive bacteria, including MRSA.
Ceftaroline has also demonstrated bactericidal activity against penicillin-
resistant Streptococcus pneumoniae and common Gram-negative bacteria. Cerexa
licensed from Takeda Pharmaceutical Company Limited the exclusive right to
develop and commercialize ceftaroline in all countries worldwide except Japan.
In a Phase II randomized, observer-blinded, multi-center trial of 99
treated patients with local and systemic signs of cSSSI randomized in a 2:1
ratio to receive ceftaroline or a vancomycin based regimen, the clinical cure
rate in the clinically evaluable population was 96.7% for patients treated
with ceftaroline and 88.9% for those treated with the gold-standard comparator
regimen of vancomycin, with or without adjunctive aztreonam. The
microbiological response rate in the microbiologically evaluable population
was 95.2% for the ceftaroline group and 85.7% for the standard therapy group.
Ceftaroline also demonstrated excellent in vitro activity against Gram-
positive and Gram-negative organisms isolated from patients in the study,
including 100% of methicillin-resistant Staphylococcus aureus (MRSA) isolates
inhibited at 0.5 mg/L or less.
In the Phase 2 trial, no drug-related serious adverse events were observed
for ceftaroline. In both the Phase 2 trial and earlier Phase 1 trials,
ceftaroline displayed a favorable adverse event profile consistent with the
established safety profile of the cephalosporin class, with the vast majority
of side effects being mild in nature.
About Forest Laboratories and Its Products
Forest Laboratories (www.frx.com) is a US-based pharmaceutical company
dedicated to identifying, developing, and delivering products that make a
positive difference in peoples' lives. Forest Laboratories' growing product
line includes Lexapro(R) (escitalopram oxalate), an SSRI indicated for adults
for the internal and maintenance treatment of major depressive disorder and
generalized anxiety disorder; Namenda(R) (memantine HCl), an N-methyl D-
aspartate (NMDA)-receptor antagonist indicated for the treatment of moderate
to severe Alzheimer's disease; Benicar(R)* (olmesartan medoxomil), an
angiotensin receptor blocker, and Benicar* HCT(R) (olmesartan medoxomil-
hydrochlorothiazide), an angiotensin receptor blocker and diuretic combination
product, each indicated for the treatment of hypertension; and Campral(R)*
(acamprosate calcium), indicated in combination with psychosocial support for
the maintenance of abstinence from alcohol in patients with alcohol dependence
who are abstinent at treatment initiation.
*Benicar is a registered trademark of Daiichi Sankyo, Inc., and Campral is
a registered trademark of Merck Sante s.a.s., subsidiary of Merck KGaA,
Darmstadt, Germany.
Except for the historical information contained herein, this release
contains "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements involve a number of
risks and uncertainties, including the difficulty of predicting FDA approvals,
the acceptance and demand for new pharmaceutical products, the impact of
competitive products and pricing, the timely development and launch of new
products, and the risk factors listed from time to time in the Forest
Laboratories' SEC reports, including the Company's Annual Report on Form 10-K
for the fiscal year ended March 31, 2006 and on Form 10-Q for the periods
ended June 30 and September 30, 2006.
SOURCE Forest Laboratories, Inc.
CONTACT: Charles E. Triano, Vice President - Investor Relations of
Forest Laboratories, Inc., 1-212-224-6714, Charles.Triano@frx.com
Photo: http://www.newscom.com/cgi-bin/prnh/20001011/FORESTLOGO
Web site: http://www.frx.com
(FRX)