SAN DIEGO, March 20 /PRNewswire/ -- Dura Pharmaceuticals, Inc. (Dura)
(Nasdaq: DURA) and Spiros Development Corporation II, Inc. (SDCII)
(Nasdaq: SDCO) today announced that they have entered into a definitive merger
agreement for Dura to acquire SDCII. The merger agreement is subject to
approval at a special meeting of the SDCII stockholders. A special committee
of independent members of the SDCII board, formed in December 1999 to evaluate
strategic alternatives for SDCII, has approved the merger agreement and is
recommending that the SDCII stockholders approve the merger.
Under the merger agreement, for each share of SDCII callable common stock
SDCII stockholders will receive $13.25 in cash and one five-year warrant to
purchase a fractional share of Dura common stock at $17.94 per share, which
represents a 25% premium over the average closing price of Dura common stock
for the ten trading days prior to today. The exact fraction of a share of
Dura common stock purchasable under the warrant will be determined based on
the average closing price of Dura common stock for the ten trading days prior
to stockholder vote on the merger and will result in a calculated
Black-Scholes value for each warrant of between $3.22 and $1.81. The total
consideration for the merger agreement as of today is approximately
$100.8 million, or $15.75 per share of SDCII callable common stock. The Dura
warrants will be the subject of a registration statement to be filed with the
Securities and Exchange Commission. Closing of the transaction is subject to
Hart-Scott-Rodino clearance, effectiveness of the registration statement, and
SDCII stockholder approval. Dura has received voting agreements in favor of
the merger from holders of approximately 22% of SDCII's outstanding callable
common stock.
"We are very pleased to have successfully negotiated with SDCII's special
committee of independent directors to reach a definitive merger agreement,"
said Cam L. Garner, Dura's Chairman and Chief Executive Officer. "The
acquisition of SDCII will bring clarity to both Dura's operating results and
product pipeline. The consolidation of SDCII into Dura will eliminate the
future after-tax earnings impact of contract revenue received from SDCII. We
believe the acquisition of SDCII will enhance Dura stockholder value for the
long-term."
"Importantly, our agreement to acquire SDCII underscores our confidence in
the Spiros(R) technology platform," continued Mr. Garner. "On behalf of
SDCII, we have developed a high-quality inhalation system for Beclomethasone
Spiros(TM) and Budesonide Spiros(TM), two steroid drug products currently in
development for the treatment of the underlying inflammatory condition
associated with asthma. Upon the successful acquisition of SDCII, Dura will
own exclusive rights to Beclomethasone Spiros(TM) and Budesonide Spiros(TM).
These products should add significantly to Dura's pharmaceutical revenues
beginning in the 2002 to 2003 timeframe, subject to approval by the U.S. Food
and Drug Administration."
"We are pleased to announce the merger agreement with Dura under terms
that represent significant premiums to the recent trading prices for SDCII's
callable common stock and SDCII's available cash per share," said William H.
Rastetter, Ph. D., Chairman of the special committee of independent members of
the SDCII board. "In evaluating the strategic alternatives available to
SDCII, the special committee concluded that the announced merger with Dura is
in the best interest of SDCII stockholders. Therefore the special committee
is recommending approval of the merger with Dura to the SDCII stockholders."
Dura Pharmaceuticals, Inc. is a San Diego based developer and marketer of
prescription pharmaceutical products for the treatment of respiratory
conditions and infectious diseases. Dura executes its business strategy by
(1) acquiring currently-marketed or late-stage development products, and
companies developing or marketing such pharmaceuticals, to support its
presence in high-prescribing physicians' offices and the hospital market, and
(2) developing Spiros(R), a pulmonary drug delivery system for both topical
and systemic delivery of medications.
Spiros Development Corporation II, Inc. is a public company formed
primarily for the continued development of Spiros(R), a proprietary pulmonary
drug delivery system, for selected respiratory compounds.
Except for the historical and factual information contained herein, the
matters discussed in this press release may contain forward-looking statements
which involve risks and uncertainties, including the completion of the
acquisition of SDCII, if at all, the uncertainty regarding the calculated
value of the Dura warrant to be issued in connection with the merger of SDCII,
the timely initiation and successful completion of the clinical trial programs
for the Spiros(R) products, the ability to obtain adequate funding to complete
the clinical trial programs for the Spiros(R) products, the timely FDA
approval of the Spiros(R) products, if at all, the dependence on third parties
for manufacturing and development, the competitiveness of the pharmaceutical
industry and other risks detailed from time to time in Dura's and SDCII's
filings with the Securities and Exchange Commission. Actual results may
differ materially from those projected. Any forward-looking statements
represent Dura's and SDCII's judgment as of the date of this release. Each of
Dura and SDCII disclaim, however, any intent or obligation to update these
forward-looking statements. Further information about Dura Pharmaceuticals,
Inc. can be found at http://www.durapharm.com.
News releases from Dura Pharmaceuticals are available at no charge on
Dura's web site at http://www.durapharm.com and through PR Newswire's On-Call fax
service by calling (800) 758-5804, extension 197051.
SOURCE Dura Pharmaceuticals, Inc.
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Related links:
http://www.durapharm.com
Company News On-Call:
http://www.prnewswire.com/comp/197051.html or fax,
800-758-5804, ext. 197051
CONTACT:
Michael T. Borer, Senior Vice President and
Chief Financial Officer of Dura Pharmaceuticals, Inc.,
858-457-2553; or William H. Rastetter, Ph.D., Chairman of the
Special Committee of the Board of Directors of Spiros Development
Corporation II, Inc., 858-431-8637
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