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 (http://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.
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Related links:
http://www.frx.com
Photo Notes:http://www.newscom.com/cgi-bin/prnh/20001011/FORESTLOGO
CONTACT:
Charles E. Triano, Vice President - Investor
Relations of Forest Laboratories, Inc., +1-212-224-6714,
Charles.Triano@frx.com
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