Cornerstone Therapeutics Announces $70 Million Strategic Transaction With Chiesi Farmaceutici SpA
On Thursday May 7, 2009, 7:01 am EDT
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- CORNERSTONE GAINS EXCLUSIVE 10-YEAR LICENSE FOR U.S. COMMERCIAL RIGHTS TO MARKETED RESPIRATORY DRUG, CUROSURF®, AND RECEIVES CASH PROCEEDS OF $15.5 MILLION
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{"s" : "crtx","k" : "c10,l10,p20,t10","o" : "","j" : ""} - CORNERSTONE RECEIVES FIRST RIGHT OF OFFER ON ALL CHIESI DRUGS INTENDED TO BE COMMERCIALIZED IN THE U.S.
CARY, N.C., May 7 /PRNewswire-FirstCall/ -- Cornerstone Therapeutics Inc. (Nasdaq CM: CRTX), a specialty pharmaceutical company focused on acquiring, developing and commercializing prescription medications primarily for respiratory indications, today announced a strategic transaction with Chiesi Farmaceutici SpA, a leading European pharmaceutical company headquartered in Parma, Italy, valued at $70 million, based on the 10-day average closing share price of Cornerstone. Under the terms of the agreement, Cornerstone will issue 11.9 million shares of common stock and receive an exclusive 10-year license with renewable rights for the U.S. commercial rights to Chiesi's Curosurf® product, the world leading treatment approved by the U.S. Food and Drug Administration (FDA) for Respiratory Distress Syndrome (RDS) in premature infants, and $15.5 million in cash. Cornerstone will also receive first right of offer on all new products and technology Chiesi intends to market in the U.S.
This transaction enables Cornerstone to:
Further diversify its revenue base by adding an FDA approved marketed product, Curosurf, with a leading market position and a proprietary manufacturing process;
Broaden its respiratory therapeutic reach and customer base;
Strengthen the Company's balance sheet; enabling Cornerstone to accelerate the development of its existing product pipeline, evaluate additional opportunities to enhance its product portfolio and support further growth in its sales force to expand reach; and
Establish a long-term relationship with a leading European pharmaceutical company with the first right of offer on all products Chiesi intends to commercialize in the U.S.
As part of the transaction, Craig Collard, Cornerstone's President and CEO, and Steven Lutz, Cornerstone's Executive Vice President, Manufacturing and Trade, have agreed to sell an aggregate of 1.6 million shares to Chiesi at $5.50 per share. The combined number of common shares held by Chiesi, after giving effect to the purchase of the 1.6 million common shares and the issuance of approximately 11.9 million common shares, will be approximately 13.5 million shares, or approximately 51 percent of Cornerstone's fully diluted common shares outstanding.
Curosurf, which is a natural lung surfactant, is currently available in over 50 countries, including the U.S. and most of Europe, and has been administered to approximately 1,000,000 infants since 1992. In the U.S., Curosurf is indicated for the treatment of RDS in premature infants. RDS is one of the most common lung disorders in premature babies. It affects about 10 of every 100 premature infants in the U.S., or about 40,000 babies, each year. RDS can lead to serious complications and is one of the most common causes of neonatal mortality. For 2008, Curosurf's U.S. net sales were over $30 million. The drug currently maintains 44 percent market share in the U.S., more than 80 percent market share in Europe and 59 percent market share worldwide.
"We believe this is a truly transformative transaction for Cornerstone, providing us with a market leading proprietary respiratory product, significant capital and access to future products in our core therapeutic area at our discretion," said Mr. Collard. "Curosurf is an excellent product with a world leading market position, strong brand recognition, a proprietary manufacturing process, and solid growth potential. Adding $15.5 million to our balance sheet supports the continuing development of our existing product pipeline and will allow us to grow our sales organization to better position us for growth with our current and future products. We will also be in a good position to evaluate and execute on opportunities to acquire or in-license other high-quality respiratory drugs. This agreement provides us with the opportunity to work closely with Chiesi, one of Europe's most highly-respected and successful pharmaceutical companies, and achieves our stated goal of making a significant product acquisition in 2009 and increasing our penetration in the respiratory market."
"Our investment in Cornerstone demonstrates our confidence in their ability to continue growing their business in an efficient and strategic manner," said Alberto Chiesi, Chiesi's President & CEO. "Moreover, as the respiratory therapeutic space represents approximately 46 percent of our business, we are pleased to establish a relationship with a company with the good respiratory expertise that Cornerstone possesses. We believe this agreement has the potential to meaningfully increase our footprint in the U.S., the world's largest pharmaceutical market."
The closing of the transaction is subject to the approval of Cornerstone's stockholders, receipt of regulatory approvals and other customary closing conditions. The parties anticipate that the stockholders' meeting will be held in the third quarter of 2009. The board of directors of each company has approved the agreements. Houlihan Lokey served as financial advisor to Cornerstone, and Clifford Chance US LLP provided legal counsel to Cornerstone. Morgan, Lewis & Bockius LLP provided legal counsel to Chiesi.
Cornerstone will provide further details on this transaction during today's previously scheduled earnings conference call, which will begin at 8:30 AM ET. To participate in the live conference call, please dial 866-783-2137 (U.S. callers) or 857-350-1596 (international), and provide passcode 84050385. A live webcast of the call will also be available through the Investor Relations section of the Company's Web site. Please allow extra time prior to the webcast to register, download and install any necessary audio software.
The webcast will be archived for 30 days, and a telephone replay of the call will be available for seven days, beginning today at 11:30 AM ET at 888-286-8010 (U.S. callers) or 617-801-6888 (international), and provide passcode 21539068. |
