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Monday October 19, 6:31 am Eastern Time
Company Press Release
DepoTech Announces Plans to be Acquired by
SkyePharma
SkyePharma Invests An Additional $5 Million and Forms Drug Delivery Collaboration
SAN DIEGO, Calif.--(BW HealthWire)--Oct. 19, 1998--DepoTech Corporation (Nasdaq:DEPO - news) today announced
that the company has reached preliminary agreement with SkyePharma PLC (Nasdaq:SKYEY - news; LSE:SKP) under
which SkyePharma will acquire all of DepoTech's outstanding shares in a stock-for-stock exchange. SkyePharma is a United
Kingdom- based drug delivery company. In addition, the two companies formed a strategic collaboration to develop drug
delivery technologies based on DepoTech's lipid-based drug delivery systems. In connection with this collaboration,
SkyePharma purchased approximately 2.9 million shares of DepoTech common stock for $5.0 million at a per share price of
$1.75. This represents a 40% premium to the closing price of DepoTech's common stock of $1.25 per share on October 16,
1998. Following this transaction, DepoTech has approximately 17.5 million shares of common stock outstanding.
''The combination of DepoTech and SkyePharma can potentially create a leader in the development of products utilizing novel
drug delivery technologies,'' said Fred A. Middleton, DepoTech's chairman of the board and chief executive officer. ''If this
transaction is completed, we believe the new company will enable our shareholders to fully realize the potential of DepoTech's
technology platform and share in the future growth of SkyePharma. One goal of the proposed acquisition is to make available
additional resources to fund our product pipeline.''
SkyePharma proposes to issue DepoTech shareholders up to $3.50 per share, equivalent to approximately 5.4 million of its
American Depository Shares (ADS's). The company's shareholders will initially receive $1.75 per share, equivalent to 2.7
million SkyePharma ADS's. For every ten shares of DepoTech common stock, the company's shareholders will receive
approximately 1.86 SkyePharma ADS's. Further, DepoTech shareholders will receive up to an additional $1.75 per share, or
approximately 2.7 million SkyePharma ADS's if certain performance milestones are met. The share exchange rate is based on
the average of the last sales price for SkyePharma ADS's reported on Nasdaq for the five days ended October 16, 1998, or
$9.43. If the contingent payments are made, the aggregate value of the acquisition will be approximately $51.1 million based on
a price of $9.43 per SkyePharma ADS, or a 280% premium over the price of DepoTech's common stock of $1.25 per share
on October 16, 1998.
The terms of the contingent payment provide that DepoTech shareholders will receive approximately 1.5 million additional
SkyePharma ADS's if DepoTech's lead product, DepoCyt(TM), an anticancer drug, is launched in the U.S. no later than
March 31, 2000. Further, DepoTech shareholders will receive approximately 1.2 million additional SkyePharma ADS's if a
development agreement is signed with a corporate partner for either DepoMorphine(TM) or a macromolecule program.
DepoMorphine, currently in Phase II clinical trials, is a sustained-release formulation of morphine sulfate being developed to
treat acute post-surgical pain.
The proposed acquisition remains subject to negotiation of definitive agreements, and may be subject to certain regulatory
approvals. The approval of DepoTech's shareholders is also required prior to completion of the proposed acquisition.
SkyePharma is a drug delivery company that develops and manufactures advanced drug delivery solutions. Its technologies
include oral controlled release and inhalation systems. Earlier this year, a New Drug Application was filed on its lead product,
Paxil/Seroxat, an anti-depressant drug, utilizing SkyePharma's oral controlled release technology. In addition, SkyePharma's
collaborative partners have four products in pivotal clinical trials. SkyePharma had revenues of $22.7 million for fiscal 1997.
Total assets at December 31, 1998 were $122.7 million. Based on an ADS price of $9.43, SkyePharma has a market
capitalization of approximately $377.2 million.
DepoTech is a drug delivery company dedicated to the development and manufacture of innovative, sustained-release
therapeutic products based on DepoFoam(TM) technology. Products are being developed to satisfy medical needs in cancer,
pain management and other fields.
This press release may contain forward-looking statements regarding DepoTech Corporation. Actual results could differ
materially from those described in this press release as a result of a number of factors, including, but not limited to the following:
Uncertainties involved in obtaining regulatory approval for DepoCyt or any of the company's potential products in the U.S. and
other markets, including timing of approval, if at all; and uncertainties involved in commercialization of DepoCyt or any of the
company's potential products; corporate partners' ability to terminate collaborative agreements regarding DepoCyt, and other
risks detailed from time to time in the company's filings with the Securities and Exchange Commission. In addition, the
completion of the proposed acquisition of DepoTech described in this press release and the terms of such acquisition are
subject to, among other things, further negotiation, regulatory approval, completion of documentation and due diligence and the
approval of shareholders of DepoTech. The company undertakes no obligation to revise or update these forward-looking
statements to reflect events or circumstances after the date of this release.
Additional written materials and recent releases regarding DepoTech are available on the World Wide Web at
depotech.com.
More information regarding SkyePharma can be found on the World Wide Web at skyepharma.com
Note to Editors: DepoFoam and DepoMorphine are trademarks of DepoTech Corporation.
Contact:
DepoTech Corporation, San Diego
Fred A. Middleton, 650/854-9855
John P. Longenecker, Ph.D., 619/625-2424
or
SkyePharma PLC
Ian Gowrie-Smith, 0171-491-1777
More Quotes
and News:
Depotech Corp (Nasdaq:DEPO - news)
Skyepharma PLC (Nasdaq:SKYEY - news)
Related News Categories: biotech, medical/pharmaceutical
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