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|December 02, 1999 10:37 a.m.|
|Teva Pharmaceutical Industries Ltd. signs letter of intent to acquire Novopharm Limited|
| December 2, 1999, Petach Tikva, Israel. Teva Pharmaceutical Industries Ltd. -announced today that it has entered into a letter of intent to acquire Novopharm Ltd. from Dan Family Holdings Ltd. Teva had previously announced in mid-October that the parties were in advanced discussions regarding a transaction. The consideration for the contemplated transaction would consist of approximately 4.8 million ordinary shares of Teva, which would represent approximately 7% of Teva's outstanding share capital on a fully diluted basis. Novopharm, a privately held Canadian corporation, is one of the leading generic companies in Canada. |
Approximately two-thirds of the shares issued to Dan Family Holdings would take the form of non-voting exchangeable shares in a newly formed wholly-owned Canadian subsidiary of Teva. These exchangeable shares would be exchangeable by Dan Family Holdings at any time, in whole or in part, into ordinary shares of Teva. The balance of the consideration would be issued directly as Teva ordinary shares.
The parties intend that the acquisition would not include Novopharm Biotech Ltd., a publicly traded Canadian biotechnology company. Novopharm's majority interest in this company would be spun off to Dan Family Holdings prior to the closing of the transaction. It is also anticipated that Novopharm would have consummated the sale of its over-the-counter (OTC) businesses prior to its acquisition by Teva.
Novopharm had sales, excluding the businesses of Novopharm that have been or are being divested, of approximately Can. $562 million (U.S. $383 million) for the fiscal year ended December 31, 1998 and approximately Can $436 million (U.S. $ 298 million) in the nine months ended September 30, 1999. The principal countries within which Novopharm operates are Canada, which would represent an important new market for Teva, the United States and Hungary. Novopharm's estimated market share in generic prescription pharmaceutical sales in Canada reached 21% in 1998.
The execution of definitive binding agreements is conditioned upon the resolution to Teva's satisfaction of certain issues now pending before a Canadian court relating to the scope and duration of an existing injunction against Novopharm. Although no precise date can be predicted, the parties are hopeful that a court decision will be rendered within the next few months.
Assuming satisfactory resolution of the pending court issues and the execution of definitive documentation, compliance with regulations of the Tel Aviv Stock Exchange and Israeli law would require that the transaction be submitted to Teva's shareholders for their approval. Detailed information regarding the transaction, the business of Novopharm and its financial statements would be prepared and circulated to the shareholders of Teva in connection with a special meeting of shareholders which would be convened to approve the transaction and the issuance of Teva shares. The transaction would also be subject to receipt of regulatory approvals in Canada, the United States and Israel.
Mr. Eli Hurvitz, Chief Executive Officer of Teva, stated, "We are very close to being in a position to execute definitive documentation, but given an uncertain period of delay, we thought it appropriate to indicate our mutual intentions to one another and to the public. Novopharm has a long and well-established history in Canada, and we would be pleased to bring our two companies together. This acquisition would increase the scope of Teva's activities in North America and strengthen Teva's stature as one of the leading generic companies worldwide. Novopharm would make a positive contribution to our sales and profits and we believe that this transaction would be accretive to our results already in the first year following the acquisition."
The letter of intent is not a binding obligation under Canadian law, and no assurance can be given that definitive documentation will be executed or, that once documentation is executed, the transaction will be consummated.
Teva Pharmaceutical Industries Ltd. is Israel's largest pharmaceutical company, with 80% of its sales outside Israel, mainly in the United States. The Company develops, manufactures, and markets generic and branded human pharmaceuticals, active pharmaceutical ingredients, medical disposables and veterinary products.
Safe Harbor Statement: This release contains-forward looking statements which express the beliefs and expectations of management. Such statements are based on current expectations and involve a number of known and unknown risks and uncertainties that could cause the Company's future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause or contribute to such differences include the impact of pharmaceutical industry regulation, the difficulty of predicting FDA and other regulatory authority approvals, the regulatory environment and changes in the health policies and structure of various countries, acceptance and demand for new pharmaceutical products and new therapies, the impact of competitive products and pricing, the availability and pricing of ingredients used in the manufacture of pharmaceutical products, uncertainties regarding market acceptance of innovative products newly launched, currently being sold or in development, the impact of restructuring of clients, reliance on strategic alliances, fluctuations in currency, exchange and interest rates, operating results, the impact of the year 2000 issue and other factors that are discussed in the Company's Annual Report on Form 20-F and the Company's other filings with the U.S. Securities and Exchange Commission