Expected to strengthen Teva's core CNS franchise, establish Teva’s
leadership in underserved movement disorders space, provide compelling
new treatment options for patients in need, and enhance Teva’s long-term
revenue and earnings growth
All-Cash Transaction with Enterprise Value of $3.2 Billion
JERUSALEM & LA JOLLA, Calif.--(BUSINESS WIRE)--Mar. 30, 2015--
Teva Pharmaceutical Industries Ltd. (NYSE and TASE:TEVA) and Auspex
Pharmaceuticals, Inc. (Nasdaq:ASPX), today announced that they have
entered into a definitive merger agreement under which Teva will
commence a tender offer for all of the outstanding shares of Auspex at
$101.00 per share in cash, representing total consideration of
approximately $3.2 billion in enterprise value and approximately $3.5
billion in equity value. This transaction is expected to enhance Teva’s
revenue and earnings growth profile and strengthen its core central
nervous system (CNS) franchise with the addition of Auspex’s portfolio
of innovative medicines for people who live with movement disorders. The
transaction has been unanimously approved by the Boards of Directors of
both Teva and Auspex, and key shareholders of Auspex have entered into
agreements indicating their support for the transaction.
Auspex is an innovative biopharmaceutical company specializing in
applying deuterium chemistry to known molecules to create novel
therapies with improved safety and efficacy profiles. Its lead
investigational product, SD-809 (deutetrabenazine), which leverages
Auspex’s deuterium technology platform is being developed for the
potential treatment of chorea associated with Huntington’s disease,
tardive dyskinesia, and Tourette syndrome, with a pharmacokinetic
profile that allows for lower doses resulting in a favorable safety
profile.
In 2014, Auspex reported positive results from its Phase 3 clinical
trial for SD-809 in Huntington’s disease, with plans to submit a New
Drug Application (NDA) for this indication by mid-2015. SD-809 has been
granted orphan drug designation for the treatment of Huntington's
disease by the United States Food and Drug Administration (FDA), and
Auspex expects regulatory approval and commercial launch for this
indication in 2016 in the United States. Topline results for Auspex’s
Phase 3 ARM-TD study of SD-809 as a potential treatment for tardive
dyskinesia, a disorder for which there are no approved therapies, are
also expected in mid-2015. Other pipeline candidates include deuterated
versions of pirfenidone for idiopathic pulmonary fibrosis and levodopa
for Parkinson’s disease. Auspex has an additional 60 molecules in its
patent portfolio.
Transaction Highlights
-
Excellent strategic fit – strengthens Teva’s leadership position
within CNS and expands presence into underserved movement disorder
markets
-
Teva’s existing capabilities and infrastructure in CNS are expected to
accelerate the potential for SD-809 and Auspex's additional pipeline
assets
-
Near-term value creation – SD-809 for Huntington’s disease is expected
to be approved and launched commercially in 2016
-
Deep pipeline and proven deuterium chemistry technology supports
multiple platforms for growth
-
SD-809 is currently in Phase 3 for tardive dyskinesia and Phase 1
for Tourette syndrome
-
SD-560 (deuterated pirfenidone) is currently in development for
idiopathic pulmonary fibrosis
-
Additional candidates identified for deuterium chemistry platform
that are aligned with Teva’s strategy
-
Enhances Teva’s mid to long-term revenue and earnings growth,
profitability, and product diversity - expected to be accretive to
non-GAAP EPS beginning in 2017 and meaningfully accretive thereafter,
and diversifies Teva’s Specialty medicines product mix
"The acquisition of Auspex is a significant step in strengthening Teva’s
leadership position in CNS and advances us into underserved movement
disorder markets. We look forward to accelerating the development and
commercialization of the Auspex portfolio based on our infrastructure,
capabilities and strong commercial and R&D position in CNS. As we have
outlined recently, one of our key priorities for 2015 is to support
Teva’s mid to long-term growth and create value for our shareholders
with business development opportunities that are closely aligned with
our core therapeutic areas. This transaction represents a first major
step with regards to that commitment and we expect to continue this
focus in the future,” said Erez Vigodman, President and CEO of Teva.
“We believe that the application of Auspex’s deuterium platform to known
pharmaceuticals holds great promise across a wide spectrum of
neurological diseases and associated movement disorders, including
Huntington’s disease, tardive dyskinesia and Tourette syndrome. Auspex’s
lead candidate, SD-809, offers compelling efficacy and safety benefits
to patients, as demonstrated by the impressive Phase 3 topline data in
Huntington’s disease announced in December 2014,” said Michael Hayden,
MD, PhD, Teva’s President of Global R&D and Chief Scientific Officer.
“Teva is well positioned to realize the robust IP potential of these
investigational products with Auspex’s deuterated technology which could
represent a significant breakthrough for patients who often have no
sustainable symptom relief from their disease.”
“Teva has established itself as a global leader in CNS diseases,
characterized by strong management and commercial execution," said
Pratik Shah, Ph.D., President and CEO of Auspex. "Importantly, the Teva
organization has a commitment to patients that matches our own in
developing and commercializing treatments for patients who suffer from
movement disorders. This transaction will enhance Auspex’s mission by
bringing innovative therapies to patients across the world as quickly
and efficiently as possible. The transaction also marks a great outcome
for Auspex shareholders and stakeholders as it not only validates our
portfolio of drug candidates while delivering significant financial
return, but it also puts our programs into the hands of a company that
has the experience and commitment to deliver our pipeline of therapies
to patients in need.”
Financial Benefit to Teva
The acquisition of Auspex is expected to generate value and enhance
Teva’s mid to long-term revenue and earnings growth profile. Teva
expects the transaction to begin contributing to revenues in 2016 with
the anticipated launch of SD-809 for Huntington’s disease and to be
accretive to non-GAAP EPS beginning in 2017 with minimal dilution to
non-GAAP EPS in the second half of 2015 and 2016. The transaction is
expected to be funded with cash on hand and is not subject to any
financing contingencies.
Closing
Under the terms of the merger agreement, an affiliate of Teva will
promptly commence a tender offer to acquire all of the outstanding
shares of Auspex’s common stock for $101 per share in cash. Following
the successful completion of the tender offer, Teva will acquire all
remaining shares not tendered in the tender offer through a second-step
merger at the same price as to be paid to stockholders tendering their
shares in the tender offer. The tender offer and withdrawal rights are
expected to expire at 12:01 a.m., New York City time on the 21st
business day after the launch of the tender offer, unless extended in
accordance with the merger agreement and the applicable rules and
regulations of the Securities and Exchange Commission.
The consummation of the tender offer is subject to various conditions,
including a minimum tender of a majority of outstanding Auspex shares,
the expiration or termination of any applicable waiting periods under
applicable competition laws, and other customary conditions. Pending
such closing conditions, Teva expects the transaction will close in
mid-2015.
Goldman, Sachs & Co. is acting as the exclusive financial advisor to
Teva and Goodwin Procter LLP is serving as legal counsel to Teva. J.P.
Morgan Securities LLC is acting as the exclusive financial advisor to
Auspex and Cooley LLP is serving as legal counsel to Auspex.
Live Conference Call for Investors:
A conference call and a live webcast with slides will be hosted on
Monday, March 30, 2015 at 8:30 AM EST to discuss the transaction. To
access the live webcast, including the slide presentation, please go to
the Investor Relations page of Teva’s website, ir.tevapharm.com, at
least 15 minutes before the start of the event to register and download
or install any necessary software. The number to call from within the
U.S. is 1 (888) 771-4371, conference ID 39358445. From international
locations, the conference call can be accessed at 1 (847) 585-4405 using
the same conference ID. A replay of the conference call will also be
available by calling 1 (888) 843-7419 in the U.S. or 1 (630) 652-3042
outside of the U.S., conference ID 3935 8445#.
About Teva
Teva Pharmaceutical Industries Ltd. (NYSE and TASE: TEVA) is a leading
global pharmaceutical company that delivers high-quality,
patient-centric healthcare solutions to millions of patients every day.
Headquartered in Israel, Teva is the world’s largest generic medicines
producer, leveraging its portfolio of more than 1,000 molecules to
produce a wide range of generic products in nearly every therapeutic
area. In specialty medicines, Teva has a world-leading position in
innovative treatments for disorders of the central nervous system,
including pain, as well as a strong portfolio of respiratory products.
Teva integrates its generics and specialty capabilities in its global
research and development division to create new ways of addressing unmet
patient needs by combining drug development capabilities with devices,
services and technologies. Teva's net revenues in 2014 amounted to $20.3
billion. For more information, visit www.tevapharm.com.
About Auspex Pharmaceuticals
Auspex Pharmaceuticals is a late-clinical stage biopharmaceutical
company dedicated to developing innovative medicines for hyperkinetic
movement disorders and other rare diseases. Auspex employs its
proprietary technology to create patent-protected, new chemical entities
from known, clinically proven therapies. The company's lead product,
SD-809 (deutetrabenazine), is in final stages of development for the
treatment of chorea associated with Huntington's disease, a
neurodegenerative movement disorder that impacts cognition, behavior and
movements. In addition, Auspex is investing in the broad potential of
SD-809 for the treatment of other movement disorders, including tardive
dyskinesia and tics associated with Tourette’s syndrome. The company's
pipeline also includes SD-560, being developed for fibrotic conditions,
and SD-1077, which is being developed for Parkinson's disease. For
further information, please visit the company's website www.auspexpharma.com.
Teva's Safe Harbor Statement under the U. S. Private Securities
Litigation Reform Act of 1995:
This release contains forward-looking statements, which are based on
management’s current beliefs and expectations and involve a number of
known and unknown risks and uncertainties that could cause our future
results, performance or achievements to differ significantly from the
results, performance or achievements expressed or implied by such
forward-looking statements. All statements, other than statements of
historical fact, are statements that could be deemed forward-looking
statements, including statements about the planned acquisition of
Auspex, the expected financial impact and benefits to Teva of such
acquisition, and anticipated milestones and other expectations regarding
Auspex’s product development activities and clinical trials. Important
factors that could cause or contribute to such differences include risks
relating to: the possibility that the transaction with Auspex
will not be completed, including due to the failure to obtain the
minimum tender condition; uncertainties as to the timing of the
transaction; the possibility that the expected benefits of the
transaction will not be fully realized by us or may take longer to
realize than expected; future results of on-going or later clinical
trials for Auspex’s product candidates, including SD-809; our ability to
obtain regulatory approvals and commercialize Auspex’s product
candidates following the closing and market acceptance of such products;
our ability to develop and commercialize additional pharmaceutical
products; competition for our innovative products, especially Copaxone®
(including competition from orally-administered alternatives, as well as
from potential purported generic equivalents) and our ability to
migrate users to our 40 mg/mL version; the possibility of material
fines, penalties and other sanctions and other adverse consequences
arising out of our ongoing FCPA investigations and related matters; our
ability to achieve expected results from the research and development
efforts invested in our pipeline of specialty and other products; our
ability to reduce operating expenses to the extent and during the
timeframe intended by our cost reduction program; our ability to
identify and successfully bid for suitable acquisition targets or
licensing opportunities, or to consummate and integrate acquisitions;
the extent to which any manufacturing or quality control problems damage
our reputation for quality production and require costly remediation;
increased government scrutiny in both the U.S. and Europe of our patent
settlement agreements; our exposure to currency fluctuations and
restrictions as well as credit risks; the effectiveness of our patents,
confidentiality agreements and other measures to protect the
intellectual property rights of our specialty medicines; the effects of
reforms in healthcare regulation and pharmaceutical pricing,
reimbursement and coverage; governmental investigations into sales and
marketing practices, particularly for our specialty pharmaceutical
products; adverse effects of political or economic instability, major
hostilities or acts of terrorism on our significant worldwide
operations; interruptions in our supply chain or problems with internal
or third-party information technology systems that adversely affect our
complex manufacturing processes; significant disruptions of our
information technology systems or breaches of our data security;
competition for our generic products, both from other pharmaceutical
companies and as a result of increased governmental pricing pressures;
competition for our specialty pharmaceutical businesses from companies
with greater resources and capabilities; the impact of continuing
consolidation of our distributors and customers; decreased opportunities
to obtain U.S. market exclusivity for significant new generic products;
potential liability in the U.S., Europe and other markets for sales of
generic products prior to a final resolution of outstanding patent
litigation; our potential exposure to product liability claims that are
not covered by insurance; any failure to recruit or retain key
personnel, or to attract additional executive and managerial talent; any
failures to comply with complex Medicare and Medicaid reporting and
payment obligations; significant impairment charges relating to
intangible assets, goodwill and property, plant and equipment; the
effects of increased leverage and our resulting reliance on access to
the capital markets; potentially significant increases in tax
liabilities; the effect on our overall effective tax rate of the
termination or expiration of governmental programs or tax benefits, or
of a change in our business; variations in patent laws that may
adversely affect our ability to manufacture our products in the most
efficient manner; environmental risks; and other factors that are
discussed in our Annual Report on Form 20-F for the year ended December
31, 2014 and in our other filings with the U.S. Securities and Exchange
Commission. Forward-looking statements speak only as of the date on
which they are made and we assume no obligation to update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise.
Auspex Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements. Any
statements contained herein which do not describe historical facts,
including but not limited to, statements regarding: the proposed
transaction between Teva and Auspex; the expected timetable for
completing the transaction; strategic and other potential benefits of
the transaction. Such risks and uncertainties include: the possibility
that certain closing conditions to the transaction will not be
satisfied; that required regulatory approvals for the transaction may
not be obtained in a timely manner, if at all; the ability to timely
consummate the transaction and possibility that the transaction will not
be completed; and other factors that are discussed in Auspex’s Annual
Report on Form 10-K for the year ended December 31, 2014 and in its
other filings with the U.S. Securities and Exchange Commission. Auspex
cautions investors not to place considerable reliance on the
forward-looking statements contained in this press release. These
forward-looking statements speak only as of the date of this document,
and Auspex undertakes no obligation to update or revise any of these
statements.
About the Tender Offer
THE PRESS RELEASE IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT AN OFFER
TO BUY OR THE SOLICITATION OF AN OFFER TO SELL ANY SHARES OF AUSPEX
COMMON STOCK. THE TENDER OFFER DESCRIBED IN THIS DOCUMENT HAS NOT YET
COMMENCED.
At the time the offer is commenced, an affiliate of Teva will file a
Tender Offer Statement on Schedule TO with the United States Securities
and Exchange Commission (“SEC”), and Auspex will file a
Solicitation/Recommendation Statement on Schedule 14D-9 with respect to
the tender offer.
The Offer to Purchase, the related Letter of Transmittal and certain
other offer documents, as well as the Solicitation/Recommendation
Statement, will be made available to all stockholders of Auspex at no
expense to them. The Tender Offer Statement and the
Solicitation/Recommendation Statement will be available without charge
at the SEC's web site, at http://www.sec.gov.
Free copies of these materials and certain other offering documents will
be sent to Auspex’s stockholders by the information agent for the offer.
AUSPEX STOCKHOLDERS AND OTHER INVESTORS ARE URGED TO READ THE TENDER
OFFER MATERIALS (INCLUDING THE OFFER TO PURCHASE, RELATED LETTER OF
TRANSMITTAL AND CERTAIN OTHER OFFER DOCUMENTS) AND THE
SOLICITATION/RECOMMENDATION STATEMENT, INCLUDING ALL AMENDMENTS TO THOSE
MATERIALS. SUCH DOCUMENTS WILL CONTAIN IMPORTANT INFORMATION, WHICH
SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE
TENDER OFFER.
Additional Information and Where to Find It
In addition to the Solicitation/Recommendation Statement, Auspex files
annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy any reports, statements
or other information filed by Auspex at the SEC public reference room at
100 F Street, N.E., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the
public reference room. Auspex's filings with the SEC are also available
to the public from commercial document-retrieval services and the SEC’s
website at http://www.sec.gov.
Source: Teva Pharmaceutical Industries Ltd.
Teva IR::
Kevin C. Mannix, 215-591-8912
United States
or
Ran
Meir, 215-591-3033
United States
or
Tomer Amitai, 972
(3) 926-7656
Israel
or
Teva PR:
Iris Beck Codner, 972
(3) 926-7687
Israel
or
Denise Bradley, 215-591-8974
United
States
or
Nancy Leone, 215-284-0213
United States
or
Auspex
IR:
Monique Allaire Lyons, 781-631-0759
monique@purecommunicationsinc.com
or
Auspex
PR:
Dan Budwick, 973-271-6085
dan@purecommunicationsinc.com