Cornerstone, EKR Therapeutics ink definitive merger agreement
Cornerstone to acquire EKR for approximately $125 million
CARY, N.C.—Cornerstone Therapeutics Inc. and EKRTherapeutics, Inc. have announced the signing of a definitive merger agreementby which Cornerstone will acquire privately held EKR, a specialtypharmaceutical company that specializes in the acute-care hospital setting.EKR's board of directors has approved the merger and recommended it to thecompany's shareholders.
Per the terms of the definitive merger agreement,Cornerstone will pay EKR approximately $125 million in cash initially, subjectto adjustment in accordance with the terms of the agreement. Cornerstone willalso make additional payments if certain milestones are met with regards toregulatory approval for a new active ingredient supplier for RETAVASE and salesof RETAVASE during roughly the first three years following commercialre-launch. According to the agreement, a new, wholly owned subsidiary ofCornerstone will merge with and into EKR, and EKR will continue after themerger as the surviving organization and a wholly owned subsidiary ofCornerstone.
"This transaction brings Cornerstone critical mass in thehospital-based therapeutics area and represents a major step forward in ourstrategy to focus on the hospital channel," Craig A. Collard, CEO ofCornerstone, said in a press release. "With a significantly expanded productportfolio and larger sales and additional account management infrastructure, webelieve we have enhanced our platform to drive future growth."
As part of the deal, Cornerstone will acquire the productrights to CARDENE I.V., indicated for the short-term treatment of hypertensionwhen oral therapy is not ideal, and RETAVASE, indicated for use in themanagement of acute myocardial infarction (AMI) in adults, for improvingventricular function post-AMI, the reduction of the incidence of congestiveheart failure and reduction of AMI-associated mortality. Cornerstone will beseeking U.S. Food and Drug Administration approval for a new active ingredientsupplier and re-launch of RETAVASE in 2013.
"The successful launch of CARDENE I.V., and developmentsuccesses of RETAVASE have been great achievements for EKR," John E. Bailye,CEO of EKR, said in a press release. "We are very proud of the work ouremployees have done, particularly our sales organization, who has establishedCARDENE I.V. as an important hospital franchise. We are pleased thatCornerstone recognizes the value of our business and look forward to theirsuccess in progressing these products, which will benefit clinicians and thepatients they serve."
"We plan to pursue additional hospital product licensingopportunities and company acquisitions that complement our enhanced hospitalpresence," Collard added. "We believe this strategy will position Cornerstonefor growth and bring the company to the next level of value creation."
Cornerstone brought on Stifel Nicolaus Weisel as itsfinancial advisor in conjunction with the transaction, and brought on Smith,Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P. as its legaladvisor. EKR brought on Lazard as its financial advisor for the deal and Foley& Lardner LLP as its legal advisor.
The transaction is subject to customary closing conditions,including adoption of the merger agreement by EKR's shareholders and expirationof any waiting period under U.S. anti-trust laws. The transaction is expectedto close in June.
SOURCE: Cornerstone Therapeutics press release