Cornerstone Therapeutics Inc. Completes Acquisition of EKR Therapeutics, Inc.
Published: Jun 27, 2012
CARY, NC--(Marketwire - June 27, 2012) -
- Expands hospital product portfolio with cardiovascular products CARDENE® I.V. and RETAVASE® building critical mass in the hospital-based therapeutics area
- Addition of CARDENE I.V. immediately contributes to Company's revenue
- Acquisition expected to be accretive in the third quarter of fiscal 2012 on a non-GAAP EPS basis
Cornerstone Therapeutics Inc. (NASDAQ: CRTX) today announced the closing of its acquisition of EKR Therapeutics, Inc., a privately-held specialty pharmaceutical company focused on the acute-care hospital setting. Pursuant to the merger agreement, EKR Therapeutics will become a wholly owned subsidiary of Cornerstone.
With the completion of the acquisition, Cornerstone immediately assumes responsibility for the marketing and promotion of CARDENE® I.V. (nicardipine hydrochloride), which is indicated for the short-term treatment of hypertension when oral therapy is not feasible or desirable. Cornerstone also acquired RETAVASE® (Reteplase), which is indicated for use in the management of acute myocardial infarction (AMI) in adults, for the improvement of ventricular function following AMI, the reduction of the incidence of congestive heart failure and the reduction of mortality associated with AMI. Cornerstone is targeting FDA approval of a new active ingredient supplier and relaunch of RETAVASE to the market in 2013.
"We believe this transaction delivers on our promise to transform Cornerstone into a leading specialty pharmaceutical company that provides hospital and related specialty market products," said Craig A. Collard, Cornerstone's Chief Executive Officer. "We expect that the combination of Cornerstone and EKR will generate synergies, while the addition of the EKR sales force will significantly expand our reach in the U.S. hospital market. With the launch of CRTX 080 (lixivaptan) and the relaunch of RETAVASE in 2013, our sales force will be actively promoting four products within the hospital channel. From a revenue growth perspective, we believe that annualized sales from CARDENE I.V. could exceed $50 million."
Collard added, "Lixivaptan is under review by the FDA for the treatment of hyponatremia, which is a common condition in patients with heart failure. With the acquisition of EKR and specifically, CARDENE I.V., we have the opportunity to strengthen our existing relationships within the cardiology community as we prepare for the approval and launch of lixivaptan."
Cornerstone acquired EKR Therapeutics for an initial cash payment of approximately $125 million and additional payments contingent upon the achievement of certain milestones related to regulatory approval of a new active ingredient supplier for RETAVASE and sales of RETAVASE during approximately the first three years following commercial relaunch. As part of the EKR transaction, Cornerstone entered into a credit agreement with Chiesi Farmaceutici, S.p.A., its largest shareholder, in which Chiesi is providing a five-year Term Loan A of $60 million and a five-year Term Loan B of $30 million. The Term Loan B may be converted into common stock of Cornerstone at $7.098 per share at Chiesi's option at any time during the first 24 months following the closing of the credit arrangement.
"We believe the terms of the credit arrangement with Chiesi are favorable to Cornerstone when compared to financing alternatives that may be available to us in the public markets," said Vincent T. Morgus, Cornerstone's Chief Financial Officer. "More importantly, we believe our ability to access Chiesi as a financing source will continue to help us capitalize on new potential growth opportunities."
The general and administrative functions of the combined company will be consolidated at Cornerstone's headquarters in Cary, N.C.
About Cornerstone Therapeutics
Cornerstone Therapeutics Inc. (NASDAQ: CRTX), headquartered in Cary, N.C., is a specialty pharmaceutical company focused on commercializing products for the hospital, niche respiratory and related specialty markets. Key elements of the Company's strategy are to focus its commercial and internal development efforts in the hospital and related specialty product sector within the U.S. pharmaceutical marketplace; continue to seek out opportunities to acquire companies and marketed and/or registration-stage products that fit within the Company's focus areas; and generate revenues by marketing approved generic products through the Company's wholly-owned subsidiary, Aristos Pharmaceuticals, Inc. For more information, visit www.crtx.com.
Safe Harbor Statement
Statements in this press release regarding the progress and timing of our product development programs and related trials; our future opportunities; our strategy, future operations and opportunities, including our plans regarding the manner and timing for the manufacture and sale of our newly-acquired cardiovascular products, anticipated financial position, future revenues and projected costs; our management's prospects, plans and objectives; and any other statements about management's future expectations, beliefs, goals, plans or prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
Any statements that are not statements of historical fact (including, without limitation, statements containing the words "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "project," "should," "target," "will," "would" and similar expressions) should also be considered to be forward-looking statements.
There are a number of important factors that could cause our actual results or events to differ materially from those indicated by such forward-looking statements, including risks relating to our "critical accounting estimates"; our ability to develop and maintain the necessary sales, marketing, supply chain, distribution and manufacturing capabilities to commercialize our products; our ability to replace the revenues from our marketed unapproved products, which we ceased manufacturing and distributing at the end of 2010, our propoxyphene products, which we voluntarily withdrew from the U.S. market in November 2010 at the request of the U.S. Food and Drug Administration, or FDA, and our anti-infective products, which we divested in March 2012; the adverse impact of returns of previously sold inventory; patient, physician and third-party payer acceptance of our products as safe and effective therapeutic products; our heavy dependence on the commercial success of a relatively small number of currently marketed products; our ability to maintain regulatory approvals to market and sell our products; our ability to obtain FDA approval to market and sell our products under development; our ability to enter into additional strategic licensing, product acquisition, collaboration or co-promotion transactions on favorable terms, if at all; our ability to manage and control unknown liabilities in connection with any acquisitions; our ability to successfully manage growth or integrate acquired businesses and operations; our ability to maintain compliance with NASDAQ listing requirements; adverse side effects experienced by patients taking our products; difficulties relating to clinical trials, including difficulties or delays in the completion of patient enrollment, data collection or data analysis; the results of preclinical studies and clinical trials with respect to our product candidates and whether such results will be indicative of results obtained in later clinical trials; our ability to develop and commercialize our product candidates before our competitors develop and commercialize competing products; our ability to satisfy FDA and other regulatory requirements; and our ability to obtain, maintain and enforce patent and other intellectual property protection for our products and product candidates and the other factors described in Item 1A (Risk Factors) of our Annual Report on Form 10-K filed with the SEC on March 6, 2012 and in our subsequent filings with the SEC. If one or more of these factors materialize, or if any underlying assumptions prove incorrect, our actual results, performance or achievements may vary materially from any future results, performance or achievements expressed or implied by these forward-looking statements.
In addition, the statements in this press release reflect our expectations and beliefs only as of the date of this release. We anticipate that subsequent events and developments will cause our expectations and beliefs to change. However, while we may elect to update these forward-looking statements publicly at some point in the future, we specifically disclaim any obligation to do so, whether as a result of new information, future events or otherwise, except as required by law. Our forward-looking statements do not reflect the potential impact of any acquisitions, mergers, dispositions, business development transactions, joint ventures or investments that we may make or enter into. These forward-looking statements should not be relied upon as representing our views as of any date after the date of this release.
CARDENE® I.V. and RETAVASE® are registered trademarks of EKR Therapeutics, Inc.
IMPORTANT SAFETY INFORMATION
CARDENE Important Safety Information
CARDENE ® I.V. (nicardipine hydrochloride) Premixed Injection is indicated for the short-term treatment of hypertension when oral therapy is not feasible or not desirable. For prolonged control of blood pressure, transfer patients to oral medication as soon as their clinical condition permits. CARDENE I.V. Premixed Injection is contraindicated in patients with advanced aortic stenosis because part of the effect of CARDENE I.V. is secondary to reduced afterload. In administering nicardipine, close monitoring of blood pressure and heart rate is required. Nicardipine may occasionally produce symptomatic hypotension or tachycardia. Avoid systemic hypotension when administering the drug to patients who have sustained an acute cerebral infarction or hemorrhage. Increases in frequency, duration, or severity of angina have been seen in chronic therapy with oral nicardipine. Induction or exacerbation of angina has been seen in less than 1% of coronary artery disease patients treated with CARDENE I.V. The mechanism of this effect has not been established. Titrate slowly when using CARDENE I.V., particularly in combination with a beta-blocker, in patients with heart failure or significant left ventricular dysfunction because of possible negative inotropic effects. Since nicardipine is metabolized in the liver, consider lower dosages and closely monitor responses in patients with impaired liver function or reduced hepatic blood flow. When CARDENE I.V. was given to mild to moderate hypertensive patients with moderate renal impairment, a significantly lower systemic clearance and higher area under the curve (AUC) was observed. These results are consistent with those seen after oral administration of nicardipine. Titrate gradually in patients with renal impairment. To reduce the possibility of venous thrombosis, phlebitis, local irritation, swelling, extravasation, and the occurrence of vascular impairment, administer drug through large peripheral veins or central veins rather than arteries or small peripheral veins, such as those on the dorsum of the hand or wrist. To minimize the risk of peripheral venous irritation, change the site of the drug infusion every 12 hours. Most common adverse reactions are headache (15%), hypotension (6%), nausea/vomiting (5%) and tachycardia (4%).
RETAVASE Important Safety Information
RETAVASE ® (Reteplase) is indicated for use in the management of acute myocardial infarction (AMI) in adults for the improvement of ventricular function following AMI, the reduction of the incidence of congestive heart failure and the reduction of mortality associated with AMI. Treatment should be initiated as soon as possible after the onset of AMI symptoms. Thrombolytic therapy increases the risk of bleeding, therefore RETAVASE (reteplase, recombinant) is contraindicated in patients with: active internal bleeding, a history of cerebrovascular accident, recent intracranial or intraspinal surgery or trauma, intracranial neoplasm, arteriovenous malformation, or aneurysm, known bleeding diathesis, and, severe uncontrolled hypertension. The most common complication encountered during RETAVASE ® therapy is bleeding. The sites of bleeding include both internal bleeding sites (intracranial, retroperitoneal, gastrointestinal, genitourinary, or respiratory) and superficial bleeding sites (venous cutdowns, arterial punctures, and sites of recent surgical intervention). The concomitant use of heparin anticoagulation may contribute to bleeding. As fibrin is lysed during RETAVASE ® therapy, bleeding from recent puncture sites may occur. Therefore, thrombolytic therapy requires careful attention to all potential bleeding sites. Noncompressible arterial puncture must be avoided and internal jugular and subclavian venous punctures should be avoided to minimize bleeding from noncompressible sites. If serious bleeding occurs, concomitant anticoagulant therapy should be terminated immediately. In addition, the second bolus of RETAVASE ® should not be given if serious bleeding occurs before it is administered. Each patient being considered for therapy with RETAVASE ® should be carefully evaluated and anticipated benefits weighed against the potential risks associated with therapy. Cholesterol embolism, which can be lethal, has been reported rarely in patients treated with thrombolytic agents; the true incidence is unknown. Coronary thrombolysis may result in arrhythmias associated with reperfusion. It is recommended that antiarrhythmic therapy for bradycardia and/or ventricular irritability be available when RETAVASE ® is administered. Patients administered RETAVASE ® as treatment for myocardial infarction have experienced many events which are frequent sequelae of myocardial infarction and may or may not be attributable to RETAVASE ® therapy. These events include cardiogenic shock, arrhythmias (e.g., sinus bradycardia, accelerated idioventricular rhythm, ventricular premature depolarizations, supraventricular tachycardia, ventricular tachycardia, ventricular fibrillation), AV block, pulmonary edema, heart failure, cardiac arrest, recurrent ischemia, reinfarction, myocardial rupture, mitral regurgitation, pericardial effusion, pericarditis, cardiac tamponade, venous thrombosis and embolism, and electromechanical dissociation. These events can be life-threatening and may lead to death. Other adverse events have been reported, including nausea and/or vomiting, hypotension, and fever. Rare but serious allergic reactions have been reported in patients receiving RETAVASE ® in clinical trials.