Simultaneously with the completion of the financing, Synovics completed the previously announced acquisition of Kirk Pharmaceuticals, LLC, and its affiliated company ANDAPharm, LLC ("Kirk"). Under the terms of the agreement, Synovics purchased 100% of Kirk for $12 million, including $9 million in cash and $3 million in debt. Kirk, a manufacturer of over-the-counter (OTC) and generic drugs based in Ft. Lauderdale, Fla., had revenue of approximately $14.6 million for the fiscal year ended October 31, 2005, up 20% compared with the previous fiscal year.
Ronald Howard Lane, Ph.D., Chairman and CEO of Synovics Pharmaceuticals, stated, "Today's announcements mark a watershed event for our company. The financing funds the acquisition of Kirk, provides capital to accelerate development of our generic drug pipeline, and creates a strategic relationship with Maneesh Pharmaceuticals. We have high expectations for Kirk, not only as a developer and manufacture of our generic and 505(b)(2) drugs, but also in the development and sales of their OTC and prescription products. The new strategic relationship with Maneesh offers many potential R&D, manufacturing and marketing synergies, and we are extremely pleased with their investment in our future."
John S. Copanos, President and COO of Kirk Pharmaceuticals, noted, "Joining forces with Synovics will significantly strengthen Kirk's operating and product capabilities. The addition of Synovics' technology to Kirk will provide proprietary and patented drug manufacturing, increase new product opportunities for growth and support our ongoing efforts to reduce manufacturing costs. We have all worked diligently over the past months to complete this transaction, and I am very enthusiastic about the future of our new company."
Vinay Sapte, Managing Director of Maneesh Pharmaceuticals, commented, "Our investment in Synovics reflects our confidence in their technology and their significant product pipeline, and in the economic potential we believe these assets represent. In addition, we view this as a strategic investment as we believe that Maneesh may provide distribution of Synovics' pharmaceutical products to Europe, Asia and Latin America, where we currently have a strong presence. Additionally, we believe Maneesh offers Synovics access to additional low-cost R&D and manufacturing capabilities we have or are developing in India."
Conference Call
Synovics and Kirk management will host an investment-community conference call Thursday, June 1, beginning at 4:00 p.m. Eastern time (1:00 p.m. Pacific time) to discuss the completion of this financing and acquisition, and to answer questions.
Individuals interested in participating in the conference call may do so by dialing (877) 815-7177 for domestic callers, or (706) 634-1250 for international callers. A telephone replay will be available for 48 hours following the conclusion of the call by dialing (800) 642-1687 for domestic callers, or (706) 645-9291 for international callers, and entering reservation code 9892703.
The live call also will be available via the Internet on the Company's Web site at www.synovics.com. A webcast replay of the call will be available for 14 days following the conclusion of the call.
About Kirk Pharmaceuticals, LLC
Kirk is a Florida-based company that manufactures OTC and generic prescription drugs. The company was founded in 1999 and has grown from four employees to more than 120 today. Kirk has 70,000 square feet of manufacturing space in its FDA- and DEA-approved facility, and Schedule 2, 3, 3N, 4 and 5 pharmaceutical manufacturing and List I Chemicals certification. Kirk currently manufactures and/or markets more than 30 OTC solid-dose and soft-gel pharmaceutical products. Kirk's business strategy is to develop and manufacture low-cost OTC products in a streamlined manufacturing environment using Current Good Manufacturing Practices (cGMP) guidelines.
About Maneesh Pharmaceuticals PVT
Maneesh is among the fastest-growing pharmaceutical companies in India. With headquarters in Mumbai, the company features quality manufacturing, domestic and international marketing, and research and development activities for conventional therapies and novel drugs. Maneesh is expanding globally through joint ventures and subsidiaries in more than 70 countries across Africa, South America, Europe, the Middle East and the Asian Continents, and has a strong presence in India through its two marketing arms, Svizera Healthcare and Maneesh Healthcare. Maneesh has developed innovative products that are marketed by leading pharmaceutical companies in India and abroad. It is one of the leading manufacturers and exporters of anti-tuberculosis drugs globally.
About Synovics Pharmaceuticals, Inc.
Synovics is a pharmaceutical company engaged in the development, manufacturing and commercialization of oral, controlled-release generic drugs and improved formulations of previously approved drugs. The Company has licensed exclusive and worldwide rights to certain proprietary oral, controlled-release drug formulation technologies. Synovics is pursuing U.S. development and commercialization of its pipeline of difficult-to-formulate generic and branded drugs. Synovics intends to file Abbreviated New Drug Applications (ANDAs) with the FDA for its oral, controlled-release generic drugs. Earlier this year Synovics announced initiation of its first two generic drug candidates, SNG1001a and SNG1002a, for which it hopes to file ANDAs toward the end of this year. The Company believes it has numerous first-to-file or only-to-file opportunities with its ANDAs, which could result in periods of marketing exclusivity. Additionally, the Company intends to develop its portfolio of oral, controlled-release branded drugs and file a series of 505(b)(2) New Drug Applications with the FDA. 505(b)(2) New Drug Applications are for pharmaceutical products that are based on the development of new or improved uses for existing drugs. Synovics also has obtained ownership of an ANDA filed with the FDA for an extended-release 500 mg dosage of metformin, a drug for the treatment of type 2 diabetes. Through Kirk, OTC drugs and immediate-release generics will be a growing source of product sales.
``Safe Harbor'' statements under the Private Securities Litigation Reform Act of 1995: Except for the historical information contained herein, the statements made in this press release constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements can be identified by their use of words such as "expects," "plans," "projects," "will," "may," "anticipates," "believes," "should," "intends," "estimates" and other words of similar meaning. Because such statements inherently involve risks and uncertainties that cannot be predicted or quantified, actual results may differ materially from those expressed or implied by such forward-looking statements depending upon a number of factors affecting the Company's business. These factors include, among others: the difficulty in predicting the timing and outcome of product development including biostudies demonstrating "bioequivalency," outcome of any potential legal proceedings, including patent-related matters such as patent challenge settlements and patent infringement cases; the outcome of litigation arising from challenging the validity or non-infringement of patents covering our products; the difficulty of predicting the timing of FDA approvals; court and FDA decisions on exclusivity periods; the ability of competitors to extend exclusivity periods for their products; our ability to complete product development activities in the timeframes and for the costs we expect; market and customer acceptance and demand for our products; our possible dependence on revenues from significant customers; the use of estimates in the preparation of our financial statements; the potential for competitors to file ANDAs prior to any filing by the Company pertaining to the same target brand; the impact of competitive products and pricing on products, including the launch of authorized generics; the ability to launch new products in the timeframes we expect; the availability of raw materials; the availability of any product we purchase; the regulatory environment; our exposure to product liability and other lawsuits and contingencies; the increasing cost of insurance and the availability of product liability insurance coverage; our timely and successful completion of strategic initiatives, including integrating companies and products we may acquire and implementing our new enterprise resource planning system; fluctuations in operating results, including the effects on such results from spending for research and development, sales and marketing activities and patent challenge activities; the inherent uncertainty associated with financial projections; changes in generally accepted accounting principles, fluctuations in operating results; capital adequacy; statements of future plans relating to the Company's capital needs, product development and filings with the FDA, business and growth strategies; statements specifically concerning the successful closing of acquisitions, and satisfying closing conditions of any future financial transactions including debt or equity requirements, regulatory requirements; and meeting conditions set by potential equity investors, reliance on key strategic alliances, capital markets, and in general risks related to the regulatory environment and government approval processes, and any other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission. The forward-looking statements contained in this press release speak only as of the date the statement was made. The Company undertakes no obligation (nor does it intend) to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required under applicable law.
Contact: Synovics Pharmaceuticals, Inc. Ronald Howard Lane, Ph.D., 602-508-0112 www.synovics.com or Lippert/Heilshorn & Associates (Investor Contacts) Don Markley or Brandi Floberg, 310-691-7100 dmarkley@lhai.com
Source: Synovics Pharmaceuticals, Inc.
