Filed by Atrix Laboratories, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12 under the
Securities Exchange Act of 1934
Subject Company: Atrix Laboratories, Inc.
Commission File No. 000-18231
[LOGO] QLT INC. 887 Great Northern Way t 604.707.7000
Vancouver, BC Canada V5T 4T5 f 604.707.7001
www.qltinc.com
news release
QLT INC. AND ATRIX LABORATORIES INC. COMBINE TO CREATE LEADING
PROFITABLE BIOPHARMACEUTICAL COMPANY FOCUSED ON OCULAR,
ONCLOGY, DERMATOLOGY AND UROLOGY WITH RICH PORTFOLIO OF
PRODUCTS, PIPELINE AND DRUG-DELIVERY TECHNOLOGIES; STOCK AND
CASH TRANSACTION ESTIMATED AT $855 MILLION
COMBINED COMPANY HIGHLIGHTS:
- PRIMARY MARKETED PRODUCTS, VISUDYNE FOR AMD AND ELIGARD FOR PROSTATE
CANCER
- ADDITIONAL REVENUE PRODUCING PRODUCTS IN DERMATOLOGY
- UNIQUE 6-MONTH ELIGARD PRODUCT CURRENTLY UNDER FDA REVIEW
- TOPICAL ACNE PRODUCT ATRISONE WITH NDA FILING EXPECTED IN Q3 2004
- ADDITION OF ATRIX PRODUCT PIPELINE PROVIDES FOR EXCELLENT GROWTH
OPPORTUNITIES
- ALLIANCES WITH LARGE PHARMACEUTICAL AND BIOTECHNOLOGY COMPANIES
- SOLID IP POSITION FOR UNIQUE AND PATENT PROTECTED DRUG DELIVERY
TECHNOLOGIES
- COMBINATION OF PROFITABLE COMPANIES EXPECTED TO BE ACCRETIVE IN 2006 AND
THEREAFTER ON A CASH EPS BASIS
-- CONFERENCE CALL SCHEDULED FOR 10:00 AM EDT TODAY;
DIAL-IN NUMBER IS 1-800-901-5241 --
PASSCODE: 31655123
FOR IMMEDIATE RELEASE JUNE 14, 2004
VANCOUVER, BRITISH COLUMBIA AND FORT COLLINS, COLORADO -- QLT Inc. (NASDAQ:QLTI;
TSX: QLT) and Atrix Laboratories Inc (NASDAQ:ATRX) announced today that, after
unanimous approval by the boards of directors of both companies, they have
signed a definitive agreement, for QLT to acquire 100% of Atrix's common stock
for approximately $855 million in stock and cash, taking a significant step
toward becoming a fully-integrated, biopharmaceutical company.
In the transaction Atrix shareholders will receive one common share of QLT and
$14.61 in cash for each share of Atrix common stock. The transaction offer value
is approximately $855 million and the transaction value net of Atrix's cash is
$751 million. Atrix shareholders will own approximately 23% of the combined
entity and QLT shareholders will own approximately 77%.
"This transaction will accelerate both companies' strategic initiatives and
creates a world class biopharmaceutical company with multiple partnered
commercial and near commercial products, a strong and diverse revenue base, a
robust pipeline and the financial resources to grow faster and create
sustainable shareholder value beyond what either company might have achieved
independently," said Paul Hastings, President and Chief Executive Officer of QLT
Inc. "Atrix is
a recently profitable and rapidly growing specialty pharmaceutical company with
a rich pipeline of excellent products and unique drug delivery platforms. The
company has received FDA approvals for three New Drug Applications within the
last two years, formed a growing topical dermatology products business, expanded
and enhanced cGMP manufacturing capabilities and established strategic alliances
with such pharmaceutical companies as Pfizer, Novartis, Sanofi-Synthelabo,
Fujisawa and Aventis."
"We believe this merger brings together two complementary companies creating a
growing revenue base of proprietary products, potential marketing opportunities,
economies of scale, distribution synergies, complementary product portfolios and
expanded manufacturing capabilities that ultimately should enhance shareholder
value," said David R. Bethune, Chairman and Chief Executive Officer of Atrix
Laboratories. "With its fast growing product, Visudyne, QLT is a profitable
biotechnology company with the financial and human resources necessary to
accelerate the development of Atrix's pipeline. Together, we can maximize the
combined company's core technologies to develop novel products and ultimately
achieve our goal of becoming a fully-integrated leading biopharmaceutical
company."
QLT has established a strong franchise in ocular disease and a growing focus in
other therapeutic areas including dermatology, oncology and urology - a strong
complementary fit with Atrix's therapeutic focus. With this transaction, both
QLT and Atrix take a significant step toward fulfilling their strategic
objectives. The combined entity will:
- Diversify its revenue base and product portfolio with two lead marketed
products, Visudyne for age-related macular degeneration (AMD) and Eligard
for prostate cancer;
- Potentially have two additional products on the market by 2005, an
improved 6-month, sustained release formulation of Eligard and Atrisone, a
topical acne product;
- Deliver multiple clinical milestones near term from combined pipeline
- Further strengthen its revenue base with the expanding dermatology
business;
- Strengthen the commitment to internal product/pipeline development and
R&D initiatives with 300 dedicated R&D employees;
- Leverage Atrix's novel Atrigel sustained release technology to develop
next-generation protein and peptide therapeutics for systemic and ocular
delivery;
- Have the ability to develop a commercial organization over time to market
its products; and
- Continue to license its unique patented technologies to pharmaceutical and
biotechnology companies;
TRANSACTION TERMS
The transaction is structured as a tax-free reorganization, and as such Atrix
shareholders will generally recognize gain (but not loss) only to the extent of
cash received in the transaction. The transaction is subject to approval by the
shareholders of both companies, as well as customary regulatory approvals and
satisfaction of other customary closing conditions and is expected to be
completed in the second half of 2004.
PROFILE OF THE COMBINED COMPANY:
In addition to a strong balance sheet with over $300M in cash, the combined
company expects annual revenue growth of 15% to 20%. The company is targeting a
2006 Gross R&D spend of
approximately $75 to $85 million and Net R&D (net of partner funding) of
approximately $60 to $70 million.
On a cash EPS basis, in other words, excluding the amortization of acquired
intangibles, the transaction is expected to be accretive in 2006 and thereafter,
based on the company's R&D plan. The company is targeting a long-term cash EPS
compound annual growth rate of 20% to 25%.
QLT's Board of Directors will be expanded from 8 to 10 members. Atrix's Board of
Directors will designate the additional two members, one of whom will be Atrix's
current CEO, David Bethune, who will be appointed as non-executive Vice Chairman
of the Board of Directors of QLT for a period of at least 3 months following
consummation of the transaction.
QLT is committed to retaining the best management team for the combined company
and recognizes that many of the current members of the Atrix senior management
team are complementary to QLT's management team.
QLT will welcome and maintain Atrix's operations in Fort Collins, CO housing the
cGMP manufacturing facility, the dermatology business, and certain development
programs currently underway by the Atrix team. Michael Duncan, presently
Vice-President and General Manager of Atrix, will become Vice President and
General Manager of QLT's Fort Collins facility.
KEY PRODUCT HIGHLIGHTS:
The new QLT product portfolio will include two successfully marketed and
partnered products, as well as growing revenues from the dermatology business in
collaboration with Sandoz.
VISUDYNE(R) (QLT) is the only drug approved for the treatment of wet AMD and has
been used in more than 250,000 patients worldwide. Visudyne is commercially
available in more than 72 countries for the treatment of predominantly classic
subfoveal CNV and in over 40 countries for occult subfoveal CNV caused by AMD.
Visudyne is reimbursed in the U.S. by the Center for Medicare and Medicaid
Services for certain patients with the occult and minimally classic forms of wet
AMD. It is also approved in more than 55 countries, including the EU, U.S. and
Canada, for the treatment of subfoveal CNV due to pathologic myopia (severe
near-sightedness). In some countries Visudyne is also approved for presumed
ocular histoplasmosis or other macular diseases. Visudyne is developed and
commercialized through an alliance with Novartis Opthalmics. Visudyne sales in
2004 are expected to reach $430 to $455 million.
ELIGARD(R) (Atrix) is an extended release injectable depot for the treatment of
prostate cancer. One, three and four month formulations were approved and
launched in 2002/2003. Approval for the unique 6-month dosage formulation is
anticipated in early 2005. This product could have a significant lead over
competitive products such as Takeda-Abbott's Lupron (worldwide sales $1.56
billion). Eligard is marketed in the U.S. and Canada through a partnership with
Sanofi-Synthelabo. Additional partnerships with other leading pharmaceutical
companies maximize the potential for Eligard in the rest of the world.
Partnerships throughout the rest of the world include: Yamanouchi/Medigene -
Europe, Mayne Pharmaceuticals - Australia and New Zealand and Technofarma -
South America/Mexico.
The DERMATOLOGY PORTFOLIO is made up of both proprietary and generic products.
The lead proprietary product is Atrisone. Atrisone has recently completed a
Phase III trial and has a
targeted NDA submission date in Q3 2004. Several other proprietary products are
currently in development. The Generic business which is part of a 50/50 joint
venture with Sandoz, a division of Novartis, leverages Atrix's expertise in
manufacturing and formulation and provides near-term and long-term revenue
growth potential. Atrix received 6 ANDA approvals from the FDA, has launched 5
generic dermatology products, and has an additional 4 ANDA's currently under
review with multiple product candidates in the development pipeline.
COMBINED PRODUCT PIPELINE/R&D HIGHLIGHTS:
Product Description Indication Development Status
----------------------------------------------------------------------------------------------
ELIGARD(R) Extended release Prostate Cancer NDA-filed
6-MONTH leuprolide acetate
injectable depot
ATRISONE(TM) Dapsone Acne Completed Phase III; NDA
(anti-inflammatory/ to be filed. North
anti-microbial) in a American partnership with
topical gel formulation Fujisawa.
Dapsone in a topical Rosacea Early clinical
cream formulation development. Partnership
with Fujisawa.
ATRIGEL-OCTREOTIDE 1- and 3-month Carcinoid tumors, Phase I
DEPOT sustained release acromegaly
Atrigel depot
formulations of Diabetic
Octreotide Retinopathy
3-month formulation Diabetic Preclinical testing in 2005
retinopathy
QLT0074 (LEMUTIPORPHIN) Third generation Benign prostatic Phase I/II ongoing
photodynamic therapy hyperplasia
Androgenetic Phase II ongoing
alopecia
Moderate-to- Phase I planned in 2004
severe acne
ATRIGEL/PYY3-36 Sustained release Antiobesity Preclinical
formulation of PYY3-36,
peptide that reduces
appetite
ANTI-PSORIATIC Topical drug with Autoimmune skin Preclinical
TOPICAL PRODUCT potentially durable diseases such as
responses psoriasis, atopic
dermatitis
MICRaS(TM) Atrigel-based Locally advanced Preclinical
formulation of solid tumors
radiopharmaceutical
agent 125IUDR
ATRIGEL-RISPERIDONE Sustained release of Schizophrenia Preclinical
anti-psychotic drug
ILK INHIBITORS Small molecule compounds Cancer, Preclinical
inflammation,
kidney and eye
diseases
ATRIGEL-GHRP-1 Sustained release Growth promotion, Phase I
formulation of GHRP-1 muscle wasting
OPHTHALMICS Atrigel formulations Preclinical
INVESTMENT COMMUNITY CONFERENCE CALL AND WEBCAST
There will be a joint conference call today at 10:00 am EDT to discuss the
proposed acquisition. If you would like to participate, please call
1-800-901-5241 (in North America) or 617-786-2963 (International), pass code:
31655123. A replay of this call will be available on both companies' website at
www.qltinc.com and www.atrixlabs.com. Reporters and the public are invited to
listen to the call, which will be webcast via both companies' websites.
FORWARD-LOOKING STATEMENTS
Certain statements in this press release constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995,
which involve known and unknown risks, uncertainties and other factors that may
cause actual results to be materially different from any future results,
performance or achievements expressed or implied by such statements. These
statements include statements relating to QLT's future financial and operating
results and its proposed acquisition of Atrix, including our expectation that
the acquisition will be successfully completed, anticipated revenue, dilution
and/or accretion, earnings per share, approval of products, scope of research
and development commitments, expected synergies, timing of closing, execution of
integration plans and management and organization structure resulting from the
proposed acquisition, and the tax treatment of the transaction for Atrix
shareholders. Words such as "expects," "anticipates," "intends," "plans,"
"will," "believes," "seeks," "estimates," "should," "may," "could" and
variations of such words and similar expressions are intended to identify such
forward-looking statements. These statements are based on management's current
expectations and beliefs and actual events or results may differ materially.
There are many factors that could cause such actual events or results expressed
or implied by such forward-looking statements to differ materially from any
future results expressed or implied by such statements, including, but not
limited to, the ability of the companies to obtain shareholder and regulatory
approvals for the transaction or the risk that the proposed acquisition fails to
close due to closing conditions not being satisfied, prevailing conditions in
the capital markets or for any other reason, the reaction of customers,
suppliers, marketing and collaboration partners and other third parties to the
proposed acquisition and the risk that the businesses of the two companies
suffer due to uncertainty, the potential inability of the two parties to
successfully execute their integration strategies or achieve planned synergies,
the diversion of management's time on acquisition-related issues, uncertainties
regarding the two companies' future operating results, the risk that future
sales of Visudyne(R) and Eligard may be less than expected, currency
fluctuations in QLT's primary markets, uncertainty and timing of pricing and
reimbursement relating to Visudyne(R), uncertainty regarding the outcome of the
pending litigation against QLT and Atrix, the timing, expense and uncertainty
associated with the regulatory approval process for products, the safety and
effectiveness of the two companies' products and technologies, the ability of
the companies' marketing partners to successfully market their respective
products, Atrix's expectation of receiving royalties on sales of its products
and its plans to manufacture certain of its products at its facility in Fort
Collins, Colorado, the timing of new product launches
by QLT, Atrix or their competitors, general competitive conditions within the
biotechnology and drug delivery industry and general economic conditions, and
other risks that are described in QLT's Annual Report on Form 10-K filed with
the SEC on March 12, 2004, and its filings with Canadian securities regulatory
authorities, or described in Atrix's Annual Report on Form 10-K filed with the
SEC on March 3, 2004. Forward-looking statements are based on current
expectations and neither company assumes any obligation to update such
information to reflect later events or developments, except as required by law.
ADDITIONAL INFORMATION
In connection with QLT's proposed acquisition of Atrix, QLT intends to file with
the SEC a registration statement on Form S-4, containing a joint proxy
statement/prospectus and other relevant materials. INVESTORS AND SECURITY
HOLDERS OF QLT AND ATRIX ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS
AND THE OTHER RELEVANT MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT QLT, ATRIX AND THE ACQUISITION. The joint
proxy statement/prospectus and other relevant materials (when they become
available), and any other documents filed by QLT or Atrix with the SEC, may be
obtained free of charge at the SEC's web site at www.sec.gov. In addition,
investors and security holders may obtain free copies of the documents (when
they are available) filed with the SEC by QLT by directing a request to: QLT
Inc., 887 Great Northern Way, Vancouver, BC, Canada, Attn: Investor Relations.
Investors and security holders may obtain free copies of the documents filed
with the SEC by Atrix by contacting Atrix Laboratories, Inc., 2579 Midpoint
Drive, Fort Collins, CO, Attn: Investor Relations.
QLT, Atrix and their respective executive officers and directors may be deemed
to be participants in the solicitation of proxies from the stockholders of QLT
and Atrix in favor of the acquisition. Information about the executive officers
and directors of QLT and their ownership of QLT common shares is set forth in
the proxy statement for QLT's 2004 Annual Meeting of Shareholders, which was
filed with the SEC as Exhibit 99.1 to Form 10-K/A on April 28, 2004. Information
about the executive officers and directors of Atrix and their ownership of Atrix
common stock is set forth in the proxy statement for Atrix's 2004 Annual Meeting
of Stockholders, which was filed with the SEC on April 5, 2004. Investors and
security holders may obtain more detailed information regarding the direct and
indirect interests of QLT, Atrix and their respective executive officers and
directors in the acquisition by reading the joint proxy statement/prospectus
regarding the acquisition when it becomes available.
BACKGROUND ON QLT INC. AND ATRIX LABORATORIES INC.
QLT INC. (Nasdaq: QLTI; TSE: QLT) is a global pharmaceutical company
specialising in the discovery, development and commercialisation of innovative
therapies to treat cancer, eye diseases and niche areas for which treatments can
be marketed by a specialty sales force. Combining expertise in ophthalmology,
oncology and photodynamic therapy, QLT has commercialised two products to date,
including Visudyne therapy, which is the most successfully launched
ophthalmology product ever. For more information, visit our web site at
www.qltinc.com
ATRIX LABORATORIES, INC. (Nasdaq: ATRX) Atrix Laboratories, Inc. is an emerging
specialty pharmaceutical company focused on advanced drug delivery. With unique
patented sustained release and topical technologies, Atrix is currently
developing a diverse portfolio of proprietary products, including oncology and
dermatology products. The company also partners with large pharmaceutical and
biotechnology companies to apply its proprietary technologies to new chemical
entities or to extend the patent life of existing products. Additional
information is available on the Atrix Laboratories, Inc. website at
www.atrixlabs.com
CONTACTS:
QLT Inc.:
Vancouver, Canada
Therese Hayes/Tamara Hicks
Telephone: 604-707-7000 or 1-800-663-5486
Fax: 604-707-7001
Atrix Laboratories Inc.:
Michael Duncan
Telephone: 970-482-5868