Healthcare Industry News: HSMN NewsFeed
News Release - October 29, 2010
NeoPharm, Inc. Announces Merger with Insys Therapeutics, Inc.LAKE BLUFF, Ill.--(Healthcare Sales & Marketing Network)-- NeoPharm, Inc. (Other OTC:NEOL.PK.pk ), a biopharmaceutical company dedicated to the research, development and commercialization of new and innovative therapeutic applications of drugs for cancer and other diseases, today announced it has entered into a merger agreement with Insys Therapeutics, a Phoenix-based drug development company focused on pain and oncology.
Under the terms of the merger agreement, NeoPharm will issue approximately 19.5 million shares of common stock and 14.9 million shares of a newly-created convertible preferred stock to the stockholders of Insys, and a newly-formed subsidiary of NeoPharm will merge into Insys, with Insys surviving as a wholly-owned subsidiary of NeoPharm. Each share of the new convertible preferred stock of NeoPharm will be convertible into 35 shares of NeoPharm common stock and, until converted, will be entitled to the voting, dividend and liquidation rights of the same number of shares of common stock into which it is convertible. Upon completion of the merger and conversion of the new preferred stock, the shares issued to the former Insys stockholders will represent 95% of the outstanding shares of NeoPharm common stock. The transaction is expected to be consummated on or about November 8, 2010.
Insys is a privately held corporation that is majority owned by Dr. John N. Kapoor. Dr. Kapoor also serves as a director of NeoPharm and owns approximately 21% of the outstanding common stock of NeoPharm. Accordingly, NeoPharm’s board established a special committee consisting solely of independent directors not affiliated with Dr. Kapoor and Insys to evaluate the proposed transaction and strategic alternatives. The special committee retained its own advisers and counsel, received a fairness opinion from an investment bank and unanimously recommended the merger to the NeoPharm board, which also unanimously approved the transaction. No vote or approval of NeoPharm stockholders is required to complete the merger. The approval of the NeoPharm stockholders is needed to increase the authorized shares of common stock of NeoPharm in order to provide sufficient shares for the conversion of the convertible preferred stock. NeoPharm intends to obtain that approval after the closing of the merger.
The NeoPharm board also has approved the distribution, immediately after the merger, of non-transferable contingent payment rights to its stockholders of record as of November 5, 2010. These rights will entitle the pre-merger stockholders to receive cash payments aggregating $20 million (equivalent to $0.70402 per share) if, prior to the five year anniversary of the merger, the U.S. Food and Drug Administration approves a new drug application for any one or more of NeoPharm’s drugs currently under development (LEP-ETU, LE-DT and IL13-PE38) pursuant to an approval letter that grants NeoPharm the right to market and sell the drug immediately and provides for labeling that does not contain a “black box warning.” The cash payments would be made within nine months of FDA approval. The distribution and payment of the contingent payment rights are subject to completion of the merger and applicable Delaware corporation law.
Upon effectiveness of the merger, the current officers and directors of NeoPharm are expected to resign and be replaced by the officers and directors of Insys. Stockholders of NeoPharm may obtain copies of the merger agreement and other transaction documents by contacting: Martin McCarthy, CPA, Corporate Controller and Acting CFO of NeoPharm, at 847-775-4597 or email@example.com.
About NeoPharm, Inc.
NeoPharm, Inc., based in Lake Bluff, Illinois, is a biopharmaceutical company dedicated to the research, development and commercialization of new and innovative cancer and other drugs for therapeutic applications. Additional information can be obtained by visiting NeoPharm's web site at www.neopharm.com.
About Insys Therapeutics, Inc.
Insys Therapeutics, Inc., based in Phoenix, Arizona, is a biopharmaceutical company focused on discovering, developing and commercializing innovative products to address chemotherapy-induced nausea and vomiting (CINV), pain management and other central nervous system disorders. It seeks to apply new and proprietary formulations and delivery methods to existing pharmaceutical compounds in order to achieve enhanced efficacy, faster onset of action, reduced side effects, convenient delivery and increased patient compliance. Its drug development program is based on existing compounds with known safety, efficacy and commercialization histories. Additional information can be obtained by visiting Insys’s website at: www.insysrx.com
Forward Looking Statements - This press release contains "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. The Company has tried to identify such forward-looking statements by use of such words as "expects," "intends," "hopes," "anticipates," "believes," "could," "may," "evidences" and "estimates," and other similar expressions, but these words are not the exclusive means of identifying such statements. Such statements include, but are not limited to, any statements relating to the Company's strategic review of projects and operations, the Company's drug development programs, the initiation, progress and outcomes of clinical trials of the Company's drug product candidates, and any other statements that are not historical facts. Such statements involve risks and uncertainties, including, but not limited to, those risks and uncertainties relating to difficulties or delays in financing, development, testing, regulatory approval, production, and marketing of the Company's drug compounds, the Company's ability to evaluate the strategic alternatives available to the Company and to cut back on its funding of certain of its development projects in order to conserve its cash resources, the ability of the Company to procure additional future sources of financing, unexpected adverse side effects or inadequate therapeutic efficacy of the Company's drug compounds, that could slow or prevent products coming to market, uncertainty regarding the Company's ability to market its drug products, the uncertainty of patent protection for the Company's intellectual property or trade secrets, and other risks of the type previously detailed in filings the Company made with the Securities and Exchange Commission ("SEC"). Such statements are based on management's current expectations, but actual results may differ materially due to various factors, including those risks and uncertainties mentioned or referred to in this press release. At the Company's request, the Company's obligation to file reports with the SEC was suspended effective February 12, 2009. For the foregoing reasons, you should not rely on these forward-looking statements or on previously filed SEC reports as a prediction of actual future results.
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