Healthcare Industry News:  analgesia 

Biopharmaceuticals Mergers & Acquisitions

 News Release - September 20, 2006

Hospira Announces $2 Billion Agreement to Acquire Mayne Pharma

Combination Doubles Hospira's International Presence and Creates the World's Leading Generic Injectable Pharmaceuticals Company

Transaction Expected to be Accretive to Cash EPS in 2007

LAKE FOREST, Ill., Sept. 20 (HSMN NewsFeed) -- Hospira, Inc. (NYSE: HSP ), a leading global hospital products company, and Mayne Pharma Limited (ASX: MYP ), a leading Australia-based specialty injectable pharmaceuticals company, today announced that the companies have entered into an agreement for Hospira to acquire Mayne. Under the terms of the agreement, Mayne shareholders will receive AUD$4.10 cash per outstanding ordinary share of Mayne, or a total equity consideration of approximately AUD$2.6 billion (US$2.0 billion), including options. The transaction represents a 32 percent premium over Mayne's Sept. 18, 2006, closing price.

"This combination will create the leading generic injectable pharmaceuticals company in the world -- delivering unparalleled value to the global healthcare system as well as our respective shareholders and employees," said Christopher B. Begley, chief executive officer, Hospira. "The Mayne acquisition more than doubles Hospira's international presence and significantly accelerates the expansion of our generic injectables business."

Compelling Strategic Rationale

The combination of Hospira and Mayne represents an excellent strategic fit, with highly complementary product portfolios and geographic footprints. The acquisition is expected to:
    -- Establish Hospira as the worldwide leader in generic injectable
       pharmaceuticals. Today, Hospira holds the No. 1 generic injectables
       market position in the United States, backed by the industry's broadest
       portfolio and a growing product pipeline. Mayne Pharma's leadership
       positions in Europe and Australia, and significant presence in Canada,
       strengthens Hospira's global reach with an attractive marketed
       portfolio and strong pipeline.
    -- Accelerate Hospira's global expansion. The acquisition doubles
       international sales to nearly 30 percent of Hospira's total sales and,
       importantly, expands the company's international infrastructure with
       the addition of Mayne's global sales and distribution platform.
    -- Expand and solidify Hospira's oncology presence. Oncolytics represent
       roughly half of Mayne's product portfolio, which boasts a comprehensive
       range of agents across this important and fast-growing therapeutic
       category and significantly strengthens Hospira's product offerings.
    -- Provide Hospira with potent/cytotoxic manufacturing and research and
       development (R&D) capabilities. Mayne's comprehensive and
       differentiated expertise in formulating and manufacturing potent and
       cytotoxic compounds supplements Hospira's already-broad development and
       manufacturing capabilities.
    -- Continue to help reduce the overall costs of healthcare -- to improve
       both the affordability of care for patients and the financial health of
       the global healthcare system. By increasing the number and availability
       of generic injectable drugs in its portfolio, Hospira will be better
       positioned to provide high-quality, more cost-effective alternatives to
       many proprietary pharmaceuticals.
"Mayne has grown rapidly over recent years and we believe will continue to grow under the ownership of Hospira, which will provide access to greater resources, particularly in the important U.S. market," said Peter Willcox, chairman, Mayne Pharma. "Hospira has a long heritage, much like our own company, and will encourage the development of our business to the benefit of our customers and employees."

"We look forward to welcoming our Mayne colleagues to Hospira and fully expect their talents and skill sets to contribute to our future success," said Begley.

Transaction Details

The transaction is subject to Mayne shareholder, regulatory and court approvals, as well as customary closing conditions. Assuming all necessary approvals are secured, the transaction is expected to be completed by the end of the current calendar year.


The combination of the two companies is estimated to generate a minimum of $50 million of annualized synergies in 2008. Hospira expects to achieve annual savings through infrastructure optimization as well as improved supply chain, administrative and other operational efficiencies. After giving effect to estimated synergies, the transaction is expected to be accretive to earnings per share in 2007, excluding the impact of transaction-related expenses, such as purchase accounting charges and integration costs, and the amortization of intangible assets. The impact on GAAP earnings per share, before the effect of transaction-related expenses, is estimated to be neutral in 2008. Purchase accounting charges and the amortization of intangible assets will be finalized after the transaction's close. To finance the acquisition, Hospira will use available cash and incur approximately $1.9 billion of debt under committed financing facilities provided by Morgan Stanley. Using Hospira and Mayne's strong combined cash flow, the company intends to pay down the debt as quickly as feasible.


Morgan Stanley is acting as financial advisor and Baker & McKenzie is acting as legal advisor to Hospira. Merrill Lynch is acting as financial advisor and Clayton Utz is acting as legal advisor to Mayne Pharma.


A conference call for investors and media will be held at 7:30 a.m. Central Time on Thursday, Sept. 21, 2006. A live webcast of the conference call will be available at Listeners should log on approximately 10 minutes in advance to ensure proper computer setup for receiving the webcast. A replay will be available on the Hospira Web site for 30 days following the call.

About Hospira

Hospira, Inc. is a global specialty pharmaceutical and medication delivery company dedicated to Advancing Wellness(TM) by developing, manufacturing and marketing products that help improve the productivity, safety and efficacy of patient care. With 70 years of service to the hospital industry, Hospira's portfolio includes one of the industry's broadest lines of generic acute-care injectables, which help address the high cost of proprietary pharmaceuticals; integrated solutions for medication management and infusion therapy; and the leading U.S. injectable contract manufacturing business. Headquartered north of Chicago in Lake Forest, Ill., Hospira has approximately 13,000 employees and 14 manufacturing facilities worldwide. Hospira's news releases and other information can be found at

About Mayne Pharma

Mayne Pharma Limited is a specialty pharmaceutical company focused on developing, manufacturing and selling a comprehensive range of products to oncology customers in more than 65 countries around the world. The company seeks to augment its growth by accessing additional marketed or development- stage products either through acquisition or partnership. Mayne Pharma generated sales of more than AUD$800 million in its financial year ended 30 June 2006 and is listed on the Australian Stock Exchange under the symbol 'MYP'. For more information about Mayne Pharma, please visit

Private Securities Litigation Reform Act of 1995 -- A Caution Concerning Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the proposed business combination of Hospira and Mayne Pharma, the anticipated consequences and benefits of such transaction, projected cost savings and the projected impact on Hospira's earnings. Hospira cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements. Risks and uncertainties relating to the proposed transaction include: the risk that regulatory approvals will not be obtained on a timely basis or at all; the risk that the transaction will not be consummated; risks relating to the integration of Mayne Pharma's business into Hospira, including incurring higher than expected costs or experiencing delays or other difficulties associated with the integration; the risk that the anticipated benefits and synergies from the transaction will not be realized; and risks associated with Hospira's incurrence of substantial indebtedness. Economic, competitive, governmental, technological and other factors that may affect Hospira's operations and may cause actual results to be materially different from expectations include the risks, uncertainties and factors discussed under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Hospira's Annual Report on Form 10-K for the year ended Dec. 31, 2005, and subsequent Quarterly Reports on Form 10-Q, filed with the Securities and Exchange Commission, which are incorporated by reference. Hospira undertakes no obligation to release publicly any revisions to forward-looking statements as the result of subsequent events or developments.

The proposed acquisition would pair two leading suppliers of specialty injectable pharmaceuticals to create the largest generic injectable presence worldwide. The combination of Hospira and Mayne Pharma represents an excellent strategic fit, with highly complementary businesses.


                             HOSPIRA*                      MAYNE PHARMA+
             FISCAL YEAR  Jan. 1 through                 July 1 through
                          Dec. 31                        June 30
                   SALES  ~$2.6 billion                  ~AUD$800 million,
                          full-year 2005                 US $600 million
                                                         fiscal-year 2006

      SHARES OUTSTANDING  161,654,024                    640,655,416

             R&D EXPENSE  $138.8 million                 AUD$56.7 million,
                                                         US$42.9 including
                                                         capitalized costs

            HEADQUARTERS  Lake Forest, Ill. USA          Melbourne, Australia

               EMPLOYEES  Approx. 13,000                 Approx. 2,000
                          worldwide                      worldwide

             SALES FORCE  Approx. 650 employees          Approx. 200 worldwide

              OPERATIONS  14 manufacturing               Five manufacturing
                          facilities, including          facilities, including
                          Ashland, Ohio; Austin,         Mulgrave, Australia;
                          Texas; Buffalo, N.Y.;          Boulder, Colo.;
                          Clayton, N.C.;                 Wasserburg, Germany;
                          McPherson, Kan.;               Aguadilla, Puerto
                          Morgan Hill, Calif.;           Rico; Salisbury,
                          Rocky Mount, N.C.;             Australia; and a
                          North Chicago, Ill.;           joint venture in
                          the Dominican Republic;        Ahmedabad, India
                          Costa Rica; Liscate, Italy;    (under construction)
                          Montreal, Canada; and
                          Donegal and Sligo, Ireland

                OVERVIEW  Hospira is a leader            Mayne Pharma is an
                          in the manufacture and         international leader
                          supply of a broad range        in generic and
                          of hospital products           specialty
                          including:                     pharmaceuticals,
                          - Specialty injectables        focusing on
                            (primarily generic           oncology and the
                            acute-care injectables)      medications used in
                          - Medication management        the treatment of
                            systems (including           cancer. The company
                            electronic infusion          also offers contract
                            pumps and safety             manufacturing
                            software)                    services for some
                          - Infusion therapy             of the world's
                            solutions/supplies           largest
                          - Sedation/anesthesia          pharmaceutical
                            products                     companies.
                          - Third-party injectable
                            contract manufacturing

       MARKET LEADERSHIP  In the United States:          Generic injectables:
                          - # 1 in generic injectables   - # 1 in Australia
                          - # 1 in patient-controlled    - # 1 in Europe with
                            analgesia devices              leading positions
                          - # 1 in contract                in Belgium, Italy
                            manufacturing                  and the United
                          - # 2 in medication              Kingdom
                            management systems           - # 2 in generic
                            (infusion pumps)               injectables in
                          - # 2 in infusion therapy        Canada
                                                         - Established
                                                           presence in the
                                                           United States

       THERAPEUTIC AREAS  Hospira offers more            Mayne Pharma offers
                          than 130 generic               an extensive range
                          injectable products            of more than
                          in more than 600 dosages       150 medications in
                          and formulations.              multiple
                          Product areas include          presentations and
                          anti-infectives, analgesics,   strengths. Product
                          anesthesia, cardiovascular,    areas include
                          emergency and other            oncology,
                          therapeutic segments.          anti-infectives and
                                                         pain management and
                                                         other therapeutic

    INJECTABLES PIPELINE  At the end of 2005,            Mayne Pharma
                          Hospira had 46 products        currently has
                          in development representing    46 molecules
                          30 compounds, up from          in its product
                          36 products in                 pipeline.
                          development in 2004
                          and less than a handful
                          prior to the spin.

    * All Hospira financial figures in U.S. dollars
    + Proforma, Australia GAAP

Source: Hospira

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