EVENTS | VIEW CALENDAR
Cornerstone, EKR Therapeutics ink definitive merger agreement
CARY, N.C.—Cornerstone Therapeutics Inc. and EKR Therapeutics, Inc. have announced the signing of a definitive merger agreement by which Cornerstone will acquire privately held EKR, a specialty pharmaceutical company that specializes in the acute-care hospital setting. EKR's board of directors has approved the merger and recommended it to the company's shareholders.
Per the terms of the definitive merger agreement, Cornerstone will pay EKR approximately $125 million in cash initially, subject to adjustment in accordance with the terms of the agreement. Cornerstone will also make additional payments if certain milestones are met with regards to regulatory approval for a new active ingredient supplier for RETAVASE and sales of RETAVASE during roughly the first three years following commercial re-launch. According to the agreement, a new, wholly owned subsidiary of Cornerstone will merge with and into EKR, and EKR will continue after the merger as the surviving organization and a wholly owned subsidiary of Cornerstone.
"This transaction brings Cornerstone critical mass in the hospital-based therapeutics area and represents a major step forward in our strategy to focus on the hospital channel," Craig A. Collard, CEO of Cornerstone, said in a press release. "With a significantly expanded product portfolio and larger sales and additional account management infrastructure, we believe we have enhanced our platform to drive future growth."
As part of the deal, Cornerstone will acquire the product rights to CARDENE I.V., indicated for the short-term treatment of hypertension when oral therapy is not ideal, and RETAVASE, indicated for use in the management of acute myocardial infarction (AMI) in adults, for improving ventricular function post-AMI, the reduction of the incidence of congestive heart failure and reduction of AMI-associated mortality. Cornerstone will be seeking U.S. Food and Drug Administration approval for a new active ingredient supplier and re-launch of RETAVASE in 2013.
"The successful launch of CARDENE I.V., and development successes of RETAVASE have been great achievements for EKR," John E. Bailye, CEO of EKR, said in a press release. "We are very proud of the work our employees have done, particularly our sales organization, who has established CARDENE I.V. as an important hospital franchise. We are pleased that Cornerstone recognizes the value of our business and look forward to their success in progressing these products, which will benefit clinicians and the patients they serve."
"We plan to pursue additional hospital product licensing opportunities and company acquisitions that complement our enhanced hospital presence," Collard added. "We believe this strategy will position Cornerstone for growth and bring the company to the next level of value creation."
Cornerstone brought on Stifel Nicolaus Weisel as its financial advisor in conjunction with the transaction, and brought on Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P. as its legal advisor. EKR brought on Lazard as its financial advisor for the deal and Foley & Lardner LLP as its legal advisor.
The transaction is subject to customary closing conditions, including adoption of the merger agreement by EKR's shareholders and expiration of any waiting period under U.S. anti-trust laws. The transaction is expected to close in June.
SOURCE: Cornerstone Therapeutics press release