- CORNERSTONE GAINS EXCLUSIVE 10-YEAR LICENSE FOR U.S. COMMERCIAL
RIGHTS TO MARKETED RESPIRATORY DRUG, CUROSURF(R), AND RECEIVES CASH
PROCEEDS OF $15.5 MILLION CARY, N.C., May 7 /PRNewswire-FirstCall/
-- Cornerstone Therapeutics Inc. (Nasdaq CM: CRTX), a specialty
pharmaceutical company focused on acquiring, developing and
commercializing prescription medications primarily for respiratory
indications, today announced a strategic transaction with Chiesi
Farmaceutici SpA, a leading European pharmaceutical company
headquartered in Parma, Italy, valued at $70 million, based on the
10-day average closing share price of Cornerstone. Under the terms
of the agreement, Cornerstone will issue 11.9 million shares of
common stock and receive an exclusive 10-year license with
renewable rights for the U.S. commercial rights to Chiesi's
Curosurf(R) product, the world leading treatment approved by the
U.S. Food and Drug Administration (FDA) for Respiratory Distress
Syndrome (RDS) in premature infants, and $15.5 million in cash.
Cornerstone will also receive first right of offer on all new
products and technology Chiesi intends to market in the U.S. This
transaction enables Cornerstone to: -- Further diversify its
revenue base by adding an FDA approved marketed product, Curosurf,
with a leading market position and a proprietary manufacturing
process; -- Broaden its respiratory therapeutic reach and customer
base; -- Strengthen the Company's balance sheet; enabling
Cornerstone to accelerate the development of its existing product
pipeline, evaluate additional opportunities to enhance its product
portfolio and support further growth in its sales force to expand
reach; and -- Establish a long-term relationship with a leading
European pharmaceutical company with the first right of offer on
all products Chiesi intends to commercialize in the U.S. As part of
the transaction, Craig Collard, Cornerstone's President and CEO,
and Steven Lutz, Cornerstone's Executive Vice President,
Manufacturing and Trade, have agreed to sell an aggregate of 1.6
million shares to Chiesi at $5.50 per share. The combined number of
common shares held by Chiesi, after giving effect to the purchase
of the 1.6 million common shares and the issuance of approximately
11.9 million common shares, will be approximately 13.5 million
shares, or approximately 51 percent of Cornerstone's fully diluted
common shares outstanding. Curosurf, which is a natural lung
surfactant, is currently available in over 50 countries, including
the U.S. and most of Europe, and has been administered to
approximately 1,000,000 infants since 1992. In the U.S., Curosurf
is indicated for the treatment of RDS in premature infants. RDS is
one of the most common lung disorders in premature babies. It
affects about 10 of every 100 premature infants in the U.S., or
about 40,000 babies, each year. RDS can lead to serious
complications and is one of the most common causes of neonatal
mortality. For 2008, Curosurf's U.S. net sales were over $30
million. The drug currently maintains 44 percent market share in
the U.S., more than 80 percent market share in Europe and 59
percent market share worldwide. "We believe this is a truly
transformative transaction for Cornerstone, providing us with a
market leading proprietary respiratory product, significant capital
and access to future products in our core therapeutic area at our
discretion," said Mr. Collard. "Curosurf is an excellent product
with a world leading market position, strong brand recognition, a
proprietary manufacturing process, and solid growth potential.
Adding $15.5 million to our balance sheet supports the continuing
development of our existing product pipeline and will allow us to
grow our sales organization to better position us for growth with
our current and future products. We will also be in a good position
to evaluate and execute on opportunities to acquire or in-license
other high-quality respiratory drugs. This agreement provides us
with the opportunity to work closely with Chiesi, one of Europe's
most highly-respected and successful pharmaceutical companies, and
achieves our stated goal of making a significant product
acquisition in 2009 and increasing our penetration in the
respiratory market." "Our investment in Cornerstone demonstrates
our confidence in their ability to continue growing their business
in an efficient and strategic manner," said Alberto Chiesi,
Chiesi's President & CEO. "Moreover, as the respiratory
therapeutic space represents approximately 46 percent of our
business, we are pleased to establish a relationship with a company
with the good respiratory expertise that Cornerstone possesses. We
believe this agreement has the potential to meaningfully increase
our footprint in the U.S., the world's largest pharmaceutical
market." The closing of the transaction is subject to the approval
of Cornerstone's stockholders, receipt of regulatory approvals and
other customary closing conditions. The parties anticipate that the
stockholders' meeting will be held in the third quarter of 2009.
The board of directors of each company has approved the agreements.
Houlihan Lokey served as financial advisor to Cornerstone, and
Clifford Chance US LLP provided legal counsel to Cornerstone.
Morgan, Lewis & Bockius LLP provided legal counsel to Chiesi.
Cornerstone will provide further details on this transaction during
today's previously scheduled earnings conference call, which will
begin at 8:30 AM ET. To participate in the live conference call,
please dial 866-783-2137 (U.S. callers) or 857-350-1596
(international), and provide passcode 84050385. A live webcast of
the call will also be available through the Investor Relations
section of the Company's Web site. Please allow extra time prior to
the webcast to register, download and install any necessary audio
software. The webcast will be archived for 30 days, and a telephone
replay of the call will be available for seven days, beginning
today at 11:30 AM ET at 888-286-8010 (U.S. callers) or 617-801-6888
(international), and provide passcode 21539068. About Cornerstone
Therapeutics Cornerstone Therapeutics Inc. (Nasdaq CM: CRTX),
headquartered in Cary, N.C., is a specialty pharmaceutical company
focused on acquiring, developing and commercializing products
primarily for the respiratory and related markets. The Company
currently promotes multiple marketed products in the United States
to respiratory-focused physicians and key retail pharmacies with
its specialty sales force. The Company also has a late-stage
clinical pipeline with five regulatory approval submissions
targeted within the next three years. Key elements of the Company's
strategy are to in-license or acquire rights to underpromoted,
patent-protected, branded respiratory or related pharmaceutical
products, or late-stage product candidates; implement life cycle
management strategies to maximize the potential value and
competitive position of the Company's currently marketed products,
newly acquired products and product candidates that are currently
in development; grow product revenue through the Company's
specialty sales force which is focused on the respiratory and
related markets; and maintain and strengthen the intellectual
property position of the Company's currently marketed products,
newly acquired products and product candidates About Chiesi Founded
in Italy in 1935, Chiesi sells its products across five continents
via 22 direct affiliates, and maintains three manufacturing plants
and three research centers. In 2008, Chiesi achieved revenues of
748 million Euro (up 14.3% over 2007) and its investments in
research totaled 108 million Euro, representing 14.4% of
consolidated sales. Chiesi employs over 3,200 people, including
over 300 in R&D. In addition, Chiesi maintains global alliances
with some of the world's leading pharmaceutical companies,
including Takeda Pharmaceuticals, Tanabe Seiyaku, 3M, Abbott, GSK,
Novartis, Nycomed, and Pfizer. Safe Harbor Statement Statements in
this press release regarding the proposed transaction between
Chiesi and the Company; the benefits and synergies of the
transaction; the progress and timing of our product development
programs and related trials; our future opportunities; our
strategy, future operations, financial position, future revenues
and projected costs; our management's prospects, plans and
objectives; and any other statements about management's future
expectations, beliefs, goals, plans or prospects constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Any statements that are
not statements of historical fact (including, without limitation,
statements containing the words "anticipate," "believe," "could,"
"estimate," "expect," "intend," "may," "plan," "should," "target,"
"will," "would," and similar expressions) should also be considered
to be forward-looking statements. There are a number of important
factors that could cause our actual results or events to differ
materially from those indicated by such forward-looking statements,
including the ability to consummate the transaction; the expected
timeline for completing the transaction; our ability to develop and
maintain the necessary sales, marketing, supply chain, distribution
and manufacturing capabilities to commercialize our products,
including difficulties relating to the manufacture of ZYFLO CR(R)
tablets; the possibility that the FDA will take enforcement action
against us or one or more of our marketed drugs that do not have
FDA-approved marketing applications; patient, physician and
third-party payor acceptance of our products as safe and effective
therapeutic products; our heavy dependence on the commercial
success of a relatively small number of currently marketed
products; our ability to obtain and maintain regulatory approvals
to market and sell our products that do have FDA approved marketing
applications; our ability to enter into additional strategic
licensing, collaboration or co-promotion transactions on favorable
terms, if at all; our ability to maintain compliance with Nasdaq
listing requirements; adverse side effects experienced by patients
taking our products; difficulties relating to clinical trials,
including difficulties or delays in the completion of patient
enrollment, data collection or data analysis; the results of
preclinical studies and clinical trials with respect to our
products under development and whether such results will be
indicative of results obtained in later clinical trials; our
ability to satisfy FDA and other regulatory requirements; our
ability to obtain, maintain and enforce patent and other
intellectual property protection for our products and product
candidates; and the other factors described in Item 1A (Risk
Factors) of our Annual Report on Form 10K, filed with the
Securities and Exchange Commission (the SEC) on March 26, 2009, and
other filings that we make with the SEC. If one or more of these
factors materialize, or if any underlying assumptions prove
incorrect, our actual results, performance or achievements may vary
materially from any future results, performance or achievements
expressed or implied by these forward-looking statements. In
addition, the statements in this press release reflect our
expectations and beliefs as of the date of this release. We
anticipate that subsequent events and developments will cause our
expectations and beliefs to change. However, while we may elect to
update these forward-looking statements publicly at some point in
the future, we specifically disclaim any obligation to do so,
whether as a result of new information, future events or otherwise.
Our forward-looking statements do not reflect the potential impact
of any future acquisitions, mergers, dispositions, business
development transactions, joint ventures or investments that we may
make. These forward-looking statements should not be relied upon as
representing our views as of any date after the date of this
release. Important Information Cornerstone will file a proxy
statement and other documents regarding the transaction described
in this press release with the SEC. Investors and security holders
are urged to read the proxy statement carefully when it becomes
available, because it will contain important information about
Cornerstone and the transaction. A definitive proxy statement will
be sent to stockholders of Cornerstone seeking their approval of
the transaction. Investors and security holders may obtain a free
copy of the definitive proxy statement (when available) and other
documents filed by Cornerstone with the SEC at the SEC's website at
http://www.sec.gov/ or from Cornerstone's website at
http://www.crtx.com/. The definitive proxy statement and other
relevant documents may also be obtained free of cost by directing a
request to Cornerstone Therapeutics Inc., 1255 Crescent Green
Drive, Suite 250, Cary, North Carolina 27518, attention: Chief
Financial Officer. Participants in Solicitation Cornerstone and its
directors, members of management and other employees may be deemed
to be participants in the solicitation of proxies from the
stockholders of Cornerstone in connection with the transaction.
Information about Cornerstone and its directors and executive
officers can be found in Cornerstone's Proxy Statement and Annual
Report on Form 10-K for the year ended December 31, 2008 previously
filed with the SEC. Additional information regarding the interests
of those persons may be obtained by reading the proxy statement
relating to the transaction when it becomes available. ZYFLO CR(R)
is a trademark of Cornerstone Therapeutics Inc. Curosurf(R) is a
trademark of Chiesi Farmaceutici SpA. DATASOURCE: Cornerstone
Therapeutics Inc. CONTACT: Investor Relations: Evan Smith, , or
Brian Ritchie, , both at +1-212-850-5600, or Media Relations:
Robert Stanislaro, +1-212-850-5600, or , all of FD, for Cornerstone
Therapeutics Inc. Web Site: http://www.crtx.com/
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