Forest Laboratories, Inc. and Clinical Data, Inc. today announced that they have entered into a definitive merger agreement pursuant to which Forest will acquire specialty pharmaceutical company Clinical Data for $30 per share in cash—plus contingent consideration of up to $6 per share that may be paid upon achievement of certain commercial milestones related to Viibryd.
The transaction, which was approved by the boards of both companies and is expected to be completed in the second quarter of 2011, subject to customary closing conditions, will allow Forest to leverage its existing presence in the antidepressant category through the launch of Viibryd (vilazodone HCL tablets). Viibryd, a selective serotonin reuptake inhibitor and a 5-HT1A receptor partial agonist, was developed by Clinical Data and approved by the FDA on Jan. 21, 2011 for the treatment of adults with major depressive disorder (MDD).
Click here to read Behavioral Healthcare's first coverage on Viibryd.
Forest plans to launch Viibryd in the U.S. during the second half of 2011. Viibryd is expected to retain market exclusivity until March 2020 including full patent term extension of its composition of matter patent and anticipated pediatric exclusivity. Other patents may further extend this period. According to Howard Solomon, chairman, CEO and president of Forest Laboratories, the company is uniquely positioned to bring Viibryd to market in light of its "long and successful experience of clinical development and expertise in the antidepressant market," and the transaction is "consistent with our strategy to acquire new products that will help offset the loss of revenues due to patent expiries." "Viibryd will be the second new product that we expect to launch this year in addition to Teflaro," noted Solomon. "In addition, we are hopeful to obtain FDA approval later this quarter for Daxas (roflumilast), for the treatment of COPD. We plan to submit New Drug Applications for aclidinium and linaclotide in the second half of this year and for two additional products in calendar 2012.” The launch of Viibryd will require significant incremental marketing and sales investment, including a planned sales force expansion. Additional sales resources will be necessary in order to adequately support Viibryd, as well as our currently marketed products Teflaro, Savella, Bystolic, Namenda and Lexapro and the anticipated launch of Daxas (roflumilast), pending FDA approval in calendar 2011.
In addition, the transaction brings to Forest Stedivaze (apadenoson), a potent agonist of the adenosine A2A receptor subtype with improved selectivity for this receptor over other subtypes (A1 and A2B). Stedivaze is a coronary vasodilator in Phase III development as a pharmacologic stress agent for radionuclide myocardial perfusion imaging (MPI).
The upfront consideration of $30 per share represents a 6.6 percent premium to the volume-weighted average trading price of CLDA stock since the first trading day after the company announced the approval of Viibryd, and that it was considering a potential change of control transaction and a 19.2 percenrt premium of the closing price on that day and totals $1.2 billion on a fully diluted basis, net of net cash acquired. Forest will finance the transaction with existing cash.
Under the terms of the definitive merger agreement, it is anticipated that Forest will promptly commence a cash tender offer to purchase all of the outstanding shares of Clinical Data common stock for $30 per share in cash and the non-transferable contractual right that could deliver up to an additional $6 per share in cash if U.S. net sales of Viibryd over four consecutive fiscal quarters commencing from the date of the closing of the transaction reach or exceed $800 million within the first five years, $1.1 billion within the first six years and $1.5 billion within the first seven years.