Eisai Co., Ltd. (TSE: 4523.JP) ("Eisai”),
a research-based human health care (hhc) company that focuses on
neurology, gastrointestinal disorders, oncology and critical care, and
MGI PHARMA, Inc. (NASDAQ: MOGN) ("MGI PHARMA”),
an oncology and acute care focused biopharmaceutical company, today
announced that they have entered into a definitive merger agreement
under which Eisai would acquire all of the outstanding shares of MGI
PHARMA for US$41.00 per share in an all cash transaction, for a total
consideration of approximately $3.9 billion.
The merger agreement has been unanimously approved by the MGI PHARMA
Board of Directors. The acquisition is expected to occur by means of a
tender offer followed by a cash merger, is subject to customary closing
conditions and regulatory approvals, and is expected to be completed
during the first quarter of 2008.
Eisai expects MGI PHARMA’s marketed and
pipeline products in oncology and acute care, as well as its R&D and
commercial capabilities, including field sales specialists, together
with Eisai’s existing oncology products,
global infrastructure and R&D capabilities, will create a base for
continued sales growth, pipeline enhancement and the opportunity for
synergies. Eisai expects that this transaction will enable it to grow
further in the U.S. market and strengthen its already-focused oncology
business platform. Following the completion of the transaction, Eisai
anticipates that the transaction will be accretive to its cash EPS
(excluding goodwill amortization) in fiscal year 2008 and GAAP EPS in
fiscal 2009.
"The Board of Directors of MGI PHARMA, working with our legal and
financial advisors, has been reviewing strategic alternatives for the
company for the past several months," said Mr. Lonnie Moulder, President
and CEO of MGI PHARMA. "During that time, we have had the opportunity to
share the MGI PHARMA vision and business opportunity with many of the
leading companies in the pharmaceutical and biotechnology industry. This
transaction represents the successful conclusion of that process. Our
Board of Directors and the management team are extremely pleased to
announce this transaction and the opportunity to continue to bring
important therapies to patients."
Mr. Haruo Naito, President and CEO of Eisai, said, "Eisai
has enormous respect for MGI PHARMA’s
products, pipeline and people, and we look forward to working with their
highly skilled team to address the unmet medical needs of patients
throughout the world. Strategically, we expect this transaction to allow
Eisai to significantly strengthen its oncology business and increase the
likelihood of achieving our current strategic plan targets and our
future revenue and earnings growth.”
Under Eisai’s "Dramatic
Leap Plan” (DLP), its fifth midterm
strategic plan which spans from April 1, 2006 to March 31, 2012, Eisai
has continued to achieve steady growth in all regions, including Japan,
the United States, Europe and Asia, with a special focus on integrative
oncology, where tremendous unmet medical needs exist. Eisai has
strengthened its oncology research and development and marketing
infrastructure in the United States through the October 2006 acquisition
of four oncology products and specialists’
know-how from Ligand Pharmaceuticals and the April 2007 acquisition of
Morphotek, Inc., a biopharmaceutical company specializing in the
development of protein and antibody gene evolution technology. In
addition, Eisai is building a new oncology facility for manufacturing
and formulation R&D at its North Carolina site.
The Transaction
The acquisition is structured as an all cash tender offer for all
outstanding shares of MGI PHARMA common stock followed by a merger in
which each remaining share of MGI PHARMA would be converted into the
same US$41.00 cash per share price paid in the tender offer, except for
shares held by stockholders who exercise appraisal rights. The
acquisition is subject to the satisfaction of customary conditions,
including the tender of a majority of the outstanding MGI PHARMA shares
on a fully-diluted basis and the expiration or earlier termination of
the Hart-Scott-Rodino waiting period and other regulatory approvals. The
tender offer will be subject to the U.S. securities laws and applicable
U.S. state laws.
To effect the transaction, Eisai has established an acquisition
subsidiary, Jaguar Acquisition Corp., which is wholly-owned by Eisai
Corporation of North America (Woodcliff Lake, NJ). Subsequent to the
completion of the tender offer, Jaguar Acquisition Corp. will be merged
into MGI PHARMA and the combined entity will then become a wholly-owned
subsidiary of Eisai Corporation of North America.
Eisai intends to finance the acquisition through existing internal
financial resources, as well as bank loan financing, and has secured
commitment for the debt required to consummate the transaction.
The acquisition price represents a premium of approximately 38.7% to MGI
PHARMA’s closing share price of $29.55 on
November 28, 2007, the last business day prior to MGI PHARMA’s
announcement that it was exploring strategic alternatives.
The acquisition will be effected pursuant to a merger agreement. The
merger agreement contains certain termination rights for each of MGI
PHARMA and Eisai and further provides that, upon termination of the
merger agreement under specified circumstances, MGI PHARMA may be
required to pay Eisai a termination fee of $129 million.
JPMorgan acted as exclusive financial advisor to Eisai, and Sullivan &
Cromwell LLP is acting as legal counsel to Eisai. Lehman Brothers, Inc.
acted as exclusive financial advisor to MGI PHARMA in its review of
strategic alternatives, and Hogan & Hartson LLP is acting as legal
counsel to MGI PHARMA.
Important Additional Information Will be Filed with the Securities
and Exchange Commission ("SEC”)
The tender offer described in this news release has not yet commenced,
and this news release is neither an offer to purchase nor a solicitation
of an offer to sell shares of MGI PHARMA’s
common stock. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ BOTH THE
TENDER OFFER STATEMENT AND THE SOLICITATION/RECOMMENDATION STATEMENT
REGARDING THE TENDER OFFER WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION. The tender offer statement will be filed
by Jaguar Acquisition Corp. with the SEC, and the
solicitation/recommendation statement will be filed by MGI PHARMA with
the SEC. Investors and security holders may obtain a free copy of these
statements (when available) and other documents filed by such subsidiary
or MGI PHARMA with the SEC at the website maintained by the SEC at www.sec.gov.
The tender offer statement and related materials,
solicitation/recommendation statement, and such other documents may be
obtained for free by directing such requests to Georgeson, Inc., the
information agent for the tender offer, at 1-212-440-9800 for banks and
brokers or 1-888-605-7543 for all others.
About Eisai Co., Ltd.
Eisai Co., Ltd. is a research-based human health care (hhc)
company that discovers, develops and markets products throughout the
world. Eisai focuses its efforts in three therapeutic areas: integrative
neuroscience, including neurology and psychiatric medicines;
gastrointestinal disorders; and integrative oncology, including
oncotherapy and supportive-care treatments. Through a global network of
research facilities, manufacturing sites and marketing affiliates, Eisai
actively participates in all aspects of the worldwide healthcare system.
Eisai forecasts group sales of 739 billion
Yen in FY2007. More than 50%
of the group sales are derived from businesses outside of Japan.
About Eisai Corporation of North America
Eisai Corporation of North America is a wholly-owned subsidiary of Eisai
Co., Ltd. and supports the activities of its operating companies in
North America. These operating companies include: Eisai Research
Institute of Boston, Inc., a discovery operation with strong organic
chemistry capabilities; Morphotek, Inc., a biopharmaceutical company
specializing in the development of therapeutic monoclonal antibodies;
Eisai Medical Research Inc., a clinical development group; Eisai Inc., a
commercial operation with manufacturing and marketing/sales functions;
and Eisai Machinery U.S.A., which markets and maintains pharmaceutical
manufacturing machinery.
About MGI PHARMA
MGI PHARMA, INC. is a biopharmaceutical company focused in oncology and
acute care that acquires, researches, develops and commercializes
proprietary products that address the unmet needs of patients. MGI
PHARMA markets Aloxi®
(palonosetron hydrochloride) Injection, Dacogen®
(decitabine) for Injection, and Gliadel®
Wafer (polifeprosan 20 with carmustine implant) in the United States.
MGI PHARMA directly markets its products in the U.S. and collaborates
with partners to reach international markets. For more information about
MGI PHARMA, please visit www.mgipharma.com.
Safe Harbor Statement
Certain statements contained in this news release, including without
limitation expectations as to future sales and operating results,
constitute "forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements in this press release include
statements regarding the anticipated benefits of the transaction;
statements regarding the anticipated timing of filings and approvals
relating to the transaction; statements regarding the expected timing of
the completion of the transaction; and any statements of assumptions
underlying any of the foregoing. Words such as "expects,” "anticipates,” "believes,” "plans,” "intends,” "estimates,” "projects,” "forecasts,” "outlook,”
and similar expressions are also intended to identify forward-looking
statements. The statements involve known and unknown risks,
uncertainties, and other factors which may cause the company’s
actual results, earnings, performance, or achievements to be materially
different from any future results, performance, or achievements
expressed or implied by such forward-looking statements. Such factors
include, but are not limited to, the following: general industry and
market conditions, general domestic and international economic
conditions such as interest rate and currency exchange fluctuations,
technological advances and patents attained by competitors, challenges
inherent in new product development and clinical trials, claims and
concerns about product safety and efficacy, obtaining regulatory
approvals, domestic and foreign healthcare reforms, trends toward
managed care and healthcare cost containment, laws and regulations
affecting domestic and foreign operations, inability to build production
capacity to meet demand, unavailability of raw materials, and failure to
gain market acceptance or third-party consents. Risks and uncertainties
that could cause results to differ from expectations also include:
uncertainties as to the timing of the tender offer and merger;
uncertainties as to how many MGI PHARMA stockholders will tender their
stock in the offer; the risk that competing offers will be made; and the
possibility that various closing conditions for the transaction may not
be satisfied or waived, including that a governmental entity may
prohibit, delay or refuse to grant approval for the consummation of the
transaction. We will not undertake and specifically decline any
obligation to update or correct any forward-looking statements to
reflect events or circumstances after the date of such statements or to
reflect the occurrence of anticipated or unanticipated events.
