Table of Contents
• | $58.00 in cash, without interest; | |
• | 0.2617 of a share of common stock of Celgene; and | |
• | one contingent value right, or CVR, issued by Celgene. |
Table of Contents
Table of Contents
Abraxis BioScience, Inc. 11755 Wilshire Boulevard, Suite 2000 Los Angeles, California 90025 Attention: Investor Relations Telephone Number:(310) 883-1300 www.abraxisbio.com | Celgene Corporation 86 Morris Avenue Summit, New Jersey 07901 Attention: Investor Relations Telephone Number: (908) 673-9000 www.celgene.com |
Table of Contents
Page | ||||
iii | ||||
1 | ||||
14 | ||||
17 | ||||
19 | ||||
20 | ||||
21 | ||||
22 | ||||
31 | ||||
32 | ||||
36 | ||||
37 | ||||
37 | ||||
43 | ||||
47 | ||||
58 | ||||
60 | ||||
66 | ||||
67 | ||||
67 | ||||
68 | ||||
68 | ||||
68 | ||||
68 | ||||
68 | ||||
68 | ||||
68 | ||||
69 | ||||
69 | ||||
69 | ||||
70 | ||||
71 | ||||
75 | ||||
77 | ||||
77 | ||||
78 | ||||
79 | ||||
80 | ||||
81 | ||||
82 | ||||
82 | ||||
83 | ||||
84 | ||||
85 | ||||
86 |
Table of Contents
Page | ||||
86 | ||||
86 | ||||
87 | ||||
88 | ||||
88 | ||||
88 | ||||
88 | ||||
88 | ||||
89 | ||||
89 | ||||
90 | ||||
90 | ||||
90 | ||||
92 | ||||
93 | ||||
94 | ||||
94 | ||||
94 | ||||
95 | ||||
96 | ||||
96 | ||||
96 | ||||
97 | ||||
97 | ||||
98 | ||||
100 | ||||
100 | ||||
101 | ||||
101 | ||||
102 | ||||
106 | ||||
110 | ||||
122 | ||||
122 | ||||
122 | ||||
123 | ||||
A-1 | ||||
B-1 | ||||
C-1 | ||||
D-1 | ||||
E-1 | ||||
F-1 | ||||
G-1 | ||||
H-1 |
ii
Table of Contents
Q: | Why am I receiving this document? | |
A: | Celgene and Abraxis have agreed to the merger, pursuant to which Abraxis will become a direct or indirect wholly-owned subsidiary of Celgene and will cease to be a publicly held corporation. In order for the companies to complete the merger, the holders of a majority of the outstanding shares of Abraxis common stock must vote to adopt the merger agreement. Abraxis is holding a special meeting of stockholders solely to obtain such stockholder approval. | |
This document is being delivered to you as both a proxy statement of Abraxis and a prospectus of Celgene in connection with the merger. It is the proxy statement by which the Abraxis board of directors is soliciting proxies from you to vote on the adoption of the merger agreement at the special meeting or at any adjournment or postponement of the special meeting. It is also the prospectus by which Celgene will issue Celgene common stock and contingent value rights, which we refer to as CVRs, to you in the merger. | ||
Q: | What is the proposed transaction for which I am being asked to vote? | |
A: | You are being asked to adopt the merger agreement providing for the acquisition of Abraxis by Celgene upon the terms and conditions of the merger agreement described in this proxy statement/prospectus, which is attached as Annex A to this proxy statement/prospectus. This proxy statement/prospectus contains important information about the merger, including the special meeting of the stockholders of Abraxis. You should read it carefully and in its entirety. | |
Q: | If the merger is completed, what will I receive for my shares of Abraxis common stock? | |
A: | Upon completion of the merger, each share of Abraxis common stock that is issued and outstanding (other than those for which appraisal rights are validly perfected or owned by Celgene or merger sub or any wholly-owned subsidiary of Celgene or Abraxis) will be cancelled and converted into the right to receive (1) $58.00 in cash, without interest, (2) 0.2617 of a share of Celgene common stock and (3) one CVR. We refer to the consideration payable in the merger described in clauses (1), (2) and (3) together as the merger consideration. See “The Merger Agreement — Merger Consideration” and “The Merger Agreement — Treatment of Abraxis Stock Options and Other Equity Awards.” | |
Q: | How did you determine the merger consideration to be paid to holders of Abraxis common stock? | |
A: | The merger consideration was determined as a result of arm’s length negotiations between the management of Abraxis and its board of directors, on the one hand, and the management of Celgene and its board of directors, on the other hand. |
iii
Table of Contents
Q: | What will happen to Abraxis as a result of the merger? | |
A: | The acquisition of Abraxis by Celgene will be accomplished through a merger of merger sub, with and into Abraxis, with Abraxis surviving the merger as a subsidiary of Celgene. As a result of the merger, Abraxis common stock will be cancelled and delisted from The NASDAQ Global Select Market and will no longer be publicly traded. | |
Q: | Why did the Abraxis board of directors approve the merger agreement and the transactions contemplated by the merger agreement, including the merger? | |
A: | To review the Abraxis board of directors’ reasons for recommending and approving the merger agreement and the transactions contemplated by the merger agreement, including the merger, see “The Merger — Reasons for the Merger — Abraxis’ Reasons for the Merger.” | |
Q: | How does the Abraxis board of directors recommend that I vote? | |
A: | After careful consideration, the Abraxis board of directors unanimously recommends that you vote your shares“FOR” the adoption of the merger agreement. | |
Q: | Is the approval of stockholders necessary to adopt the merger agreement? |
A: | Adoption of the merger agreement requires approval of the holders of a majority of the outstanding shares of Abraxis common stock, voting together as a single class. On June 30, 2010, the principal stockholders, who together owned at that date approximately 82.1% of the outstanding shares of Abraxis common stock and approximately 81.9% of the outstanding shares of Abraxis common stock as of September 10, 2010, the record date established for the special meeting, entered into a voting agreement with Celgene and merger sub, under which they agreed, subject to the terms thereof, to vote all of their shares of Abraxis common stock in favor of the approval and adoption of the merger agreement and the transactions contemplated by the merger agreement and against, among other things, any business combination or extraordinary corporate transaction involving Abraxis or any or its subsidiaries, other than the merger or any business combination or transaction with Celgene or any of its affiliates. Each of the principal stockholders also granted an irrevocable proxy to Celgene to vote or execute consents with respect to such principal stockholder’s shares of Abraxis common stock in accordance with the preceding sentence. The voting agreement will terminate upon the earliest to occur of: (1) the completion of the merger, (2) any material amendment to the merger agreement that is adverse to the principal stockholders that has not been approved by them and (3) the termination of the merger agreement in accordance with its terms. A copy of the voting agreement is attached to this proxy statement/prospectus as Annex C. The principal stockholders’ vote will be sufficient under Delaware law to adopt the merger agreement. See “Voting Agreement.” |
Q: | When and where will the special meeting be held? | |
A: | The special meeting is scheduled to be held at 10:00 a.m. local time, on October 13, 2010, at the Fairmont Miramar, 101 Wilshire Boulevard, Santa Monica, California. | |
Q: | Who is entitled to vote at the special meeting? | |
A: | The Abraxis board of directors has fixed September 10, 2010 as the record date for the special meeting. If you were an Abraxis stockholder as of the close of business on the record date, you are entitled to vote your Abraxis shares at the special meeting. | |
Q: | How many votes do I have? |
A: | You are entitled to one vote at the special meeting for each share of Abraxis common stock that you owned as of the record date. As of the close of business on the record date, there were 40,507,552 outstanding shares of Abraxis common stock. As of that date, the principal stockholders owned approximately 81.9% of the outstanding shares of Abraxis common stock. |
Q: | What constitutes a quorum? | |
A: | Stockholders who hold at least a majority of the outstanding shares of Abraxis common stock as of the close of business on the record date must be present, either in person or represented by proxy, in order to constitute a quorum to conduct business at the special meeting. |
iv
Table of Contents
Q: | What is the difference between holding shares as a stockholder of record or in “street name”? | |
A: | If your shares are registered directly in your name with Abraxis’ transfer agent, American Stock Transfer & Trust Company, you are considered, with respect to those shares, the “stockholder of record.” If you are a stockholder of record, this proxy statement/prospectus and the enclosed proxy card have been sent directly to you by Abraxis. | |
If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of shares held in “street name.” This proxy statement/prospectus has been forwarded to you by your broker, bank or other nominee who is considered, with respect to those shares, the stockholder of record. As the beneficial owner of shares held in street name, you have the right to direct your broker, bank or other nominee how to vote your shares by using the voting instruction card provided by your broker, bank or other nominee with this proxy statement/prospectus. If you do not provide instructions on how to vote your shares to your broker, bank or other nominee, your shares will not be voted at the special meeting. This will have the same effect as a vote “AGAINST” the merger agreement. | ||
Q: | How do I vote my shares at the special meeting? | |
A: | If you are entitled to vote at the special meeting and you hold your shares in your own name, you can submit a proxy or vote in person by completing a ballot at the special meeting. However, in order to ensure your vote is counted if you are not able to attend the special meeting, Abraxis encourages you to submit a proxy before the special meeting, even if you plan to attend the special meeting. If you are a stockholder of record, you may submit a proxy for your shares by completing, signing and dating the enclosed proxy card and mailing it in the pre-paid envelope included with these proxy materials. If your shares are held by a broker, bank or other nominee, you may direct your broker, bank or other nominee to submit a proxy card by following the instructions that the broker, bank or other nominee provides to you with these materials. | |
Q: | If my shares are held in “street name” by my broker, will my broker automatically vote my shares for me? | |
A: | No. If your shares are held in an account at a broker, bank or other nominee, you must instruct the broker, bank or other nominee on how to vote your shares by following the instructions that the broker, bank or other nominee provides to you with these materials. | |
Brokers do not have discretionary authority to vote on the proposal to adopt the merger agreement. The broker may still register your shares as being present at the special meeting for purposes of determining a quorum but without your specific authorization, your shares will not be voted in favor of the adoption of the merger agreement or on any other matters over which brokers lack discretionary authority. This is called a broker non-vote. A broker non-vote will have the same effect as a vote “AGAINST” the adoption of the merger agreement. | ||
If you hold shares through a broker, bank or other nominee and wish to vote your shares in person at the special meeting, you must obtain a proxy from your broker, bank or other nominee and present it to the inspector of elections with your ballot when you vote at the special meeting. | ||
Q: | How will my proxy be voted? | |
A: | If you vote by completing, signing, dating and mailing your proxy card or voting instruction card, your shares will be voted in accordance with your instructions. If you are a stockholder of record and you sign, date and return your proxy card but do not indicate how you want to vote or do not indicate that you wish to abstain, your shares will be voted in favor of the adoption of the merger agreement. | |
Q: | As an Abraxis stockholder, what risks should I consider in deciding whether to vote in favor of the merger? | |
A: | You should carefully review the section of this proxy statement/prospectus entitled “Risk Factors,” which sets forth and incorporates by reference certain risks and uncertainties related to the merger and the CVRs, certain risks and uncertainties to which Celgene will be subject following the completion of the merger, and certain risks and uncertainties to which each of Abraxis and Celgene, as an independent company, is subject. |
v
Table of Contents
Q: | Can I attend the special meeting? | |
A: | All Abraxis stockholders as of the close of business on the record date may attend the special meeting by showing photo identification and signing in at the special meeting. If you are a stockholder of record (i.e., your shares are held in your name), you must list your name exactly as it appears on your stock ownership records from American Stock Transfer & Trust Company. If you hold shares through a broker, bank or other nominee, you must also provide a copy of your latest bank or broker statement showing your ownership as of the close of business on the record date. | |
Q: | Can I change my vote after I have submitted a proxy or voting instruction card? | |
A: | Yes. If you are a stockholder of record you can change your vote at any time before your proxy is voted at the special meeting. You can do this in one of three ways: | |
• you can send a signed notice of revocation to the Corporate Secretary of Abraxis; | ||
• you can submit a revised proxy bearing a later date; or | ||
• you can attend the special meeting and vote in person, which will automatically cancel any proxy previously given, or you may revoke your proxy in person, but your attendance alone will not revoke any proxy that you have previously given. | ||
If you choose either of the first two methods, you must submit your notice of revocation or your new proxy no later than the beginning of the special meeting. If you are a beneficial owner of shares held in street name, you may submit new voting instructions by contacting your broker, bank or other nominee. You may also vote in person at the special meeting if you obtain a proxy from your broker, bank or other nominee and present it to the inspectors of election with your ballot when you vote at the special meeting. | ||
Q: | What are the CVRs? | |
A: | The CVRs are contingent value rights to be issued in the merger by Celgene. Each CVR represents the right to receive a pro rata portion of certain cash payments required to be paid by Celgene. Celgene is obligated to make these cash payments: | |
• if certain U.S. regulatory milestones with respect to Abraxane® are achieved; and/or | ||
• if aggregate annual net sales of Abraxane® and those pipeline products described in the definition of “Products” contained in the CVR agreement, which we refer to as the Abraxis pipeline products, exceed $1 billion. | ||
See “Description of the CVRs.” | ||
Q: | Will the merger consideration I receive in the merger increase if the results of operations of Abraxis improve or if the market price of Abraxis common stock increases? | |
A: | No. The merger consideration payable for each share of Abraxis common stock at closing is fixed at (1) $58.00 in cash, without interest, (2) 0.2617 of a share of common stock of Celgene and (3) one CVR, and the payment received at closing will not change regardless of the results of operations of Abraxis or the price of publicly traded common stock of Abraxis. | |
Q: | What happens if the merger is not completed? | |
A: | If the merger agreement is not adopted by Abraxis stockholders or if the merger is not completed for any other reason, you will not receive any payment for your shares of Abraxis common stock in connection with the merger. Instead, Abraxis will remain an independent public company and its common stock will continue to be listed and traded on The NASDAQ Global Select Market. If the merger agreement is terminated under specified circumstances, Abraxis may be required to pay Celgene a fee of $145 million. See “The Merger Agreement — Termination Fees and Expenses.” | |
Q: | When is the merger expected to be completed? | |
A: | Abraxis and Celgene are working hard to complete the merger as quickly as practicable. A number of conditions must be satisfied before we can complete the merger, including the approval of the adoption of the merger |
vi
Table of Contents
agreement by Abraxis stockholders. We anticipate that the merger will close within two business days following the date of the special meeting, if all conditions to the merger (as described under “Merger Agreement — Conditions to the Merger”) are fulfilled or waived on or before the closing date. However, we cannot guarantee the exact timing of the completion of the merger or that the merger will be completed. See “Merger Agreement — Conditions to the Merger.” | ||
Q: | Am I entitled to appraisal rights? | |
A: | Yes. Stockholders who do not vote “FOR” the adoption of the merger agreement and who hold their shares through the completion of the merger will be entitled to seek appraisal rights under Delaware law in connection with the merger so long as they take all the steps required to perfect their rights under Delaware law. See “Rights of Stockholders to Seek Appraisal.” | |
Q: | What are the material U.S. federal income tax consequences to the Abraxis stockholders of the merger? | |
A: | The receipt by a U.S. holder of cash, Celgene common stock and CVRs in exchange for shares of Abraxis common stock pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes (and may also be a taxable transaction under applicable state, local and foreign income or other tax laws). For U.S. federal income tax purposes, a U.S. holder of Abraxis common stock generally will recognize capital gain or loss at the time of the merger equal to the difference, if any, between | |
• the sum of (1) the amount of cash (including any cash received in lieu of fractional shares of Celgene common stock), (2) the fair market value of the Celgene common stock and (3) the fair market value of the CVRs received by the U.S. holder in exchange for such Abraxis common stock; and | ||
• the U.S. holder’s adjusted tax basis in such Abraxis common stock. | ||
Pursuant to the merger agreement and the CVR agreement, the parties to the merger agreement and the CVR agreement have agreed or will agree, as applicable, to treat and report any CVR payments (except to the extent of any imputed interest) for all tax purposes as additional consideration for the sale of Abraxis common stock in the merger, except as required by applicable law. Because individual circumstances may differ, we strongly recommend that you consult your own tax advisors to determine the specific tax consequences to you of the merger. See “Certain Material U.S. Federal Income Tax Consequences.” | ||
Q: | Should I send my Abraxis common stock certificates now? | |
A: | No. After the completion of the merger, you will be sent a letter of transmittal and detailed instructions for exchanging your Abraxis common stock certificates for the merger consideration. | |
Q: | Where can I find more information about Abraxis and Celgene? | |
A: | Abraxis and Celgene file periodic reports and other information with the SEC. You may read and copy this information at the SEC’s public reference facilities. Please call the SEC at1-800-SEC-0330 for information about these facilities. This information is also available on the website maintained by the SEC, at www.sec.gov, and on the appropriate company’s website, at www.abraxisbio.com or www.celgene.com. For a more detailed description of the information available, please see “Where You Can Find More Information.” | |
Q: | Who can help answer my questions? | |
A: | If you have additional questions about the merger after reading this proxy statement/prospectus, or require assistance or need additional copies of this proxy statement/prospectus, please contact: | |
Abraxis BioScience, Inc. Attention: Investor Relations 11755 Wilshire Boulevard, Suite 2000 Los Angeles, California 90025 |
vii
Table of Contents
Summit, New Jersey 07901
Telephone:(908) 673-9000
Los Angeles, California 90025
Telephone:(310) 883-1300
Summit, New Jersey 07901
Telephone:(908) 673-9000
1
Table of Contents
• | Milestone Payment #1. Celgene agreed to pay $250 million upon FDA approval of Abraxane® for use in the treatment of non-small cell lung cancer, which approval permits Celgene to market Abraxane® under a label that includes a progression free survival claim, but only if the foregoing milestone is achieved no later than the fifth anniversary of the merger. | |
• | Milestone Payment #2. Celgene agreed to pay $400 million (if achieved no later than April 1, 2013) or $300 million (if achieved after April 1, 2013 and before the fifth anniversary of the merger) upon FDA approval of Abraxane® for use in the treatment of pancreatic cancer, which approval permits Celgene to market Abraxane® under a label that includes an overall survival claim. | |
• | Net Sales Payments. For each full one-year period ending December 31st during the term of the CVR agreement, which we refer to as a net sales measuring period (with the first net sales measuring period beginning January 1, 2011 and ending December 31, 2011), Celgene agreed to pay: |
• | 2.5% of the net sales of Abraxane® and the Abraxis pipeline products that exceed $1 billion but are less than or equal to $2 billion for such period, plus |
2
Table of Contents
• | an additional amount equal to 5% of the net sales of Abraxane® and the Abraxis pipeline products that exceed $2 billion but are less than or equal to $3 billion for such period, plus | |
• | an additional amount equal to 10% of the net sales of Abraxane® and the Abraxis pipeline products that exceed $3 billion for such period. |
3
Table of Contents
4
Table of Contents
• | severance pay equal to two times the sum of his then-current base salary plus the amount of his most recently established target bonus; | |
• | reimbursement of COBRA premiums for up to eighteen months; and | |
• | life insurance coverage for two years. |
• | the exercise price of the stock option, less | |
• | the per share amount. |
• | an amount in cash, without interest, equal to the excess, if any, of the per share amount over the exercise price of such stock option, and | |
• | one CVR. |
5
Table of Contents
• | the base appreciation amount of the SAR, less | |
• | the per share amount. |
• | an amount in cash, without interest, equal to the excess, if any, of the per share amount over the base appreciation amount of such SAR, and | |
• | one CVR. |
• | cash, without interest, equal to the per share amount, and | |
• | one CVR. |
6
Table of Contents
• | any permanent injunction or other order issued by any governmental entity in the United States, the European Union, Canada or Switzerland is in effect preventing or prohibiting the completion of the merger has become final and non-appealable; or | |
• | Abraxis stockholders do not vote to adopt the merger agreement at the special meeting (including any postponement or adjournment of the special meeting). |
• | if Abraxis breaches or fails to perform any of its representations, warranties, covenants or obligations contained in the merger agreement, which breach or failure to perform results in the conditions described under “The Merger Agreement — Conditions to the Merger” relating to the accuracy of Abraxis’ representations and warranties or the performance of Abraxis’ obligations and covenants in the merger agreement not being able to be satisfied by the termination date; | |
• | if Abraxis breaches or fails to perform in any material respect its obligations with respect to the “no shop” restrictions; or | |
• | prior to the special meeting, if (1) the Abraxis board of directors has publicly withdrawn its approval or recommendation of the merger agreement or the merger or has publicly recommended to Abraxis stockholders any acquisition proposal or (2) a tender offer or exchange offer has been commenced that, if |
7
Table of Contents
successful, would result in any person or group becoming the beneficial owner of 15% or more of Abraxis common stock, and the Abraxis board of directors fails to recommend that Abraxis stockholders not tender their shares in connection with such tender or exchange offer within ten days of the commencement. |
• | if Celgene or merger sub breaches or fails to perform any of its representations, warranties, covenants or obligations contained in the merger agreement, which breach or failure to perform results in the conditions described under “The Merger Agreement — Conditions to the Merger” relating to the accuracy of Celgene’s or merger sub’s representations and warranties or the performance of Celgene’s or merger sub’s obligations and covenants in the merger agreement not being able to be satisfied by the termination date; or | |
• | prior to the special meeting, in order to concurrently enter into a definitive agreement with respect to any superior proposal with a third party if, among other things Abraxis has complied in all material respects with the “no-shop” restrictions of the merger agreement and concurrently pays a termination fee of $145 million to Celgene. |
• | Abraxis terminates the merger agreement, prior to the special meeting, in order to concurrently with such termination enter into a definitive agreement with respect to a superior proposal and has complied in all material respects with the “no shop” restrictions of the merger agreement; | |
• | Celgene terminates the merger agreement if Abraxis breaches or fails to perform in any material respect its obligations under the “no shop” restrictions of the merger agreement, or if prior to the special meeting, (1) the Abraxis board of directors has publicly withdrawn its approval or recommendation of the merger agreement or the merger or has publicly recommended to the stockholders of Abraxis any acquisition proposal, or (2) a tender offer or exchange offer has been commenced that, if successful, would result in any person or group becoming the beneficial owner of 15% or more of the outstanding stock of Abraxis, and the Abraxis board of directors fails to recommend that Abraxis stockholders not tender their shares in connection with such tender or exchange offer within ten business days of the commencement; | |
• | (1) Celgene terminates the merger agreement if Abraxis breaches or fails to perform any of its representations, warranties, covenants or obligations contained in the merger agreement, which breach or failure to perform results in the conditions described in “The Merger Agreement — Conditions to the Merger” relating to the accuracy of Abraxis’ representations and warranties or the performance of Abraxis’ obligations or covenants not being able to be satisfied by the termination date, (2) prior to the date upon which such breach or failure to perform occurs but after the date of the merger agreement, a bona fide acquisition proposal (for the purposes of this definition of acquisition proposal, the references to “15%” will be deemed references to “60%”) for Abraxis has been publicly announced and (3) within 12 months after such termination either Abraxis has entered into a definitive agreement relating to an acquisition proposal or a transaction contemplated by an acquisition proposal for Abraxis has been completed; | |
• | (1) Celgene or Abraxis terminates the merger agreement if the requisite stockholder approval is not obtained at the special meeting (including any postponement or adjournment of the special meeting), (2) prior to the date of the special meeting but after the date of the merger agreement, a bona fide acquisition proposal (for the purposes of this definition of acquisition proposal, the references to “15%” will be deemed references to “60%”) for Abraxis has been publicly announced and (3) within 12 months after such termination either Abraxis has entered into a definitive agreement relating to an acquisition proposal or a transaction contemplated by an acquisition proposal for Abraxis has been completed; or |
8
Table of Contents
• | (1) Celgene or Abraxis terminates the merger agreement if the merger has not been completed on or before the termination date of March 31, 2011, (2) prior to such termination, the waiting period (and any extension thereof) applicable to the merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, which we refer to as the HSR Act, has expired or been terminated, (3) prior to such termination but after the date of the merger agreement, a bona fide acquisition proposal (for the purposes of this definition of acquisition proposal, the references to “15%” will be deemed references to “60%”) for Abraxis has been publicly announced and (4) within 12 months after such termination either Abraxis has entered into a definitive agreement relating to an acquisition proposal or a transaction contemplated by an acquisition proposal for Abraxis has been completed. |
• | the completion of the merger; | |
• | any material amendment to the merger agreement that is adverse to the principal stockholders that has not been approved by them; and | |
• | the termination of the merger agreement in accordance with its terms. |
9
Table of Contents
• | (i) soliciting, knowingly encouraging or inducing any customer, supplier or licensee with whom Abraxis or its subsidiaries were engaged in a contractual relationship, or substantive discussions or proposal negotiations, in each case as of the completion of the merger, with respect to the business to cease doing business with Abraxis, Celgene or any of their subsidiaries with respect to the business in the United States and all other countries in which Abraxis or its subsidiaries were engaged in the business at the completion of the merger; or (ii) otherwise knowingly interfering with Abraxis’, Celgene’s or their respective subsidiaries’ relationship with any customer, supplier or licensee of the business, | |
• | soliciting, encouraging or inducing any employee, consultant or independent contractor that was engaged by Abraxis or its subsidiaries as of the completion of the merger to terminate or breach an employment, contractual or other relationship with Abraxis, Celgene or their respective subsidiaries, and | |
• | making any public statements that directly or indirectly disparage Abraxis, Celgene or any of their respective affiliates, |
10
Table of Contents
• | (A) any assets or businesses of Abraxis or any of its subsidiaries or (B) any assets or businesses of Celgene or any of its affiliates or subsidiaries, in the case of either clause (A) or (B), to the extent that the sale, divestiture, disposition, or agreement would have a material adverse effect on the business, operations, financial condition or results of operations of the combined business of Abraxis and Celgene after giving effect to the completion of merger; or | |
• | Abraxane® to the extent such sale, divestiture, disposition, agreement or restriction would have a material adverse effect on the ability of Abraxis to market Abraxane® in the United States, the European Union, Canada and Switzerland. |
11
Table of Contents
• | the sum of (1) the amount of cash (including any cash received in lieu of fractional shares of Celgene common stock), (2) the fair market value of the Celgene common stock and (3) the fair market value of the CVRs received by the U.S. holder in exchange for such Abraxis common stock; and | |
• | the U.S. holder’s adjusted tax basis in such Abraxis common stock. |
12
Table of Contents
• | adopts and implements a procedure or process to obtain the highest possible price for stockholders; | |
• | discloses all material information to stockholders regarding the merger; and | |
• | institutes a majority of the minority vote provision. |
13
Table of Contents
Six Months Ended | ||||||||||||||||||||||||||||
June 30, | Year Ended December 31, | |||||||||||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||||||||
(Unaudited) | (In thousands, except per share data) | |||||||||||||||||||||||||||
Consolidated and Combined Statement of Operations Data: | ||||||||||||||||||||||||||||
Abraxane revenue | $ | 170,008 | $ | 145,773 | $ | 314,545 | $ | 335,631 | $ | 324,692 | $ | 174,906 | $ | 133,731 | ||||||||||||||
Other Products | 69,225 | 7,938 | 36,686 | 1,770 | 1,269 | — | — | |||||||||||||||||||||
Other revenue | 6,892 | 4,000 | 7,819 | 7,908 | 7,725 | 7,381 | 1,944 | |||||||||||||||||||||
Net revenue | 246,125 | 157,711 | 359,050 | 345,309 | 333,686 | 182,287 | 135,675 | |||||||||||||||||||||
Cost of sales | 72,740 | 23,743 | 63,665 | 39,068 | 34,450 | 21,183 | 24,066 | |||||||||||||||||||||
Gross profit | 173,385 | 133,968 | 295,385 | 306,241 | 299,236 | 161,104 | 111,609 | |||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||
Research and development | 69,334 | 71,742 | 154,615 | 98,976 | 85,424 | 63,073 | 50,121 | |||||||||||||||||||||
Selling, general and administrative | 110,273 | 92,695 | 200,734 | 221,418 | 233,324 | 119,462 | 69,239 | |||||||||||||||||||||
Reacquisition costs | — | — | — | 158,909 | — | — | — | |||||||||||||||||||||
Litigation costs | — | — | — | 57,635 | — | — | — | |||||||||||||||||||||
Acquired in-process research and development | — | — | — | 13,900 | — | 83,447 | — | |||||||||||||||||||||
Impairment charge | — | — | 13,999 | 9,214 | — | — | — | |||||||||||||||||||||
Amortization of intangible assets | 20,276 | 19,907 | 39,782 | 39,429 | 38,615 | 27,349 | — | |||||||||||||||||||||
Merger related costs | — | — | — | — | — | 16,722 | — | |||||||||||||||||||||
Total operating expenses | 199,883 | 184,344 | 409,130 | 599,481 | 357,363 | 310,053 | 119,360 | |||||||||||||||||||||
14
Table of Contents
Six Months Ended | ||||||||||||||||||||||||||||
June 30, | Year Ended December 31, | |||||||||||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||||||||
(Unaudited) | (In thousands, except per share data) | |||||||||||||||||||||||||||
Loss from operations | (26,498 | ) | (50,376 | ) | (113,745 | ) | (293,240 | ) | (58,127 | ) | (148,949 | ) | (7,751 | ) | ||||||||||||||
Equity in net (loss) income of unconsolidated entities | (1,855 | ) | 1,360 | 2,090 | 908 | 3,771 | 2,776 | 1,843 | ||||||||||||||||||||
Interest income | 3,958 | 1,887 | 3,052 | 18,809 | 4,990 | 399 | 287 | |||||||||||||||||||||
Other income (expense) | 968 | (503 | ) | 1,255 | (5,186 | ) | (190 | ) | (4,741 | ) | (6,563 | ) | ||||||||||||||||
Loss before income taxes | (23,427 | ) | (47,632 | ) | (107,348 | ) | (278,709 | ) | (49,556 | ) | (150,515 | ) | (12,184 | ) | ||||||||||||||
(Benefit) provision for income taxes | (3,959 | ) | (51 | ) | (2,580 | ) | (1,938 | ) | (7,952 | ) | (25,964 | ) | 478 | |||||||||||||||
Net loss | $ | (19,468 | ) | $ | (47,581 | ) | $ | (104,768 | ) | $ | (276,771 | ) | $ | (41,604 | ) | $ | (124,551 | ) | $ | (12,662 | ) | |||||||
Net loss attributable to noncontrolling interest | $ | (605 | ) | $ | (1,227 | ) | $ | (1,652 | ) | $ | — | $ | — | $ | — | $ | — | |||||||||||
Net loss attributable to common shareholders | $ | (18,863 | ) | $ | (46,354 | ) | $ | (103,116 | ) | $ | (276,771 | ) | $ | (41,604 | ) | $ | (124,551 | ) | $ | (12,662 | ) | |||||||
Basic and diluted net loss per common share | $ | (0.47 | ) | $ | (1.16 | ) | $ | (2.57 | ) | $ | (6.91 | ) | $ | (1.04 | ) | $ | (3.11 | ) | $ | (0.32 | ) | |||||||
Weighted-average common shares outstanding(1): | ||||||||||||||||||||||||||||
Basic | 40,280 | 40,100 | 40,100 | 40,032 | 39,991 | 39,990 | 39,990 | |||||||||||||||||||||
Diluted | 40,280 | 40,100 | 40,100 | 40,032 | 39,991 | 39,990 | 39,990 | |||||||||||||||||||||
Other data: | ||||||||||||||||||||||||||||
Cash flow provided by (used in) operating activities | $ | 3,231 | $ | 15,016 | $ | 4,488 | $ | (315,468 | ) | $ | (2,893 | ) | $ | 170,870 | $ | (22,272 | ) | |||||||||||
Purchases of property plant and equipment | (34,918 | ) | (68,382 | ) | (94,473 | ) | (43,729 | ) | (40,581 | ) | (64,431 | ) | (17,212 | ) | ||||||||||||||
Cash from consolidation of DSC | 15,099 | — | — | — | — | — | — | |||||||||||||||||||||
Cash paid for acquisition | (5,754 | ) | — | (2,640 | ) | (14,998 | ) | — | — | — | ||||||||||||||||||
Purchases of investments and marketable securities | (3,000 | ) | — | (15,431 | ) | (24,244 | ) | (150 | ) | — | — | |||||||||||||||||
Purchases of other equity investments | 7,529 | — | — | — | — | — | — | |||||||||||||||||||||
Investment in notes receivable | (10,000 | ) | — | — | — | — | — | — | ||||||||||||||||||||
Proceeds from sale of subsidiary | — | 2,046 | 2,046 | — | — | — | — | |||||||||||||||||||||
Proceeds from sale of marketable securities | — | 3,676 | 3,677 | — | — | — | — | |||||||||||||||||||||
Cash flow provided by (used in) financing activities | 11,396 | (589 | ) | (561 | ) | 2,360 | 752,082 | (94,398 | ) | 40,728 |
As of June 30, | As of December 31, | |||||||||||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||||||||
(Unaudited) | (In thousands) | |||||||||||||||||||||||||||
Consolidated balance sheet data: | ||||||||||||||||||||||||||||
Working capital | $ | 175,095 | $ | 260,578 | $ | 192,747 | $ | 347,321 | $ | 735,181 | $ | 25,093 | $ | 55,232 | ||||||||||||||
Total assets | 1,060,120 | 1,086,526 | 1,068,380 | 1,399,757 | 1,502,255 | 764,783 | 179,080 | |||||||||||||||||||||
Total debt | — | — | — | — | — | — | 190,000 | |||||||||||||||||||||
Total equity (deficit) | 851,607 | 893,465 | 846,265 | 929,472 | 1,197,387 | 459,021 | (65,644 | ) |
15
Table of Contents
(1) | As of the completion of Abraxis’ separation from APP Pharmaceuticals, Inc. on November 13, 2007, Abraxis had 40.0 million common shares outstanding. The same number of shares is being used for both diluted earnings per share and basic earnings per share for all periods prior to the separation date. All potentially dilutive employee stock awards were excluded from the computation of diluted loss per common share for all periods as the effect on net loss per share was anti-dilutive. The selected historical financial data reflect the consolidated operations of Abraxis and its subsidiaries as an independent, publicly-traded company as of and subsequent to November 13, 2007 and a combined reporting entity comprising the assets and liabilities that constituted the proprietary business of the predecessor Abraxis Bioscience for periods prior to November 13, 2007. The selected historical consolidated and combined financial data for periods prior to and including November 13, 2007 may not be indicative of Abraxis’ future performance and do not necessarily reflect what the consolidated and combined results of operations, financial position and cash flows would have been had Abraxis operated as an independent, publicly-traded company during the periods presented. |
16
Table of Contents
Six Months Ended | ||||||||||||||||||||||||||||
June 30, | Years Ended December 31, | |||||||||||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||||||||
(Unaudited) | (In thousands, except per share data) | |||||||||||||||||||||||||||
Consolidated Statements of Operations Data: | ||||||||||||||||||||||||||||
Total revenue | $ | 1,643,946 | $ | 1,233,719 | $ | 2,689,893 | $ | 2,254,781 | $ | 1,405,820 | $ | 898,873 | $ | 536,941 | ||||||||||||||
Costs and operating expenses | 1,205,926 | 910,992 | 1,848,367 | 3,718,999 | 980,699 | 724,182 | 453,357 | |||||||||||||||||||||
Operating income (loss) | 438,020 | 322,727 | 841,526 | (1,464,218 | ) | 425,121 | 174,691 | 83,584 | ||||||||||||||||||||
Interest and investment income, net | 24,209 | 41,525 | 76,785 | 84,835 | 109,813 | 40,352 | 24,557 | |||||||||||||||||||||
Equity in (gains) losses of affiliated companies | (638 | ) | 615 | 1,103 | 9,727 | 4,488 | 8,233 | 6,923 | ||||||||||||||||||||
Interest expense | 907 | 991 | 1,966 | 4,437 | 11,127 | 9,417 | 9,497 | |||||||||||||||||||||
Other (expense) income, net | (1,323 | ) | 37,786 | 60,461 | 24,722 | (2,350 | ) | 5,502 | (7,509 | ) | ||||||||||||||||||
Income (loss) before tax | 460,637 | 400,432 | 975,703 | (1,368,825 | ) | 516,969 | 202,895 | 84,212 | ||||||||||||||||||||
Income tax provision | 70,843 | 94,715 | 198,956 | 164,828 | 290,536 | 133,914 | 20,556 | |||||||||||||||||||||
Net income (loss) | $ | 389,794 | $ | 305,717 | $ | 776,747 | $ | (1,533,653 | ) | $ | 226,433 | $ | 68,981 | $ | 63,656 | |||||||||||||
17
Table of Contents
Six Months Ended | ||||||||||||||||||||||||||||
June 30, | Years Ended December 31, | |||||||||||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||||||||
(Unaudited) | (In thousands, except per share data) | |||||||||||||||||||||||||||
Net income (loss) per common share(1): | ||||||||||||||||||||||||||||
Basic | $ | 0.85 | $ | 0.67 | $ | 1.69 | $ | (3.46 | ) | $ | 0.59 | $ | 0.20 | $ | 0.19 | |||||||||||||
Diluted | $ | 0.83 | $ | 0.65 | $ | 1.66 | $ | (3.46 | ) | $ | 0.54 | $ | 0.18 | $ | 0.18 | |||||||||||||
Weighted average shares(1): | ||||||||||||||||||||||||||||
Basic | 460,112 | 459,584 | 459,304 | 442,620 | 383,225 | 352,217 | 335,512 | |||||||||||||||||||||
Diluted | 467,557 | 467,759 | 467,354 | 442,620 | 431,858 | 407,181 | 390,585 |
(1) | Amounts have been adjusted for thetwo-for-one stock split effected in February 2006. |
As of June 30, | As of December 31, | |||||||||||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||||||||
(Unaudited) | (In thousands) | |||||||||||||||||||||||||||
Consolidated Balance Sheets Data: | ||||||||||||||||||||||||||||
Cash, cash equivalents and marketable securities | $ | 3,144,617 | $ | 2,497,968 | $ | 2,996,752 | $ | 2,222,091 | $ | 2,738,918 | $ | 1,982,220 | $ | 724,260 | ||||||||||||||
Total assets | 6,178,238 | 4,749,268 | 5,389,311 | 4,445,270 | 3,611,284 | 2,735,791 | 1,258,313 | |||||||||||||||||||||
Convertible notes | — | — | — | — | 196,555 | 399,889 | 399,984 | |||||||||||||||||||||
(Accumulated deficit) retained earnings | (242,452 | ) | (1,103,276 | ) | (632,246 | ) | (1,408,993 | ) | 124,660 | (101,773 | ) | (170,754 | ) | |||||||||||||||
Stockholders’ equity | 4,927,810 | 3,862,768 | 4,394,606 | 3,491,328 | 2,843,944 | 1,976,177 | 635,775 |
18
Table of Contents
Unaudited Pro Forma Consolidated | ||||||||
Six Months Ended | Year Ended | |||||||
June 30, 2010 | December 31, 2009 | |||||||
(In thousands, except per share data) | ||||||||
Statement of operations data: | �� | |||||||
Revenue | $ | 1,890,071 | $ | 3,048,943 | ||||
Costs and expenses | $ | 1,492,513 | $ | 2,356,086 | ||||
Operating income | $ | 397,558 | $ | 692,857 | ||||
Other income and expenses | $ | 12,340 | $ | 69,354 | ||||
Income before income taxes | $ | 409,898 | $ | 762,211 | ||||
Income tax provision | $ | 55,959 | $ | 153,918 | ||||
Net income | $ | 353,939 | $ | 608,293 | ||||
Basic earnings per share | $ | 0.75 | $ | 1.30 | ||||
Diluted earnings per share | $ | 0.74 | $ | 1.28 |
June 30, | ||||||||
2010 | ||||||||
(In thousands) | ||||||||
Balance sheet data: | ||||||||
Total assets | $ | 8,383,487 | ||||||
Total liabilities | $ | 2,874,529 | ||||||
Stockholders’ equity | $ | 5,499,754 |
19
Table of Contents
Celgene | Abraxis | |||||||||||||||||||||||
High | Low | Dividend | High | Low | Dividend | |||||||||||||||||||
Year Ended December 31, 2010 | ||||||||||||||||||||||||
Third Quarter (through September 8, 2010) | $ | 58.01 | $ | 48.02 | — | $ | 76.17 | $ | 73.15 | — | ||||||||||||||
Second Quarter | 63.76 | 49.54 | — | 75.75 | 40.03 | — | ||||||||||||||||||
First Quarter | 65.07 | 54.10 | — | 54.03 | 31.82 | — | ||||||||||||||||||
Year Ended December 31, 2009 | ||||||||||||||||||||||||
Fourth Quarter | 57.79 | 49.74 | — | 43.00 | 31.20 | — | ||||||||||||||||||
Third quarter | 58.31 | 45.27 | — | 39.90 | 24.52 | — | ||||||||||||||||||
Second quarter | 48.77 | 36.90 | — | 57.60 | 35.25 | — | ||||||||||||||||||
First quarter | 56.60 | 39.32 | — | 73.98 | 42.40 | — | ||||||||||||||||||
Year Ended December 31, 2008 | ||||||||||||||||||||||||
Fourth Quarter | 66.50 | 45.44 | — | 74.50 | 46.28 | — | ||||||||||||||||||
Third Quarter | 77.39 | 56.00 | — | 78.95 | 59.03 | — | ||||||||||||||||||
Second Quarter | 65.90 | 56.88 | — | 69.91 | 58.33 | — | ||||||||||||||||||
First Quarter | 62.20 | 46.07 | — | 69.00 | 53.00 | — |
20
Table of Contents
Unaudited Pro | Unaudited Pro | |||||||||||||||
Forma | Forma — | |||||||||||||||
Consolidated per | Equivalent per | |||||||||||||||
Celgene | Abraxis | Share of Celgene | Share of Abraxis | |||||||||||||
Historical | Historical | Common Stock | Common Stock | |||||||||||||
Net income (loss) per share: | ||||||||||||||||
For the year ended December 31, 2009 | ||||||||||||||||
Basic | $ | 1.69 | $ | (2.57 | ) | $ | 1.30 | $ | 0.34 | |||||||
Diluted | $ | 1.66 | $ | (2.57 | ) | $ | 1.28 | $ | 0.33 | |||||||
For the six months ended June 30, 2010: | ||||||||||||||||
Basic | $ | 0.85 | $ | (0.47 | ) | $ | 0.75 | $ | 0.20 | |||||||
Diluted | $ | 0.83 | $ | (0.47 | ) | $ | 0.74 | $ | 0.19 | |||||||
Book value per share: | ||||||||||||||||
As of December 31, 2009 | $ | 9.57 | $ | 21.02 | N/A | N/A | ||||||||||
As of June 30, 2010 | $ | 10.73 | $ | 20.85 | $ | 11.75 | $ | 3.07 |
21
Table of Contents
22
Table of Contents
• | (A) any assets or businesses of Abraxis or any of its subsidiaries or (B) any assets or businesses of Celgene or any of its affiliates or subsidiaries, in the case of either clause (A) or (B), to the extent that the sale, divestiture, disposition, or agreement would have a material adverse effect on the business, operations, financial condition or results of operations of the combined business of Abraxis and Celgene after giving effect to the completion of merger, or | |
• | Abraxane® to the extent such sale, divestiture, disposition, agreement or restriction would have a material adverse effect on the ability of Abraxis to market Abraxane® in the United States, the European Union, Canada and Switzerland. |
23
Table of Contents
• | demands on management related to the increase in the size of Celgene after the acquisition; | |
• | the diversion of management’s attention from the management of daily operations to the integration of operations; | |
• | higher integration costs than anticipated; | |
• | failure to achieve synergies and costs savings; | |
• | difficulties in the assimilation and retention of employees; | |
• | difficulties in the assimilation of different cultures and practices, as well as in the assimilation of broad and geographically dispersed personnel and operations; and | |
• | difficulties in the integration of departments, systems, including accounting systems, technologies, books and records, and procedures, as well as in maintaining uniform standards, controls, including internal control over financial reporting required by the Sarbanes-Oxley Act of 2002 and related procedures and policies. |
24
Table of Contents
25
Table of Contents
• | Abraxis may be required to pay Celgene a termination fee of $145 million if the merger agreement is terminated under certain circumstances, as described under “The Merger Agreement — Termination Fees and Expenses;” | |
• | Abraxis will be required to pay its costs relating to the proposed merger if the merger is not completed; | |
• | under the merger agreement, Abraxis is subject to certain restrictions on the conduct of its business prior to completing the merger which may affect its ability to execute certain of its business strategies; and | |
• | matters relating to the merger (including integration planning) may require substantial commitments of time and resources by Abraxis management, which could otherwise have been devoted to other opportunities that may have been beneficial to Abraxis as an independent company. |
26
Table of Contents
• | adverse results of Celgene’s clinical trials or adverse events associated with its marketed products; | |
• | Celgene’s products’ ability to demonstrate efficacy or an acceptable safety profile; | |
• | product introductions and sales by Celgene’s competitors; | |
• | new product discovery and development by Celgene’s competitors; | |
• | Celgene’s ability to obtain and maintain regulatory approval for its existing products as well as for new products in development; | |
• | announcements of technical or product developments by Celgene’s competitors; | |
• | Celgene’s failure to effectively implement its business strategy or Celgene’s adoption and implementation of a business strategy that places it at a disadvantage to its competitors; | |
• | market conditions for pharmaceutical and biotechnology stocks; | |
• | market conditions generally; | |
• | governmental regulation; | |
• | new accounting pronouncements, regulatory rulings or actions by the FDA; | |
• | health care legislation generally and potential changes in insurance or governmental reimbursement policies on Celgene’s products and pipeline products; | |
• | public announcements by competitors regarding medical advances in the treatment of the disease states that Celgene is targeting; | |
• | patent or proprietary rights developmentsand/or changes in patent laws, including Celgene’s ability to successfully protect and enforce its intellectual property rights; | |
• | royalties and contract revenues that Celgene becomes obligated to pay; | |
• | potential changes in reimbursement policies or rates for Celgene’s products | |
• | product manufacturing, including Celgene’s arrangements with third party suppliers; | |
• | Celgene’s expenses and net income; | |
• | credit and foreign exchange risk management by Celgene; | |
• | Celgene’s liquidity; | |
• | asset and liability risk management by Celgene; | |
• | the outcome of litigation involving Celgene’s products or processes related to production and formulation of those products or uses of those products; | |
• | competition; and | |
• | operational and legal risks. |
27
Table of Contents
• | limit Celgene’s ability to borrow additional funds; | |
• | limit Celgene’s flexibility in planning for, or reacting to, changes in its operations and the industry in which it operates; | |
• | increase Celgene’s vulnerability to adverse general economic and industry conditions; | |
• | limit Celgene’s ability to make strategic acquisitions; | |
• | require Celgene to dedicate a substantial portion of its cash flow from operations to principal and interest payments on such debt, reducing the availability of cash flow to fund working capital, capital expenditures and other general corporate activities; and | |
• | place Celgene at a competitive disadvantage compared to competitors that have less debt. |
28
Table of Contents
• | with respect to borrowed money; | |
• | evidenced by notes, debentures, bonds or other similar debt instruments; | |
• | with respect to the net obligations owed under interest rate swaps or similar agreements or currency exchange transactions; | |
• | reimbursement obligations in respect of letters of credit and similar obligations; | |
• | in respect of capital leases; or | |
• | guarantees in respect of the foregoing obligations, unless the instrument creating or evidencing the same provides otherwise. |
• | trade debt incurred in the ordinary course of business; | |
• | any intercompany indebtedness between Celgene and any of its subsidiaries or affiliates; | |
• | indebtedness of Celgene that is subordinated in right of payment to Celgene’s senior obligations; | |
• | indebtedness or other obligations of Celgene that by its terms ranks equal or junior in right of payment to the CVR payments, milestone, and net sales payments; and all other obligations under the CVR agreement; |
29
Table of Contents
• | indebtedness of Celgene that, by operation of applicable law, is subordinate to any general unsecured obligations of Celgene; and | |
• | indebtedness evidenced by any guarantee of indebtedness ranking equal or junior in right of payment to the CVR payments. |
• | as a result of the risk factors listed in this proxy statement/prospectus; | |
• | in the ability of Celgene to obtain FDA approval of Abraxane® in a manner that will require milestone payments to be made or to sell Abraxane® or Abraxis pipeline products at a level that will require royalties on these products to be paid to the holders of the CVRs; | |
• | for reasons unrelated to operating performance, such as reports by industry analysts, investor perceptions, or negative announcements by our customers or competitors regarding their own performance; | |
• | regulatory changes that could impact Celgene’s business; and |
• | general economic, securities markets and industry conditions. |
30
Table of Contents
31
Table of Contents
• | the market adoption of and demand for existing and new pharmaceutical products; | |
• | the ability to maintainand/or improve revenuesand/or earnings; | |
• | the ability to successfully manufacture products in an efficient, timely and cost-effective manner; | |
• | anticipated dates on which Abraxis and Celgene will begin marketing certain products or therapies or will reach specific milestones in the development and implementation of their respective business strategies; | |
• | the impact on products and revenues of patents and other owned or licensed proprietary rights; | |
• | compliance with laws, regulations and standards, and the application and interpretation of those laws, regulations and standards, that govern or affect the pharmaceutical industry, the non-compliance with which may delay or prevent the sale of products; | |
• | the possibility that the merger may involve unexpected costs; | |
• | the difficulty in predicting the timing or outcome of product development efforts and regulatory approvals; | |
• | risks that the merger disrupts Abraxis’ current plans and operations, and the potential difficulties for Abraxis’ employee retention as a result of the announcement or completion of the merger; | |
• | the outcome of any pending or future litigation and administrative claims; | |
• | the impact of recent legislation changes to the governmental reimbursement system; | |
• | the ability of Celgene following the merger to generate net sales sufficient to trigger a payment under the CVRsand/or achieve milestones; | |
• | challenges of integration and restructuring associated with the merger or other planned acquisitions and the challenges of achieving anticipated synergies; and | |
• | other matters that are not historical facts and other risks that are described in the section titled “Risk Factors” and in the documents that are incorporated by reference into this proxy statement/prospectus. |
32
Table of Contents
33
Table of Contents
34
Table of Contents
• | sending a signed notice of revocation to the Corporate Secretary of Abraxis; | |
• | submitting a revised proxy bearing a later date; or | |
• | attending the special meeting and voting in person, which will automatically cancel any proxy previously given, or revoking your proxy in person, but your attendance alone will not revoke any proxy that you have previously given. |
• | record stockholders wishing to discontinue or begin householding, or any record stockholder residing at a household address wanting to request delivery of a copy of this proxy statement/prospectus should contact |
35
Table of Contents
the Corporate Secretary at Abraxis BioScience, Inc., 11755 Wilshire Boulevard, Suite 2000, Los Angeles, CA 90025; and |
• | stockholders owning their shares through a bank, broker or other holder of record who wish to either discontinue or begin householding should contact their record holder. |
36
Table of Contents
37
Table of Contents
38
Table of Contents
• | $250 million upon the achievement of FDA approval of Abraxane® for use in the treatment of non-small cell lung cancer, which approval permits Celgene to market Abraxane® under a label that includes a progression free survival claim; | |
• | $300 million upon the achievement of FDA approval of Abraxane® for use in the treatment of pancreatic cancer, which approval permits Celgene to market Abraxane® under a label that includes an overall survival claim; and | |
• | Cash payments equal to 5% of annual net sales of Abraxane® in excess of $2.5 billion in any year. |
39
Table of Contents
• | $250 million upon the achievement of FDA approval of Abraxane® for use in the treatment of non-small cell lung cancer, which approval permits Celgene to market Abraxane® under a label that includes a progression free survival claim; | |
• | $100 million upon the achievement of accelerated FDA approval of Abraxane® for use in the treatment of pancreatic cancer based on phase I/II data; | |
• | $300 million upon the achievement of FDA approval of Abraxane® for use in the treatment of pancreatic cancer, which approval permits Celgene to market Abraxane® under a label that includes an overall survival claim; and | |
• | Cash payments equal to 2.5% of annual net sales of Abraxane® between $1.5 billion and $2.5 billion and 5% of annual net sales of Abraxane® in excess of $2.5 billion. |
40
Table of Contents
41
Table of Contents
42
Table of Contents
• | the fact that the upfront consideration payable in a combination of cash and shares of Celgene common stock represents a premium of (1) 14.3% over the closing price per share of the Abraxis common stock on June 28, 2010 and the high per share price of the Abraxis common stock over the 52 week period ended June 28, 2010; (2) 27.2% over the volume weighted average price per share, or VWAP, over the 30 calendar days ended June 28, 2010; and (3) 41.7% over the closing price per share of the Abraxis common stock on June 1, 2010, the first trading day within the 30 calendar days prior to June 28, 2010; | |
• | the fact that approximately 80% of the upfront merger consideration is in the form of cash, which provides immediate liquidity and a high degree of certainty of value to Abraxis stockholders; | |
• | the fact that approximately 20% of the upfront merger consideration is in the form of SEC-registered and transferable and tradable Celgene common stock, which allows Abraxis stockholders to participate in the benefits of a more diversified company with greater resources and to benefit from any future growth of the combined company; | |
• | the fact that, in addition to cash, each Abraxis stockholder will receive SEC-registered and transferable and tradable CVRs with a potential duration of 20 years, which may provide Abraxis stockholders an opportunity to realize additional value by trading those CVRs in the public markets or, to the extent Abraxis as the surviving corporation generates net sales sufficient to meet certain thresholdsand/or achieves certain milestones, through additional cash payments under the terms of the CVRs; | |
• | the board of directors’ view that the stand-alone prospects of Abraxis may be adversely impacted by Abraxis’ limited financial resources; | |
• | the board of directors’ view that Abraxis stockholders will receive value in the merger that is materially greater than the value realizable by Abraxis stockholders on a stand-alone basis and under any reasonably available transaction alternatives; | |
• | the board of directors’ view that the sales process undertaken with assistance of Lazard, Goldman Sachs and BofA Merrill Lynch, in which multiple potential acquirors of Abraxis were contacted and ten parties executed confidentiality agreements and performed due diligence on Abraxis, was an effective process; | |
• | the board of directors’ view that the sale and negotiation process yielded a full and fair price for Abraxis; |
• | the fact that none of the executive officers of Abraxis were expected to enter into employment agreements with Celgene; |
• | the belief that the business of Abraxis could potentially benefit from being part of the larger Celgene corporate group and having access to its international distribution network and customers, and that by virtue |
43
Table of Contents
of the shares of Celgene common stock and CVRs, Abraxis stockholders would have an ongoing opportunity to participate in those potential benefits; |
• | management’s assessment, after consultation with Morgan Stanley & Co. Incorporated, Celgene’s financial advisor, that Celgene will have adequate capital resources to pay the cash portion of the merger consideration; | |
• | the fact that Abraxis stockholders who do not vote to adopt the merger agreement and who follow certain prescribed procedures are entitled to appraisal rights under Delaware law; | |
• | the fact that Dr. Soon-Shiong and his related entities, which together hold approximately 82% of Abraxis’ outstanding common stock, indicated their support for the merger and their intention to enter into the voting agreement in support of the merger; and | |
• | the respective opinions of Goldman Sachs, Lazard and BofA Merrill Lynch to the Abraxis board of directors that, as of the date of their opinions, and based upon and subject to the qualifications, limitations and assumptions set forth in their respective written opinions, the merger consideration to be received by the holders (other than Dr. Soon-Shiong and his affiliates to the extent excluded from such opinion) of shares of Abraxis common stock pursuant to the merger agreement was fair, from a financial point of view, to such holders, and the financial analyses related thereto prepared by Goldman Sachs, Lazard and BofA Merrill Lynch and described below under “The Merger — Opinions of Financial Advisors to Abraxis”. |
• | the merger agreement permits Abraxis to respond to, and engage in discussions with, third parties who make unsolicited acquisition proposals, and permits the board of directors to terminate the merger agreement to accept a superior proposal prior to the stockholder vote at the special meeting; | |
• | the voting agreement entered into by Dr. Soon-Shiong and his related entities terminates if the merger agreement is terminated by Abraxis to accept a superior proposal, allowing the principal stockholders to support such superior proposal; | |
• | the limited and customary conditions to the parties’ obligations to complete the merger and the fact that there is no financing condition to Celgene’s obligations; | |
• | the customary nature of the representations, warranties and covenants of Abraxis in the merger agreement; and | |
• | a covenant requiring that Celgene use its reasonable best efforts to register the CVRs under the Securities Act and cause those securities to be listed on The NASDAQ Global Select Market or another exchange, electronic trading network or trading platform as agreed by Abraxis and Celgene and a condition that the shares of Celgene common stock to be issued in the merger be listed on The NASDAQ Global Select Market. |
• | the price of Celgene common stock at the closing of the merger may vary significantly from the price of Celgene common stock at the date of the announcement of the merger agreement and the date of this proxy |
44
Table of Contents
statement/prospectus and the merger agreement does not provide for any mechanism to increase the exchange ratio in such circumstances; |
• | the milestones and net sales goals necessary to trigger payments under the CVRs may not be achieved by Abraxis and Celgene, potentially impacting the value and marketability of the CVRs; | |
• | Abraxis has incurred and will continue to incur significant transaction costs and expenses in connection with the proposed transaction, regardless of whether or not the merger is consummated; | |
• | since the merger consideration includes CVRs (which are unsecured obligations and are expressly subordinated to all senior obligations of the issuer), Abraxis stockholders are subject, with respect to the portion of the merger consideration represented by the CVRs, to the risk that there may be limitations on paying amounts as and when they become payable to the holders of the CVRs; | |
• | the merger agreement precludes Abraxis from actively soliciting alternative acquisition proposals from third parties; | |
• | the deal protection measures in the merger agreement, including the fact that the merger agreement included a $145 million termination fee and matching rights, may inhibit other potential acquirors from submitting potentially superior proposals to acquire Abraxis and, if Abraxis terminates the merger agreement to accept a superior proposal, would result in an immediate $145 million payment obligation to Celgene; | |
• | if the merger is not consummated for certain reasons, Abraxis may be required to pay a termination fee to Celgene equal to $145 million (for a full descriptions of the reasons Abraxis would be required to pay a termination fee to Celgene, see “The Merger Agreement — Termination Fees and Expenses”); | |
• | the operations of Abraxis will be restricted by interim operating covenants under the merger agreement during the period between signing the merger agreement and the closing of the merger, which could effectively prohibit Abraxis from undertaking any strategic initiatives or other material transactions to the detriment of Abraxis and its stockholders; | |
• | the receipt by a U.S. holder of the merger consideration in exchange for Abraxis common stock pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes; and | |
• | certain of Abraxis’ directors and executive officers may receive certain benefits that are different from, and in addition to, those of Abraxis’ other stockholders (See “The Merger — Interests of Directors and Executive Officers of Abraxis in the Merger”). |
45
Table of Contents
• | the belief that the acquisition of Abraxis accelerates Celgene’s strategy to become a global leader in hematology and oncology by adding Abraxane® to Celgene’s existing portfolio of leading cancer therapies; | |
• | Abraxane® will provide Celgene with an immediate entry into the solid tumor therapeutic area (or market) because Abraxane® is marketed and approved for second-line line use in metastatic breast cancer in the United States and certain international markets. Additionally, based on encouraging clinical data recently announced at major medical meetings, Abraxane® holds the potential to serve patients with a number of other serious cancers such as non-small cell lung and pancreatic cancers, as well as melanoma, ovarian cancer, bladder cancer and first-line metastatic breast cancer; | |
• | Abraxis’ core technology, which is known as the nab® platform, facilitates the targeting of compounds to tumor cells. The potential of the nab-technology platform coupled with Celgene’s innovative drug discovery and development capabilities enhances Celgene’s future product pipeline and its potential to deliver multiple novel anti-cancer agents; | |
• | The management of Celgene, assisted by advisors for Celgene, reviewed Abraxis’ financial condition, results of operations, business, reputation, risks and prospects, and concluded that an acquisition of Abraxis provides Celgene with additional current revenue that could significantly increase if regulatory approvals for Abraxane® in non-small cell lung and pancreatic cancers are received; | |
• | the exchange ratio of 0.2617 of a share of Celgene common stock for each share of Abraxis common stock is fixed and will not be adjusted for fluctuations in the market price of Celgene common stock or Abraxis common stock and the fact that, because the exchange ratio under the merger agreement is fixed, the per share value of the merger consideration to be paid to Abraxis stockholders upon completion of the merger could be significantly more or less than its implied value immediately prior to the announcement of the merger agreement; | |
• | the resulting percentage ownership interests and voting power that current Celgene stockholders would have in Celgene following the merger; | |
• | the fact that the CVRs will require Celgene to pay additional consideration only if specified regulatory approval milestones are achieved for Abraxane® or sales of Abraxane® and the Abraxis pipeline products exceed at least $1.0 billion in annual net sales; | |
• | the terms and conditions of the merger agreement; and | |
• | current industry, economic and market conditions and trends, including Abraxis’ market position. |
• | the risk that the safetyand/or efficacy results of clinical trials of Abraxane® and other Abraxis pipeline products will not support additional FDA or other regulatory agencies approval of those products; | |
• | competition and its effect on pricing, spending, third-party relationships and revenues; | |
• | the risk that regulatory authorities will condition their approval of the merger on Celgene’s agreement to divestitures or other actions that could negatively impact the business and prospects of the Celgene following the completion of the merger, which Celgene has, subject to limited exceptions, agreed under the merger agreement to undertake if necessary to complete the merger; | |
• | the possible disruption to Celgene’s business that may result from the merger, including the resulting distraction of the attention of the management of Celgene, and the costs and expenses associated with completing the merger; |
46
Table of Contents
• | the risks that the potential benefits, synergies and cost savings sought in the merger may not be realized or may not be realized within the expected time period, and that the cost of achieving such benefits, synergies and savings may be significantly higher than estimated; | |
• | the fact that Celgene has historically sold or otherwise disposed of non-core assets of companies that it acquires and may not be able to sell the non-core assets of Abraxis at fair market value, if at all, and prior to any such sale, Celgene will be required to expend the resources necessary to maintain and operate these assets, which may distract from Celgene’s core businesses; | |
• | potential changes in reimbursement policies or rates for Abraxane® or the Abraxis pipeline products; | |
• | the ability of Celgene and Abraxis to successfully protect and enforce their respective intellectual property rights; and | |
• | the other risks described in the section entitled “Risk Factors.” |
• | reviewed certain publicly available business and financial information relating to Abraxis and Celgene; | |
• | reviewed certain internal financial and operating information with respect to the business, operations and prospects of Abraxis furnished by or discussed with the management of Abraxis, including certain internal financial analyses and forecasts relating to Abraxis prepared by Abraxis management, or the Abraxis forecasts; | |
• | reviewed a certain research analysts’ publicly available financial forecasts relating to Celgene, which we refer to as the Celgene Analyst Forecasts, as well as publicly available consensus financial forecasts relating to Celgene, which we refer to as the Celgene Consensus Forecasts, and together with the Celgene Analyst Forecasts, the Celgene Public Forecasts; |
47
Table of Contents
• | reviewed estimates as to the amount and timing of certain cost savings and operating synergies anticipated by the management of Abraxis to result from the merger; | |
• | discussed the past and current business, operations, financial condition and prospects of Abraxis with members of senior managements of Abraxis and Celgene, and discussed the past and current business, operations, financial condition and prospects of Celgene with members of senior managements of Abraxis and Celgene; | |
• | reviewed the potential pro forma financial impact of the merger on the future financial performance of Celgene, including the potential effect on Celgene’s estimated earnings per share; | |
• | reviewed the trading histories for Abraxis common stock and Celgene common stock and a comparison of such trading histories with the trading histories of other companies BofA Merrill Lynch deemed relevant; | |
• | compared certain financial and stock market information of Abraxis and Celgene with similar information of other companies BofA Merrill Lynch deemed relevant; | |
• | compared certain financial terms of the merger to financial terms, to the extent publicly available, of other transactions BofA Merrill Lynch deemed relevant; | |
• | considered the results of its efforts on behalf of Abraxis to solicit, at the direction of Abraxis, indications of interest and definitive proposals from third parties with respect to a possible acquisition of Abraxis; | |
• | reviewed the merger agreement and certain ancillary agreements thereto; and | |
• | performed such other analyses and studies and considered such other information and factors as BofA Merrill Lynch deemed appropriate. |
48
Table of Contents
49
Table of Contents
• | the merger agreement; | |
• | annual reports to stockholders and Annual Reports onForm 10-K of Abraxis for the 3 years ended December 31, 2009, and of Celgene for the 5 years ended December 31, 2009; | |
• | Abraxis’ initial registration statement on Form 10; | |
• | certain interim reports to stockholders and Quarterly Reports onForm 10-Q of Abraxis and Celgene; | |
• | certain other communications from Abraxis and Celgene to their stockholders, respectively; | |
• | certain publicly available research analyst reports for Abraxis and Celgene; and | |
• | the Abraxis forecasts and certain cost savings and operating synergies projected by the management of Abraxis to result from the merger, or the synergies, each as approved by Abraxis for use by Goldman Sachs. |
50
Table of Contents
51
Table of Contents
• | reviewed the financial terms and conditions of the merger agreement and the ancillary agreements thereto; | |
• | analyzed certain publicly available historical business and financial information relating to Abraxis and Celgene; | |
• | reviewed various financial forecasts and other data provided by the management of Abraxis relating to the business of Abraxis, the publicly available estimates of a certain research analyst, as well as current consensus forecasts for Celgene with respect to the business of Celgene, or the Celgene public forecasts, and the synergies, as approved for Lazard’s use by Abraxis; | |
• | held discussions with members of the senior managements of Abraxis and Celgene with respect to the businesses and prospects of Abraxis and Celgene, respectively; | |
• | reviewed public information with respect to certain other companies in lines of business Lazard believed to be generally relevant in evaluating the businesses of Abraxis and Celgene, respectively; | |
• | reviewed the financial terms of certain business combinations involving companies in lines of business Lazard believed to be generally relevant in evaluating the businesses of Abraxis and Celgene, respectively; | |
• | reviewed the historical stock prices and trading volumes of Abraxis common stock and Celgene common stock; and | |
• | conducted such other financial studies, analyses and investigations as Lazard deemed appropriate. |
52
Table of Contents
53
Table of Contents
54
Table of Contents
NPV of Merger | Nominal Value of | |||||||||||
Implied Value of | Consideration | Merger | ||||||||||
the Upfront | (Probability- | Consideration | ||||||||||
Consideration | Adjusted | (Unadjusted CVR | ||||||||||
(w/o CVR) | CVR Payout) | Payout) | ||||||||||
Implied Value per Share | $ | 72.00 | $ | 84.80 | $ | 106.69 | ||||||
% Premium to June 28, 2010 ($63.00) | 14.3 | % | 34.6 | % | 69.4 | % | ||||||
% Premium to 52 week high ($63.00) | 14.3 | % | 34.6 | % | 69.4 | % | ||||||
% Premium to1-Month VWAP ($56.62) | 27.2 | % | 49.8 | % | 88.4 | % | ||||||
% Premium to1-Month Spot ($50.81) | 41.7 | % | 66.9 | % | 110.0 | % |
NPV of Merger | Nominal Value of | |||||||||||
Implied Value of | Consideration | Merger | ||||||||||
the Upfront | (Probability- | Consideration | ||||||||||
Consideration | Adjusted | (Unadjusted CVR | ||||||||||
(w/o CVR) | CVR Payout) | Payout) | ||||||||||
Enterprise Value/Revenues | ||||||||||||
LTM (March 31, 2010) | 7.2 | x | 8.6 | x | 10.9 | x | ||||||
2010 Estimate | 7.1 | x | 8.4 | x | 10.6 | x |
• | Amylin Pharmaceuticals, Inc. | |
• | United Therapeutics Corporation | |
• | BioMarin Pharmaceutical Inc. | |
• | Regeneron Pharmaceuticals, Inc. | |
• | Cubist Pharmaceuticals, Inc. | |
• | Onyx Pharmaceuticals, Inc. |
55
Table of Contents
Selected Companies | ||||||||||||
Enterprise Value as a Multiple of: | Range | Median | Abraxis | |||||||||
2010 Estimated Revenue | 1.6x-5.4 | x | 4.0 | x | 6.0x |
• | Astellas Pharma Inc.’s acquisition of OSI Pharmaceuticals, Inc. announced in May 2010; | |
• | Bristol-Myers Squibb Company’s acquisition of Medarex, Inc. announced in July 2009; | |
• | Johnson & Johnson’s acquisition of Cougar Biotechnology announced in May 2009; | |
• | GlaxoSmithKline plc’s acquisition of Stiefel Laboratories Inc. announced in April 2009; | |
• | Gilead Sciences, Inc.’s acquisition of CV Therapeutics announced in March 2009; | |
• | Eli Lilly and Company’s acquisition of ImClone Systems announced in September 2008; | |
• | Shionogi Inc.’s acquisition of Sciele Pharma Inc. announced in September 2008; | |
• | Eisai Co. Ltd.’s acquisition of MGI Pharma, Inc. announced in December 2007; | |
• | Reckitt Benckiser Plc’s acquisition of Adams Respiratory Therapeutics announced in December 2007; | |
• | TPG Capital’s acquisition of Axcan Pharma announced in November 2007; | |
• | GlaxoSmithKline plc’s acquisition of Reliant Pharmaceuticals Inc. announced in November 2007; | |
• | Celgene Corporation’s acquisition of Pharmion Corporation announced in November 2007; | |
• | AstraZeneca PLC’s acquisition of MedImmune Inc. announced in April 2007; and | |
• | Schering-Plough Corporation’s acquisition of Organon BioSciences NV announced in March 2007. |
56
Table of Contents
Selected Transactions | ||||||||
Enterprise Value as a Multiple of: | Range | Median | ||||||
LTM Revenue | 2.9x-11.3x | 7.1x |
57
Table of Contents
• | Amgen Inc. | |
• | Gilead Sciences, Inc. | |
• | Genzyme Corporation | |
• | Biogen Idec Inc. |
• | enterprise value as a multiple of EBITDA for 2009 and estimates for 2010; | |
• | price as a multiple of earnings per share for 2009 and estimates for 2010; and | |
• | price over earnings per share as a multiple of earnings per share growth rate, or PEG, for 2009 and estimates for 2010. |
Selected Companies | ||||||||||||
Enterprise Value as a Multiple of: | Range | Median | Celgene | |||||||||
2009 EBITDA | 7.2x-10.8x | 7.7x | 18.9x | |||||||||
2010 EBITDA Estimates | 6.0x-10.0x | 6.8x | 16.3x |
Selected Companies | ||||||
Price as a Multiple of: | Range | Median | Celgene | |||
2009 Earnings per Share | 12.3x-23.6x | 13.7x | 26.9x | |||
2010 Earnings per Share Estimates | 10.0x-22.4x | 10.9x | 21.0x |
Selected Companies | ||||||||||
Price/Earnings per Share as a Multiple of: | Range | Median | Celgene | |||||||
2009 Earnings per Share Growth Rate | 0.9-1.6 | 1.3 | 1.2 | |||||||
2010 Earnings per Share Growth Rate estimates | 0.7-1.3 | 1.2 | 0.9 |
58
Table of Contents
• | As clinical trials for use of Abraxane® for certain treatments are completed successfully, there will be revenue generation as a result of the use of Abraxane® for those treatments prior to the time that Abraxis expects FDA approval for those treatments; |
• | Abraxis will incur research and development expenses for non-Abraxane®-related products during the projection period; |
• | No revenue will be generated from Nab® pipeline products or any other potential products during the projection period; and |
• | Abraxane® will be subject to gradual competition from other new therapeutic products beginning in the U.S. in 2017 and the E.U. in 2018; |
• | Assumes that, upon entry of competition, Abraxane® will lose 15% of its market share per year for five years and be stable thereafter, and the price of Abraxane® will decrease by 10% per year for three years and be stable thereafter; and |
• | Assumes that, upon entry of competition, annual sales and marketing expense decreases at the same rate as Abraxane® market share and general and administrative expenses decrease by 5% annually. |
2010E | 2011E | 2012E | 2013E | 2014E | 2015E | 2016E | 2017E | 2018E | 2019E | 2020E | ||||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||||||||
Total Revenue | $ | 407 | $ | 594 | $ | 1,081 | $ | 1,633 | $ | 2,200 | $ | 2,374 | $ | 2,555 | $ | 2,089 | $ | 1,672 | $ | 1,350 | $ | 1,188 | ||||||||||||||||||||||
Total R&D | $ | 82 | $ | 125 | $ | 239 | $ | 371 | $ | 508 | $ | 550 | $ | 594 | $ | 477 | $ | 371 | $ | 289 | $ | 247 | ||||||||||||||||||||||
Total SG&A | $ | 381 | $ | 377 | $ | 420 | $ | 408 | $ | 419 | $ | 444 | $ | 471 | $ | 457 | $ | 440 | $ | 425 | $ | 412 | ||||||||||||||||||||||
Total Operating Expenses | $ | 463 | $ | 502 | $ | 659 | $ | 779 | $ | 927 | $ | 994 | $ | 1,065 | $ | 934 | $ | 811 | $ | 714 | $ | 659 | ||||||||||||||||||||||
Operating Income | $ | (129 | ) | $ | (8 | ) | $ | 277 | $ | 638 | $ | 1,000 | $ | 1,084 | $ | 1,173 | $ | 855 | $ | 588 | $ | 386 | $ | 298 |
59
Table of Contents
60
Table of Contents
Number of Shares | ||||||||||||||||
Underlying | Number of | |||||||||||||||
Vested and | Unvested | |||||||||||||||
Unvested Options | Restricted Stock | |||||||||||||||
Name | (Exercise Price) | Units(1) | Total(2) | Total CVRs | ||||||||||||
Non-Employee Directors | ||||||||||||||||
Kirk K. Calhoun | 4,773 ($29.44 | ) | N/A | $ | 881,877 | 30,925 | ||||||||||
1,909 ($34.65 | ) | |||||||||||||||
10,000 ($38.08 | ) | |||||||||||||||
4,243 ($47.30 | ) | |||||||||||||||
10,000 ($55.44 | ) | |||||||||||||||
David S. Chen, Ph.D. | 1,909 ($29.44 | ) | N/A | $ | 760,186 | 28,061 | ||||||||||
1,909 ($34.65 | ) | |||||||||||||||
10,000 ($38.08 | ) | |||||||||||||||
4,243 ($47.30 | ) | |||||||||||||||
10,000 ($55.44 | ) | |||||||||||||||
Stephen D. Nimer, M.D. | 4,773 ($6.29 | ) | N/A | $ | 1,296,767 | 37,607 | ||||||||||
4,773 ($25.15 | ) | |||||||||||||||
1,909 ($29.44 | ) | |||||||||||||||
1,909 ($34.65 | ) | |||||||||||||||
10,000 ($38.08 | ) | |||||||||||||||
4,243 ($47.30 | ) | |||||||||||||||
10,000 ($55.44 | ) | |||||||||||||||
Leonard Shapiro | 4,773 ($14.12 | ) | N/A | $ | 955,000 | 30,925 | ||||||||||
1,909 ($34.65 | ) | |||||||||||||||
10,000 ($38.08 | ) | |||||||||||||||
4,243 ($47.30 | ) | |||||||||||||||
10,000 ($55.44 | ) | |||||||||||||||
Michael S. Sitrick | 10,000 ($38.08 | ) | N/A | $ | 338,500 | 10,000 | ||||||||||
Executive Officers | ||||||||||||||||
Patrick Soon-Shiong, M.D. | 150,000 ($39.93 | ) | 206,204 | $ | 19,684,046 | 367,164 | ||||||||||
Executive Chairman | 6,640 ($64.99 | ) | ||||||||||||||
2,781 ($70.12 | ) | |||||||||||||||
1,539 ($71.49 | ) | |||||||||||||||
Bruce Wendel | 138,125 ($39.93 | ) | 126,756 | $ | 13,631,605 | 281,287 | ||||||||||
Vice Chairman and Chief | 3,678 ($64.99 | ) | ||||||||||||||
Executive Officer | 10,607 ($65.73 | ) | ||||||||||||||
2,121 (70.63 | ) | |||||||||||||||
Mitchell Fogelman | 13,000 ($39.93 | ) | 7,000 | $ | 919,510 | 20,000 | ||||||||||
Principal Financial and | ||||||||||||||||
Accounting Officer |
(1) | Upon vesting, each RSU entitles its holder to one share of Abraxis common stock. | |
(2) | Represents (a) the difference between $71.93 (i.e., the assumed per share amount) and the exercise price, multiplied by the number of underlying vested and unvested options, plus (b) the value of the RSUs based on the assumed $71.93 per share amount. Under the merger agreement, the value of the stock portion of the merger consideration will be calculated by multiplying (a) the exchange ratio of 0.2617 and (b) the average of the |
61
Table of Contents
closing sale prices for Celgene common stock on The NASDAQ Global Select Market, as reported in The Wall Street Journal, for each of the ten consecutive trading days ending with the seventh complete trading day prior to the closing of the merger, with such amount rounded up to the nearest cent. |
• | a lump sum payment equal to two times his annual base salary ($500,000) and two times his most recently-established target bonus ($325,000) for a total payment of $1.65 million; | |
• | reimbursement of COBRA premiums until he obtains new employment, up to a maximum of 18 months; and | |
• | life insurance coverage at present levels for a period of 24 months. |
Estimated | ||||||||||||||||
Estimated | Estimated | Life | ||||||||||||||
Severance | COBRA | Insurance | ||||||||||||||
Name and Title | Payments | Payments | Premiums | Total | ||||||||||||
Bruce Wendel Vice Chairman and Chief Executive Officer | $ | 1,650,000 | (1) | $ | 25,022 | (2) | $ | 133,562 | (3) | $ | 1,808,584 | |||||
Mitchell Fogelman Principal Financial and Accounting Officer | $ | 162,500 | (4) | N/A | N/A | $ | 162,500 |
(1) | Represents two times Mr. Wendel’s current annual base salary plus two times his current annual target bonus of 65%. | |
(2) | Represents 18 months of COBRA premiums. | |
(3) | Represents life insurance premiums for two years at current coverage level. | |
(4) | Represents six months of Mr. Fogelman’s current annual base salary. If Mr. Fogelman’s employment is terminated, with or without cause, after October 19, 2010, then he would not be entitled to any severance. |
62
Table of Contents
63
Table of Contents
• | the exercise price of the stock option, less | |
• | the per share amount. |
• | an amount in cash, without interest, equal to the excess, if any, of the per share amount over the exercise price of such stock option, and | |
• | one CVR. |
64
Table of Contents
• | the base appreciation amount of the SAR, less | |
• | the per share amount. |
• | an amount in cash, without interest, equal to the excess, if any, of the per share amount over the base appreciation amount of such SAR, and | |
• | one CVR. |
• | cash, without interest, equal to the per share amount, and | |
• | one CVR. |
• | (i) soliciting, knowingly encouraging or inducing any customer, supplier or licensee with whom Abraxis or its subsidiaries were engaged in a contractual relationship, or substantive discussions or proposal negotiations, in each case as of the completion of the merger, with respect to the business to cease doing business with Abraxis, Celgene or any of their subsidiaries with respect to the business in the United States and all other countries in which Abraxis or its subsidiaries were engaged in the business at the completion of the merger; or (ii) otherwise knowingly interfering with Abraxis’, Celgene’s or their respective subsidiaries’ relationship with any customer, supplier or licensee of the business, | |
• | soliciting, encouraging or inducing any employee, consultant or independent contractor that was engaged by Abraxis or its subsidiaries as of the completion of the merger to terminate or breach an employment, contractual or other relationship with Abraxis, Celgene or their respective subsidiaries, and |
65
Table of Contents
• | making any public statements that directly or indirectly disparage Abraxis, Celgene or any of their respective affiliates, |
• | to any trusts for the benefit of Dr. Soon-Shiong or any member of his immediate family, any other entity in which Dr. Soon-Shiong or any members of his immediate family separately or collectively hold, directly or indirectly, a majority of the outstanding equity interests, or any charitable foundation or organization, in each case only if such persons agree to be bound by the terms of the stockholders’ agreement; | |
• | pursuant to a third party tender offer or exchange offer (1) which is approved by the Celgene board of directors or (2) in circumstances in which it is reasonably likely that these stockholders would be, as a result of not tendering or exchanging, relegated to different consideration than would be available to those stockholders who did tender or exchange, taking into account any provisions thereof; | |
• | to the estate of a deceased holder upon a deceased holder’s death; | |
• | from the estate of a deceased holder to the beneficiaries thereof; or | |
• | pursuant to a merger or similar transaction involving Celgene. |
66
Table of Contents
• | (A) any assets or businesses of Abraxis or any of its subsidiaries or (B) any assets or businesses of Celgene or any of its affiliates or subsidiaries, in the case of either clause (A) or (B), to the extent that such sale, divestiture, disposition, or agreement would have a material adverse effect on the business, operations, financial condition or results of operations of the combined business of Abraxis and Celgene after giving effect to the completion of the merger; or | |
• | Abraxane® to the extent such sale, divestiture, disposition, agreement or restriction would have a material adverse effect on the ability of Abraxis to market Abraxane® in the United States, the European Union, Canada and Switzerland. |
• | adopts and implements a procedure or process to obtain the highest possible price for stockholders; | |
• | discloses all material information to stockholders regarding the merger;��and | |
• | institutes a majority of the minority vote provision. |
67
Table of Contents
68
Table of Contents
• | the exercise price of the stock option, less | |
• | the per share amount. |
• | an amount in cash, without interest, equal to the excess, if any, of the per share amount over the exercise price of such stock option, and |
69
Table of Contents
• | one CVR. |
• | the base appreciation amount of the SAR, less | |
• | the per share amount. |
• | an amount in cash, without interest, equal to the excess, if any, of the per share amount over the base appreciation amount of such SAR, and | |
• | one CVR. |
• | cash, without interest, equal to the per share amount and | |
• | one CVR. |
70
Table of Contents
71
Table of Contents
• | Abraxis’ and its subsidiaries’ organization, good standing, and qualification to do business; | |
• | Abraxis’ capitalization, including the particular number of outstanding shares of Abraxis common stock, stock options, SARs and RSUs, and Abraxis’ equity interest in its subsidiaries; | |
• | Abraxis’ corporate power and authority to enter into the merger agreement and to complete the merger and the transactions contemplated by the merger agreement; | |
• | the execution and delivery of the merger agreement by Abraxis; | |
• | the approval and authorization by the Abraxis board of directors of the merger agreement, the merger and the other transactions contemplated by the merger agreement; | |
• | the enforceability of the merger agreement against Abraxis; | |
• | the absence of any violation or conflict with Abraxis’ or its subsidiaries’ governing documents, applicable law or certain agreements as a result of the execution and delivery of the merger agreement and completion of the merger; | |
• | the required registrations and consents of governmental entities in connection with the merger agreement, the merger and the other transactions contemplated by the merger agreement; | |
• | Abraxis’ filings with the SEC since January 1, 2008, including financial statements, Sarbanes-Oxley certifications, absence of complaints regarding accounting practices, controls over financial reporting, and the absence of certain undisclosed liabilities; | |
• | information supplied by Abraxis for inclusion or incorporation by reference in this document; | |
• | the conduct of Abraxis and its subsidiaries of their operations and the absence of certain events, including an “Abraxis material adverse effect” (which we define below), since March 31, 2010 until June 30, 2010; | |
• | the absence of legal proceedings and orders; | |
• | Abraxis’ and its subsidiaries’ permits and compliance with applicable law; | |
• | taxes; | |
• | employee benefit plans and ERISA matters; | |
• | employee matters; | |
• | environmental matters; | |
• | the absence of related-party transactions; | |
• | intellectual property matters; |
72
Table of Contents
• | inapplicability of takeover statutes; | |
• | owned and leased real property; | |
• | material contracts and performance of obligations thereunder; | |
• | receipt by the Abraxis board of directors of a fairness opinion from each of Goldman Sachs, Lazard and BofA Merrill Lynch; | |
• | regulatory issues related to pharmaceutical matters; | |
• | the absence of undisclosed broker’s fees; | |
• | insurance coverage; and | |
• | anti-corruption and anti-bribery laws. |
• | any effect relating to, or resulting from, any change or development in or to local, regional, national or foreign political, economic or financial conditions or in or to local, regional, national or foreign credit, financial, banking or securities markets (including any disruption thereof), including any effect caused by acts of terrorism or war or armed hostilities (whether or not declared); | |
• | any effect affecting generally any of the industries, geographic areas or business segments in which Abraxis or any of its subsidiaries operate; | |
• | any effect relating to, or resulting from, hurricanes, earthquakes or other natural disasters; | |
• | any change in the share price or trading volume (as opposed to the facts underlying such change) of Abraxis’ common stock on The NASDAQ Global Select Market; | |
• | any effect relating to, or resulting from, the adoption, implementation, promulgation, repeal, modification or proposal of any applicable law or U.S. GAAP after June 30, 2010; | |
• | any failure, in and of itself (as opposed to the facts underlying such failure) by Abraxis to meet any budgets, plans, projections or forecasts of Abraxis’ or its subsidiaries’ revenue, earnings or other financial performance or results of operations, or any published financial forecasts or analyst estimates with respect to the revenue, earnings or other financial performance or results of operations of Abraxis or its subsidiaries or any change in analyst recommendations, for any period; or | |
• | any effect directly relating to, or resulting from, the execution, performance or announcement of the merger agreement or the related agreements (we refer to the non-competition agreement with Dr. Soon-Shiong, the CVR agreement and the voting agreement collectively as the related agreements), including the impact thereof on relationships with customers, suppliers, licensors, licensees, distributors, partners or employees, the loss or departure of officers or other employees of Abraxis or its subsidiaries and any pending or threatened legal proceeding challenging the merger agreement, any of the related agreements or the transactions contemplated by the merger agreement or the related agreements, or otherwise resulting from |
73
Table of Contents
the pursuit of the completion of the transactions contemplated by the merger agreement or the related agreements; |
• | Celgene’s and merger sub’s organization, good standing, and qualification to do business; | |
• | Celgene’s capitalization, including the particular number of outstanding shares of Celgene common stock, stock options and warrants; | |
• | Celgene’s equity interest in merger sub and the operations of merger sub; | |
• | Celgene’s and merger sub’s corporate power and authority to enter into the merger agreement and to complete the merger and the transactions contemplated by the merger agreement; | |
• | the execution and delivery of the merger agreement by each of Celgene and merger sub; | |
• | the enforceability of the merger agreement against Celgene and merger sub; | |
• | the absence of any violation or conflict with Celgene’s and its subsidiaries’ governing documents, applicable law or certain agreements as a result of the execution and delivery of the merger agreement and the completion of the merger; | |
• | the required registrations and consents of governmental entities in connection with the merger agreement, the merger and the other transactions contemplated by the merger agreement; | |
• | Celgene’s filings with the SEC since January 1, 2008, including financial statements, Sarbanes-Oxley certifications, absence of complaints regarding accounting practices, controls over financial reporting and the absence of certain undisclosed liabilities; | |
• | the absence of a “Celgene material adverse effect” (which we define below) since March 31, 2010 until June 30, 2010; | |
• | information supplied by Celgene for inclusion or incorporation by reference in this document; | |
• | Celgene’s ability to pay the merger consideration at the completion of the merger; | |
• | the absence of legal proceedings and orders; | |
• | Celgene’s and its subsidiaries’ permits and compliance with applicable law; | |
• | the absence of undisclosed broker’s fees; | |
• | non-ownership by Celgene or merger sub of any shares of Abraxis common stock as of June 30, 2010; and | |
• | solvency of Celgene and Abraxis as the surviving corporation following completion of the merger. |
74
Table of Contents
• | any effect relating to, or resulting from, any change or developments in or to local, regional, national or foreign political, economic or financial conditions or in or to local, regional, national or foreign credit, financial, banking or securities markets (including any disruption thereof), including any effect caused by acts of terrorism or war or armed hostilities (whether or not declared); | |
• | any effect affecting generally any of the industries, geographic areas or business segments in which Celgene or any of its subsidiaries operate; | |
• | any effect relating to, or resulting from, hurricanes, earthquakes or other natural disasters; | |
• | any change in the share price or trading volume (as opposed to the facts underlying such change) of Celgene common stock on The NASDAQ Global Select Market; | |
• | any effect relating to, or resulting from, the adoption, implementation, promulgation, repeal, modification or proposal of any applicable law or U.S. GAAP after June 30, 2010; | |
• | any failure, in and of itself (as opposed to the facts underlying such failure), to meet any budgets, plans, projections or forecasts of Celgene’s or its subsidiaries’ revenue, earnings or other financial performance or results of operations, or any published financial forecasts or analyst estimates with respect to the revenue, earnings or other financial performance or results of operations of Celgene or its subsidiaries or any change in analyst recommendations, for any period; or | |
• | any effect directly relating to, or resulting from, the execution, performance or announcement of the merger agreement or the related agreements, including the impact thereof on relationships with customers, suppliers, licensors, licensees, distributors, partners or employees, the loss or departure of officers or other employees of Celgene or its subsidiaries and any pending or threatened legal proceeding challenging the merger agreement, any of the related agreements or the transactions contemplated by the merger agreement or the related agreements, or otherwise resulting from the pursuit of the completion of the transactions contemplated by the merger agreement or the related agreements; |
• | carry on their respective businesses in the ordinary course in all material respects; | |
• | use reasonable best efforts to preserve intact its respective current business organization; | |
• | use reasonable best efforts to keep available the services of its current officers and employees; and | |
• | use reasonable best efforts to preserve its relationships with customers, suppliers and others having significant business dealings with it. |
75
Table of Contents
• | split, combine, reclassify, subdivide or amend the terms of any of its capital stock; declare, set aside or pay any dividends; or acquire any shares of Abraxis’ capital stock or any securities convertible into shares of Abraxis’ capital stock; | |
• | issue, deliver, sell, pledge, transfer, convey, dispose of or encumber any shares of its capital stock, other equity securities or any securities convertible into any such shares of its capital stock (other than the issuance of shares of Abraxis common stock upon the exercise of the stock optionsand/or vesting of the RSUs); | |
• | amend Abraxis’ certificate of incorporation, by-laws or other organizational documents of Abraxis or its subsidiaries; | |
• | merge or consolidate with any other person, except for any such transactions between wholly-owned subsidiaries of Abraxis or between Abraxis and any of its wholly-owned subsidiaries; | |
• | make any acquisition or agree to make any acquisition of any business, by merger or otherwise; | |
• | dispose of or encumber, or agree to dispose of or encumber, any of the assets of Abraxis that have a value in excess of $1 million individually and $5 million in the aggregate, except sales of inventory or obsolete assets in the ordinary course of business; | |
• | except for trade payables of Abraxis or any of its subsidiaries incurred in the ordinary course of business, incur any additional indebtedness, issue any debt securities or assume, guarantee or endorse or otherwise becomes responsible for the obligations of any person for borrowed money or make any loans, advance or capital contributions to, or investments in, any other person (other than a wholly-owned subsidiary of Abraxis); | |
• | except as may be required by changes in regulatory accounting standards and practices or in U.S. GAAP, change any of the accounting principles or practices used by it materially affecting the reported consolidated assets, liabilities or results of operations of Abraxis and its subsidiaries; | |
• | waive, settle or compromise any legal proceeding involving the payment of monetary damages of more than $2 million individually or $6 million in the aggregate or involving the imposition of equitable relief on, or the admission of wrongdoing by, Abraxis or any of its subsidiaries; | |
• | (1) terminate, establish, adopt, enter into, make any new grants or awards of stock based compensation or other benefits under, amend or otherwise modify, any stock option or equity incentive plans, employee benefit plans or employment agreements or increase the salary, wage, bonus or other compensation of any directors or employee of Abraxis or its subsidiaries at or above the level of “Vice President” or its equivalent, (2) enter into any severance, change of control, termination or retention arrangements with, or accelerate the compensation or benefits of, any employee or director; (3) subject to certain specified exceptions, hire any person or promote any person at the level of “Vice President” or above, or with an annual base salary in excess of $200,000; or (4) make or forgive any loan to employees or directors (other than reasonable travel and other business expenses in the ordinary course of business); | |
• | make or change any material tax election, change any tax accounting period, adopt or change any tax accounting method, amend any material tax return, enter into any material closing agreement, settle any material tax claim or assessment, surrender any right to claim a refund of material taxes, or consent to any extension or waiver of the limitation period applicable to any material tax claim or assessment, except as required by applicable law; | |
• | authorize, recommend, adopt, propose or announce an intention of adopt a plan of complete or partial liquidation or other reorganization of Abraxis or any of its subsidiaries; | |
• | incur or commit to any capital expenditures in excess of the capital expenditure budget provided to Celgene, except to the extent that such excess is not greater than $10 million in the aggregate; |
76
Table of Contents
• | (1) except for certain material contracts specified in the merger agreement, enter into, terminate or modify in any material respect any material contract or waive, release or assign any material rights or claims thereunder; (2) grant or acquire, agree to grant or to acquire from any third party, or dispose of or permit to lapse any rights, title or interest to, any intellectual property or, subject to certain specified exceptions, encumber, impair, abandon, fail to diligently maintain, transfer or otherwise dispose of any right, title or interest of Abraxis or any of its subsidiaries in any intellectual property of Abraxis, or (3) divulge, furnish or make accessible any trade secret to any person not subject to an enforceable written confidentiality agreement with respect to such trade secret; | |
• | announce, implement or effect any reduction in force, lay-off, early retirement program, severance program or other program or effort concerning the termination of employment of employees of Abraxis or any of its subsidiaries; | |
• | enter into, amend or cancel any insurance policies other than in the ordinary course of business; | |
• | adopt or enter into stockholder rights agreement or “poison pill”; | |
• | acquire or dispose of any manufacturing facilities; or | |
• | agree in writing or otherwise to take any of the foregoing actions. |
77
Table of Contents
• | solicit, initiate or knowingly encourage the making, submission or announcement of any inquiry regarding, or any proposal or offer which would reasonably be expected to lead to a merger, acquisition, consolidation, tender offer, exchange offer or other transaction involving, or any proposal or offer to purchase or acquire in any manner, directly or indirectly (1) assets representing 15% or more of the assets or revenues of Abraxis and its subsidiaries, taken as a whole, or (2) 15% or more of the voting securities of Abraxis, other than, in each case, transactions with Celgene (we refer to each proposal or offer described in clauses (1) and (2) as an acquisition proposal); | |
• | enter into, participate, continue or otherwise engage in discussions or negotiations with, or provide any non-public information to any third party with respect to any inquiries regarding, or the making, submission or announcement of, an acquisition proposal; | |
• | enter into or approve any letter of intent, agreement in principle, option agreement, share purchase agreement, acquisition agreement or similar agreement for an acquisition proposal; or | |
• | subject to certain exceptions, terminate, waive, amend or modify any provision of, or grant permission under, any standstill, confidentiality agreement or similar contract to which Abraxis or any of its subsidiaries is a party; |
78
Table of Contents
• | failure to take such action would be reasonably likely to constitute a breach of its fiduciary duties to Abraxis stockholders under applicable law; and | |
• | the acquisition proposal either constitutes a superior proposal (which we define below) or is reasonably likely to lead to a superior proposal. |
79
Table of Contents
• | obtaining the consents and making the registrations required under the merger agreement and taking all reasonable steps as may be necessary to obtain such consents and to make such registrations; | |
• | obtaining all necessary approvals, consents or waivers from third parties; | |
• | defending any lawsuits or other legal proceedings challenging the merger agreement or the completion of the merger; and | |
• | executing and delivering any additional instruments necessary to complete the merger and to fully carry out the purposes of the merger agreement. |
• | respond as promptly as practicable to any inquiries received from the FTC or the Antitrust Division for additional information or documentation and to all inquiries and requests received from any state attorney general or other governmental entity in connection with antitrust matters, and | |
• | not extend any waiting period under the HSR Act or enter into any agreement with the FTC or the Antitrust Division not to complete the transactions contemplated by the merger agreement, except with the prior written consent of the other parties to the merger agreement (which consent will not be unreasonably withheld or delayed). |
• | (1) any assets or businesses of Abraxis or any of its subsidiaries, (2) any assets or businesses of Celgene, any of its subsidiaries or affiliates, in either case, to the extent that such sale, divestiture, disposition, or agreement would have a material adverse effect on the business, operations, financial condition or results of operations of the combined business of Abraxis and Celgene after giving effect to the completion of the transactions contemplated by the merger agreement; or |
80
Table of Contents
• | Abraxane®, to the extent such sale, divestiture, disposition, agreement or restriction would have a material adverse effect on the ability of Abraxis to market Abraxane® in the United States, the European Union, Canada and Switzerland. |
• | promptly notify the other party of any material communication to that party from the FTC, the Antitrust Division, any state attorney general or any other governmental entity and permit the other party to review in advance any proposed written communication to any of the foregoing; | |
• | to the extent practicable not agree to participate in any substantive meeting or discussion with any governmental entity in respect of any filings, investigation or inquiry concerning the merger agreement or the merger unless it consults with the other party in advance and, to the extent permitted by such governmental entity, gives the other party the opportunity to attend and participate thereat; and | |
• | furnish the other party with copies of all correspondence, filings, and communications (and memoranda setting forth the substance thereof) between them on the one hand, and any governmental entity or members of their respective staffs on the other hand, with respect to the merger agreement and the merger. |
81
Table of Contents
• | Abraxis providing Celgene and its representatives reasonable access to Abraxis’ and its subsidiaries’ employees, agents, properties, books, contracts, commitments and records; | |
• | coordination of press releases and other public statements with respect to the merger agreement, the merger and the other transactions contemplated by the merger agreement; | |
• | actions by Celgene to cause merger sub to fulfill its obligations under the merger agreement to complete the merger in accordance with the terms and subject to the conditions set forth in the merger agreement and |
82
Table of Contents
ensure that, prior to the completion of the merger, merger sub does not conduct any business or make any investment other than as specifically contemplated by the merger agreement; |
• | Celgene adopting, executing and delivering, and ensuring that a duly qualified trustee executes and delivers, the CVR agreement, subject to any reasonable revisions to the CVR agreement requested by such trustee; | |
• | Celgene’s assumption of liability for all transfer taxes resulting from the transactions effected pursuant to the merger agreement; | |
• | Celgene, as promptly as practicable after the date of the merger agreement, preparing and submitting to The NASDAQ Global Select Market (or such other exchange(s), electronic trading networks or other suitable trading platforms as agreed by Abraxis and Celgene) an application to list the CVRs and the shares of Celgene common stock being issued as part of the merger consideration and Celgene using its reasonable best efforts to cause such CVRs and shares of Celgene common stock to be approved for listing for trading on The NASDAQ Global Select Market (or such other exchange(s), electronic trading networks or other suitable trading platforms as agreed by Abraxis and Celgene) at or prior to the completion of the merger; | |
• | the Abraxis board of directors adopting a resolution consistent with SEC guidance so that the disposition by any officer or director of Abraxis who is a covered person for purposes of Section 16 of the Exchange Act of Abraxis common stock, stock options, RSUs and SARs will be an exempt transaction for purposes of Section 16 of the Exchange Act; and | |
• | Abraxis using reasonable best efforts to deliver to Celgene a FIRPTA statement on or prior to the completion of the merger. |
• | Stockholder Approval. The merger agreement and the merger must have been adopted by the holders of a majority of the outstanding shares of Abraxis common stock in accordance with the DGCL. | |
• | No Injunctions or Restraints. No temporary restraining order, preliminary or permanent injunction or other order will have been issued or entered by any governmental entity in the United States, the European Union, Canada or Switzerland, that is in effect and that prohibits the completion of the merger. | |
• | HSR Act. The waiting period (and any extension thereof) applicable to the merger under the HSR Act must have expired or been terminated. | |
• | Registration Statement. The registration statement of which this proxy statement/prospectus forms a part, must have been declared effective and no stop order suspending the effectiveness of the registration statement may be in effect. |
• | Representations and Warranties. The representations and warranties relating to the capitalization of Abraxis must be true and correct in all but de minimis respects (which means 2% or less of the aggregate outstanding shares of Abraxis common stock on a fully diluted basis) on the date of the merger agreement and at the closing as though made on and as of the closing date (except to the extent any representation and warranty speaks as of a particular date, in which case the representation and warranty need only be true and correct as of that date), and the other representations and warranties of Abraxis set forth in the merger agreement must be true and correct (without giving effect to any limitation as to “materiality” or Abraxis material adverse effect set forth therein) on the date of the merger agreement and at the closing as though made on and as of the closing date (except to the extent any representation and warranty speaks as of a particular date, in which case the representation and warranty need only be true and correct as of that date), |
83
Table of Contents
except where the failure of the representations and warranties to so be true and correct has not had and would not reasonably be expected to have, individually or in the aggregate, an Abraxis material adverse effect. |
• | Performance of Obligations. Abraxis must have performed or complied with, in all material respects, its obligations and covenants required to be performed or complied with by it under the merger agreement at or prior to the closing. | |
• | Absence of Material Adverse Effect. Since the date of the merger agreement, there must not have occurred any Abraxis material adverse effect. | |
• | Related Agreements. The related agreements (the non-competition agreement with Dr. Soon-Shiong, the CVR agreement and the voting agreement) must be in full force and effect in accordance with their terms. |
• | Representations and Warranties. The representations and warranties of Celgene set forth in the merger agreement must be true and correct in all material respects (without giving effect to any limitation as to “materiality” or Celgene material adverse effect set forth therein) on the date of the merger agreement and at the closing as though made on and as of the closing date (except to the extent any representation and warranty speaks as of a particular date, in which case the representation and warranty need only be true and correct as of that date), except where the failure of the representations and warranties to so be true and correct has not had and would not reasonably be expected to have, individually or in the aggregate, a Celgene material adverse effect. | |
• | Performance of Obligations. Celgene and merger sub must have performed or complied with, in all material respects, their respective obligations and covenants required to be performed or complied with by them under the merger agreement at or prior to the closing. | |
• | Absence of Material Adverse Effect. Since the date of the merger agreement, there must not have occurred any Celgene material adverse effect. | |
• | CVR Agreement. The CVR agreement must have been duly executed and delivered by Celgene and the trustee and be in full force and effect. | |
• | Listing. The shares of Celgene common stock being issued in the merger must have been approved for listing (subject to notice of issuance) for trading on The NASDAQ Global Select Market. |
• | the completion of the merger has not occurred on or before March 31, 2011, the termination date specified in the merger agreement. However, the right to terminate the merger agreement on these grounds is not available to any party whose failure to fulfill any obligation under the merger agreement is the cause of, or resulted in, the failure of the completion of the merger to occur on or before the termination date; | |
• | any permanent injunction or other order issued by any governmental entity in the United States, the European Union, Canada or Switzerland is in effect preventing or prohibiting the completion of the merger has become final and non-appealable. However, the right to terminate the merger agreement on these grounds is not available to any party whose failure to fulfill any obligation under the merger agreement has been the cause of, or resulted in, the imposition of the permanent injunction or other order; or | |
• | Abraxis stockholders do not vote to adopt the merger agreement at the special meeting (including any postponement or adjournment of the special meeting). |
84
Table of Contents
• | if Abraxis breaches or fails to perform any of its representations, warranties, covenants or obligations contained in the merger agreement, which breach or failure to perform results in the conditions described in “— Conditions to the Merger” relating to the accuracy of Abraxis’ representations and warranties or the performance of Abraxis’ obligations and covenants to the merger agreement not being able to be satisfied by the termination date; | |
• | if Abraxis breaches or fails to perform in any material respect its obligations under the “no shop” restrictions of the merger agreement; or | |
• | prior to the special meeting, if (1) the Abraxis board of directors has publicly withdrawn its approval or recommendation of the merger agreement or the merger or has publicly recommended to the stockholders of Abraxis any acquisition proposal, or (2) a tender offer or exchange offer has been commenced that, if successful, would result in any person or group becoming the beneficial owner of 15% or more of Abraxis common stock, and the Abraxis board of directors fails to recommend that Abraxis stockholders not tender their shares in connection with such tender or exchange offer within ten business days of the commencement. |
• | if Celgene or merger sub breaches or fails to perform any of its representations, warranties, covenants or obligations contained in the merger agreement, which breach or failure to perform results in the conditions described in “— Conditions to the Merger” relating to the accuracy of Celgene’s or merger sub’s representations and warranties or the performance of Celgene’s or merger’s sub’s obligations and covenants to the merger agreement not being able to be satisfied by the termination date; or | |
• | prior to the special meeting, in order to concurrently enter into a definitive agreement with respect to any superior proposal, provided that Abraxis has complied in all material respects with the “no shop” restrictions of the merger agreement and concurrently pays a termination fee of $145 million to Celgene. |
• | Abraxis terminates the merger agreement, prior to the special meeting, in order to concurrently enter into a definitive agreement with respect to a superior proposal and has complied in all material respects with the “no shop” restrictions of the merger agreement; | |
• | Celgene terminates the merger agreement if Abraxis breaches or fails to perform in any material respect its obligations under the “no shop” restrictions of the merger agreement; | |
• | prior to the special meeting, (1) the Abraxis board of directors has publicly withdrawn its approval or recommendation of the merger agreement or the merger or has publicly recommended to Abraxis stockholders any acquisition proposal, or (2) a tender offer or exchange offer has been commenced that, if successful, would result in any person or group becoming the beneficial owner of 15% or more of the outstanding stock of Abraxis, and the Abraxis board of directors fails to recommend that Abraxis stockholders not tender their shares in connection with such tender or exchange offer within ten business days of the commencement; | |
• | (1) Celgene terminates the merger agreement if Abraxis breaches or fails to perform any of its representations, warranties, covenants or obligations contained in the merger agreement, which breach or failure to perform results in the conditions described in “— Conditions to the Merger” relating to the accuracy of Abraxis’ representations and warranties or the performance of Abraxis’ obligations or covenants not being able to be satisfied by the termination date, (2) prior to the date upon which such breach or failure to perform |
85
Table of Contents
occurs but after the date of the merger agreement, a bona fide acquisition proposal (for the purposes of this definition of acquisition proposal, the references to “15%” will be deemed references to “60%”) for Abraxis has been publicly announced and (3) within 12 months after such termination either Abraxis has entered into a definitive agreement relating to an acquisition proposal or a transaction contemplated by an acquisition proposal for Abraxis has been consummated; |
• | (1) Celgene or Abraxis terminates the merger agreement if Abraxis stockholders do not vote to adopt the merger agreement at the special meeting (including any postponement or adjournment thereof), (2) prior to the date of the special meeting but after the date of the merger agreement, a bona fide acquisition proposal (for the purposes of this definition of acquisition proposal, the references to “15%” will be deemed references to “60%”) for Abraxis has been publicly announced and (3) within 12 months after such termination either Abraxis has entered into a definitive agreement relating to an acquisition proposal or a transaction contemplated by an acquisition proposal for Abraxis has been consummated; or | |
• | (1) Celgene or Abraxis terminates the merger agreement if the merger has not been completed on or before the termination date of March 31, 2011, (2) prior to such termination, the waiting period (and any extension thereof) applicable to the merger under the HSR Act has expired or been terminated, (3) prior to such termination but after the date of the merger agreement, a bona fide acquisition proposal (for the purposes of this definition of acquisition proposal, the references to “15%” will be deemed references to “60%”) for Abraxis has been publicly announced and (4) within 12 months after such termination either Abraxis has entered into a definitive agreement relating to an acquisition proposal or a transaction contemplated by an acquisition proposal for Abraxis has been consummated. |
• | any merger agreement or merger (other than the merger agreement, the merger, or any business combination or transaction with Celgene or any of its affiliates), consolidation, combination, reorganization, recapitalization, dissolution, liquidation or winding up of or by Abraxis or any other business combination or |
86
Table of Contents
extraordinary corporate transaction involving Abraxis or any of its subsidiaries, or any sale, lease or transfer of a material amount of assets of Abraxis or any of its subsidiaries; |
• | any amendment of Abraxis’ certificate of incorporation, unless such amendment is consented to by Celgene; | |
• | any action, proposal, transaction or agreement that would reasonably be expected to result in a breach in any respect of any covenant, representation or warranty or any other obligation or agreement of Abraxis contained in the merger agreement or of such principal stockholder contained in the voting agreement; and | |
• | any action, proposal, transaction or agreement involving Abraxis or any of its subsidiaries that would reasonably be expected to prevent, impede, frustrate, interfere with, delay, postpone or adversely affect the merger and the other transactions contemplated by the merger agreement. |
• | the completion of the merger; | |
• | any material amendment to merger agreement that is adverse to the principal stockholders that has not been approved by the principal stockholders; or | |
• | the termination of the merger agreement in accordance with its terms. |
• | transfers upon the death of a principal stockholder pursuant to the terms of any trust or will of such principal stockholder or by the laws of intestate succession, but only if the transferee executes and delivers to Celgene an agreement to be bound by the terms of the voting agreement to the same extent as such principal stockholder; | |
• | transfers to Dr. Soon-Shiong, the trusts established for the benefit of Dr. Soon-Shiong or any members of his immediate family, any other entity in which Dr. Soon-Shiong or any members of his immediate family hold a majority of the outstanding equity interests, or any charitable foundation or organization, in each case only if such persons agree to be bound by the terms of the voting agreement; | |
• | transfers solely in connection with the payment of the exercise priceand/or the satisfaction of any tax withholding obligation arising from the exercise of any option or the vesting of any RSU; | |
• | the conversion of any shares of Abraxis common stock that are subject to the voting agreement into the right to receive the merger consideration pursuant to the merger in accordance with the merger agreement; or | |
• | the granting of proxies to vote shares of Abraxis common stock that are subject to the voting agreement with respect to the election of directors and ratification of the appointment of Abraxis’ auditors at Abraxis’ annual meeting of stockholders, in accordance with the recommendation of the Abraxis board of directors. |
87
Table of Contents
• | solicit, initiate or knowingly encourage the making, submission or announcement of any inquiry regarding, or any proposal or offer which would reasonably be expected to lead to, an acquisition proposal; | |
• | enter into, participate, continue or otherwise engage in discussions or negotiations with, or provide any non-public information to any person (other than Celgene, merger sub and their representatives) with respect to any inquiries regarding, or the making, submission or announcement of, an acquisition proposal; or | |
• | enter into or approve any letter of intent, agreement in principle, option agreement, share purchase agreement, acquisition agreement or similar agreement relating to an acquisition proposal. |
• | the completion of the merger; | |
• | any material amendment to the merger agreement that is adverse to the principal stockholders that has not been approved by the principal stockholders, including any amendment which decreases or changes the form of the merger consideration, unless consented to in writing by each of the principal stockholders; and | |
• | the termination of the merger agreement in accordance with its terms. |
88
Table of Contents
• | Milestone Payment #1. Celgene agreed to pay $250 million upon FDA approval of Abraxane® for use in the treatment of non-small cell lung cancer, which approval permits Celgene to market Abraxane® under a label that includes a progression free survival claim, but only if the foregoing milestone is achieved no later than the fifth anniversary of the merger. | |
• | Milestone Payment #2. Celgene agreed to pay $400 million (if achieved no later than April 1, 2013) or $300 million (if achieved after April 1, 2013 and before the fifth anniversary of the merger) upon FDA approval of Abraxane® for use in the treatment of pancreatic cancer, which approval permits Celgene to market Abraxane® under a label that includes an overall survival claim. | |
• | Net Sales Payments. For each full one-year period ending December 31st during the term of the CVR agreement, which we refer to as a net sales measuring period (with the first net sales measuring period beginning January 1, 2011 and ending December 31, 2011), Celgene agreed to pay: |
• | 2.5% of the net sales of Abraxane® and the Abraxis pipeline products, that exceeds $1 billion but are less than or equal to $2 billion for such period, plus | |
• | an additional amount equal to 5% of the net sales of Abraxane® and the Abraxis pipeline products that exceed $2 billion but are less than or equal to $3 billion for such period, plus | |
• | an additional amount equal to 10% of the net sales of Abraxane® and the Abraxis pipeline products that exceed $3 billion for such period. |
89
Table of Contents
90
Table of Contents
• | the pharmaceutical product comprising the chemical compound having the chemical name of 5β,20-Epoxy-1,2a,4,7β,10β,13a-hexahydroxytax-11-en-9-one 4,10-diacetate 2-benzoate 13-ester with (2R,3S)-N-benzoyl-3-phenylisoserine, known by the generic name “paclitaxel” and bound to albumin that is the subject of the New Drug ApplicationNo. 21-660 filed with the FDA and subject of the European Medicines Agency Marketing Authorization granted on January 11, 2008, together with all amendments and supplements to such FDA and European Medicines Agency approvals (identified by Abraxis as Abraxane®); provided that in all cases such Product is an injectable formulation. | |
• | the pharmaceutical product comprising the chemical compound having the chemical name of (2R,3S)- N-carboxy-3-phenylisoserine,N-tert-butyl ester, 13-ester with 5β-20-epoxy-1,2 ,4,7β,10β,13 -hexahydroxytax-11-en-9-one4-acetate 2-benzoate, anhydrous bound to albumin that is the subject of the Investigational New Drug Application No. 73,527 filed with the FDA together with all amendments (identified by Abraxis as “nab-docetaxel (ABI-008)”); provided that in all cases such Product is an injectable formulation. |
• | the pharmaceutical product comprising the chemical compound having the chemical name of (3S, 6R, 7E, 9R, 10R, 12R, 14S, 15E, 17E, 19E, 21S, 23S, 26R, 27R, 34aS)-9, 10, 12, 13, 14, 21, 22, 23, 24, 25, 26, 27, 32, 33, 34,34a-hexadecahydro-9,27-dihydroxy-3-[(1R)-2-[(1S, 3R, 4R)-4-hydroxy-3-methoxycyclohexyl]-1-methylethyl]-10,21-dimethoxy-6, 8, 12, 14, 20, 26-hexamethyl-23, 27-epoxy-3H-pyrido[2, 1-c][1,4] oxaazacyclohentriacontine -1, 5, 11, 28, 29 (4H,6H,31H)-pentone bound to albumin that is the subject of the Investigational New Drug Application No. 74.610 filed with the FDA together with all amendments (identified by Abraxis as “nab-rapamycin (ABI-009)”); provided that in all cases such Product is an injectable formulation. |
• | the pharmaceutical product comprising the chemical compound having the chemical name of17-allylamino-17-demethoxygeldanamycin,17-allylamino geldanamycin bound to albumin that is the subject of the Investigational New Drug Application No. 78,298 filed with the FDA together with all amendments (identified by Abraxis as “nab-17AAG (ABI-010)”); provided that in all cases such Product is an injectable formulation. |
91
Table of Contents
• | the pharmaceutical product comprising the chemical compound having the chemical name of N-(1,2,3-trimethoxy-10-methylsulfanyl-9-oxo-5,6,7,9-tetrahydro-benzo[a]heptalen-7-yl)-3-[3-(1,2,3-trimethoxy-10-methylsulfanyl-9-oxo-5,6,7,9-tetrahydro-benzo[a]heptalen-7-yl)-ureido]-propionamide bound to albumin that is the subject of the Investigational New Drug Application No. 103,698 filed with the FDA together with all amendments (identified by Abraxis as “nab-thiocolchicine dimer (ABI-011)”); provided that in all cases the Product is an injectable formulation. | |
• | the pharmaceutical product comprising the chemical compound having the chemical name of (αR, βS)-β-[[(1, 1-Dimethylethoxy)carbonyl]amino]-α-(hexanoyloxy)benzenepropanoic acid (2aR, 4S, 4aS, 6R, 9S, 11S, 12S, 12aR, 12bS)-12b-(acetyloxy)-12-(benzoyloxy)-2a, 3, 4, 4a, 5, 6, 9, 10, 11, 12, 12a, 12b-dodecahydro-4, 6, 11-trihydroxy-4a, 8, 13, 13-tetramethyl-5-oxo-7, 11-methano-1H-cyclodecal[3, 4]benz[1, 2-b]oxet-9-yl ester bound to albumin (identified by Abraxis as “nab-novel taxane (ABI-013)”) provided that in all cases the Product is an injectable formulation. | |
• | the pharmaceutical product comprising the chemical compound having the chemical name of Benzenepropanoic acid, β-(benzoylamino)-α-hydroxy-, 6, 12bbis(acetyloxy)-12-(benzoyloxy)-2a, 3, 4, 4a, 5, 6, 9, 10, 11, 12, 12a, 12bdodecahydro-4, 11-dihydroxy-4a, 8, 13, 13-tetramethyl-5-oxo-7, 11-methano-1H-cyclodeca[3, 4]benz[1, 2-b]-oxet-9-yl ester, [2aR-[2aα, 4β, 4aβ, 6β, 9α(αR*, βS*), 11α, 12α, 12aα, 12bα]] bound to albumin that is the subject of the Investigational New Drug Application No. 63, 082 filed with the FDA together with all amendments (identified by Abraxis as “Coroxane”); provided that in all cases the Product is an injectable formulation. |
• | with respect to borrowed money; | |
• | evidenced by notes, debentures, bonds or other similar debt instruments; | |
• | with respect to the net obligations owed under interest rate swaps or similar agreements or currency exchange transactions; | |
• | as a result of reimbursement obligations in respect of letters of credit and similar obligations; | |
• | in respect of capital leases; or | |
• | as a result of guarantees in respect of obligations referred to in the first five bullets above; unless, in any case, the instrument creating or evidencing the foregoing or pursuant to which the foregoing is outstanding provides that such obligations are pari passu to or subordinate in right of payment to the CVRs. |
• | trade debt incurred in the ordinary course of business; | |
• | any intercompany indebtedness between Celgene and any of its subsidiaries or affiliates; | |
• | indebtedness of Celgene that is subordinated in right of payment to Celgene’s senior obligations; | |
• | indebtedness or other obligations of Celgene that by its terms ranks equal or junior in right of payment to the CVR payments, milestone, and net sales payments, and all other obligations under the CVR agreement; | |
• | indebtedness of Celgene that, by operation of applicable law, is subordinate to any general unsecured obligations of Celgene; and |
92
Table of Contents
• | indebtedness evidenced by any guarantee of indebtedness ranking equal or junior in right of payment to the CVR payments. |
• | if any default on any senior obligations exceeding $25 million in aggregate principal amount would occur as a result of such payment, distribution or acquisition; | |
• | during the continuance of any payment default in respect of any senior obligations (after expiration of any applicable grace period) exceeding $25 million in aggregate principal amount; | |
• | if the maturity of any senior obligations representing more than $25 million in aggregate principal amount is accelerated in accordance with its terms and such acceleration has not been rescinded; or | |
• | following the occurrence of any default (other than a payment default, and after the expiration of any applicable grace period) with respect to any senior obligations with an aggregate principal amount of more than $25 million, the effect of which is to permit the holders of such senior obligations (or a trustee or agent acting on their behalf) to cause, with the giving of notice if required, the maturity of such senior obligations to be accelerated, for a period commencing upon the receipt by the trustee (with a copy to Abraxis) of a written notice of such default from the representative of the holders of such senior obligations and ending when such senior obligations are paid in full in cash or cash equivalents or, if earlier, when such default is cured or waived. |
• | within 15 days after Celgene is required to file the same with the SEC, copies of the annual reports and of the information, documents and other reports (or copies of such portions of the foregoing as the SEC may from time to time by rules and regulations prescribe) which Celgene is required to file with the SEC pursuant to Section 13 or Section 15(d) of the Exchange Act; | |
• | if Celgene is not required to file periodic reports under Section 13 or 15(d) the Exchange Act, within 45 days after each calendar quarter (other than the last quarter of each calendar year), quarterly financial information and, within 90 days after each calendar year, annual financial information that would be required pursuant to Section 13 of the Exchange Act in respect of a security listed and registered on a national securities exchange (provided that Celgene also delivers with, or includes within, the annual reports referred to in this bullet point and the preceding bullet point a calculation of net sales for Abraxane® and the Abraxis pipeline products for the annual period to date); | |
• | within ten days after Celgene files its annual report with the SEC for any year if Celgene is required to file periodic reports under Section 13 or 15(d) of the Exchange Act, or if Celgene is not required to file periodic reports under Section 13 or 15(d) of the Exchange Act within ninety (90) days after each calendar year, a net sales statement with respect to the last completed calendar year; and | |
• | within four business days after the occurrence of any milestone, a notice stating that the milestone has occurred, the amount of the corresponding milestone payment and the applicable milestone payment date. |
93
Table of Contents
94
Table of Contents
• | default in the payment of all or any part of the net sales payments or milestone payments after a period of ten business days when they become due and payable; | |
• | material default in the performance, or breach in any material respect, of any other covenant or warranty of Celgene in respect of the CVRs, and continuance of such default or breach for a period of ninety days after written notice has been given to Celgene by the trustee or to Celgene and the trustee by the holders of a majority of the outstanding CVRs specifying such default or breach and requiring it to be remedied; | |
• | a court having jurisdiction in the premises entering a decree or order for relief in respect of Celgene in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar official) of Celgene or for any substantial part of its property or ordering the winding up or liquidation of its affairs, and such decree or order remaining unstayed and in effect for a period of 90 consecutive days; or | |
• | Celgene commencing a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consenting to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar official) of Celgene or for any substantial part of its property, or making any general assignment for the benefit of creditors. |
95
Table of Contents
• | to convey, transfer, assign, mortgage or pledge to the trustee as security for the CVRs any property or assets; | |
• | to evidence the succession of another person to Celgene, and the assumption by any such successor of the covenants of Celgene in the CVR agreement and in the CVRs; | |
• | to add to Celgene’s covenants such further covenants, restrictions, conditions or provisions as its board of directors and the trustee shall consider to be for the protection of CVR holders, and to make the occurrence, or the occurrence and continuance, of a default in any such additional covenants, restrictions, conditions or provisions an event of default permitting the enforcement of all or any of the several remedies provided in the CVR agreement, provided that in respect of any such additional covenant, restriction, condition or provision, such amendment may (1) provide for a particular grace period after default, (2) provide for an immediate enforcement upon such event of default, (3) limit the remedies available to the trustee upon such event of default, or (4) limit the right of the holders of a majority of the outstanding CVRs to waive an event of default; | |
• | to cure any ambiguity, to correct or supplement any provision in the CVR agreement or in the CVRs which may be defective or inconsistent with any other provision in the CVR agreement, provided that these provisions shall not materially reduce the benefits of the CVR agreement or the CVRs to the CVR holders; | |
• | to make any other provisions with respect to matters or questions arising under the CVR agreement, provided that such provisions shall not adversely affect the interests of the CVR holders; | |
• | to make any amendments or changes necessary to comply or maintain compliance with the Trust Indenture Act, if applicable; or | |
• | to make any change that does not adversely affect the interests of the CVR holders. |
96
Table of Contents
• | modify in a manner adverse to the CVR holders (1) any provision contained in the CVR agreement with respect to the termination of the CVR agreement or the CVRs, (2) the time for payment and amount of the net sales payment or milestone payment or otherwise extend the maturity of the CVRs or reduce the amounts payable in respect of the CVRs or modify any other payment term or payment date (except that this provision does not impair the right of Celgene to redeem the CVRs as described under “— CVR Redemption Rights” below; | |
• | reduce the number of CVRs, the consent of whose holders is required for any such amendment; or | |
• | modify any of the provisions of the CVR agreement regarding amendments to the CVR agreement, except to increase the percentage of outstanding CVRs required for an amendment or to provide that certain other provisions of the CVR agreement cannot be modified or waived without the consent of each CVR holder affected by such modification or waiver. |
• | the redemption date; | |
• | the redemption price; | |
• | the name and address of the paying agent; | |
• | a statement that CVRs called for redemption must be surrendered to the paying agent to collect the redemption price; | |
• | a statement that unless Celgene defaults in making such redemption payment, all right, title and interest in and to the CVRs and any CVR payments will cease to accrue on and after the redemption date; | |
• | the clause of the CVR agreement pursuant to which the CVRs called for redemption are being redeemed; and | |
• | a statement that no representation is made as to the correctness or accuracy of the CUSIP and ISIN number, if any, listed in such notice or printed on the CVRs. |
97
Table of Contents
• | an individual citizen or resident of the United States; | |
• | a corporation (or other entity taxable as a corporation) created or organized under the laws of the United States or any state thereof (or the District of Columbia); | |
• | a trust if it (1) is subject to the primary supervision of a court within the United States and one or more U.S. persons have the authority to control all substantial decisions of the trust or (2) has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person; or | |
• | an estate the income of which is subject to U.S. federal income tax regardless of its source. |
98
Table of Contents
• | the sum of (1) the amount of cash (including any cash received in lieu of fractional shares of Celgene common stock), (2) the fair market value of the Celgene common stock and (3) the fair market value of the CVRs received by the U.S. holder in exchange for such Abraxis common stock; and | |
• | the U.S. holder’s adjusted tax basis in such Abraxis common stock. |
99
Table of Contents
• | 575,000,000 shares of common stock, par value $.01 per share; and | |
• | 5,000,000 shares of preferred stock, par value $.01 per share, of which 520 shares have been designated Series A convertible preferred stock and 20,000 shares have been designated as Series B convertible preferred stock. |
100
Table of Contents
• | that only persons who are nominated in accordance with the procedures set forth in the bylaws shall be eligible for election as directors; | |
• | for the election of directors by majority voting in uncontested elections and by plurality voting in contested elections; | |
• | that only business brought before the annual meeting by the Celgene board of directors or by a stockholder who complies with the procedures set forth in the bylaws may be transacted at an annual meeting of stockholders; | |
• | that only the chairman of the board, if any, the chief executive officer, the president, the secretary or a majority of the Celgene board of directors may call special meetings of Celgene stockholders; | |
• | a procedure for the Celgene board of directors to fix the record date whenever stockholder action by written consent is undertaken; and | |
• | that a vote of holders of not less than a majority of the outstanding shares of Celgene common stock may amend bylaw provisions, and the Celgene board of directors, except as otherwise provided by law, shall have power equal to that of the stockholders to amend the bylaws by vote of not less than a majority of the entire board of directors. |
101
Table of Contents
Abraxis | Celgene | |||
Authorized Capital Stock: | The authorized capital stock of Abraxis currently consists of 106,000,000 shares, consisting of 100,000,000 shares of common stock, $.001 par value per share, and 6,000,000 shares of preferred stock, $.001 par value per share. | The authorized capital stock of Celgene currently consists of 580,000,000 shares, consisting of 575,000,000 shares of common stock, $.01 par value per share, and 5,000,000 shares of preferred stock, $.01 par value per share. | ||
Rights of Preferred Stock: | The Abraxis board of directors has the authority, without stockholder approval, to create or provide for any series of preferred stock, and to fix the designations, preferences and rights, and qualifications, limitations or restrictions thereof, which designations, preferences or rights may be superior to those of Abraxis common stock. Abraxis currently has no shares of preferred stock outstanding. | The Celgene board of directors has the authority, without stockholder approval, to issue shares of authorized preferred stock from time to time in one or more series and to fix the designations, powers, preferences and rights and the qualifications, limitations and restrictions of each series of preferred stock, which rights and preferences may be superior to those of Celgene common stock. Celgene currently has no shares of preferred stock outstanding. | ||
Number of Directors: | Abraxis’ bylaws currently provide that a majority of the members of the Abraxis board of directors can determine the number of directors on its board, provided that the board consists of at least one member. There currently are seven directors serving on the Abraxis board of directors. | Celgene’s bylaws currently provide that the number of members of the Celgene board of directors shall consist of no less than three and no more than 15 directors; provided, however, that a majority of the then authorized number of directors may increase or decrease the number of directors. There are currently nine directors serving on the Celgene board of directors. | ||
Election of Directors: | Abraxis’ bylaws provide that, directors shall be elected by a plurality vote of the shares present in person, by remote communication, if applicable, or represented by proxy at the stockholders’ annual meeting in each year and entitled to vote on the election of directors. | Celgene’s bylaws provide that, at any meeting duly called and held for the election of directors at which a quorum is present, each nominee for director shall be elected to the board of directors if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election; provided, however, that directors shall be elected by a plurality of the votes cast by the holders (acting as such) of shares of stock of Celgene entitled to elect such directors at any meeting of stockholders for which (1) the secretary of Celgene receives a notice that a stockholder has nominated a person for election to the board of directors in compliance with the advance notice requirements for stockholder nominees for director set forth in Celgene’s bylaws and (2) such nomination has not been withdrawn by such stockholder on or prior to the day next preceding the date Celgene first mails its notice of meeting for such meeting to the stockholders. If directors are to be elected by a plurality of the votes cast, stockholders shall not be permitted to vote against a nominee. | ||
Cumulative Voting: | Abraxis’ certificate of incorporation and bylaws do not provide for cumulative voting, and as a result, holders of Abraxis’ capital stock have no cumulative voting rights in connection with the election of directors. | Celgene’s certificate of incorporation and bylaws do not provide for cumulative voting, and as a result, holders of Celgene’s capital stock have no cumulative voting rights in connection with the election of directors. |
102
Table of Contents
Abraxis | Celgene | |||
Classification of Board of Directors: | Abraxis does not have a classified board of directors. Abraxis’ bylaws provide that the directors shall be elected at each annual meeting of Abraxis stockholders and shall hold office until the next annual meeting and until their successors shall be duly elected and qualified, or until such director’s earlier death, resignation or removal. | Celgene does not have a classified board of directors. Celgene’s bylaws provide that the directors shall be elected at each annual meeting of Celgene stockholders and shall serve until the next succeeding annual meeting of stockholders and until their respective successors have been elected and qualified. | ||
Removal of Directors: | Abraxis’ bylaws provide that any director or the entire board of directors may be removed from office, with or without cause, by the affirmative vote of the holders of a majority of the outstanding shares entitled to vote at an election of directors. | Celgene’s bylaws provide that any director or the entire board of directors may be removed, with or without cause, by the holders of a majority of the shares at the time entitled to vote at an election of directors. | ||
Board Vacancies: | Abraxis’ bylaws provide that vacancies on the board of directors or newly created directorships resulting from an increase in the authorized number of directors may, unless otherwise provided in the certificate of incorporation, be filled by the affirmative vote of a majority of directors then in office, even though less than a quorum, or by a sole remaining director. Any director so elected shall hold office for the unexpired portion of the term of the director whose place shall be vacant, and until his successor shall have been duly elected and qualified. A board vacancy shall be deemed to exist in the case of the death, removal or resignation of any director, or if the stockholders fail at any meeting of stockholders at which directors are to be elected to elect the number of directors then constituting the whole board of directors. | Celgene’s bylaws provide that vacancies on the board of directors caused by death, resignation, removal, disqualification, or other cause, or additional directorships resulting from an increase in the number of directors may be filled at any time by a majority of directors then in office, even though less than a quorum, or in the case of any vacancy in the office of any director, by the stockholders. Any director so chosen shall hold office until his successor shall have been elected and qualified; or, if the person so chosen is a director elected to fill a vacancy, he shall hold office for the unexpired term of his predecessor. |
103
Table of Contents
Abraxis | Celgene | |||
Director Nominations by Stockholders: | Abraxis’ bylaws provide that nominations of persons for election to the Abraxis board of directors may be made at a meeting of stockholders by or at the direction of the board of directors, by any nominating committee or person appointed by the board of directors or by any stockholder entitled to vote for the election of directors at the meeting who complies with the applicable notice procedures set forth in Abraxis’ bylaws. Such nominations, other than those made by or at the direction of the board of directors, shall be made pursuant to timely notice in writing to the secretary of Abraxis. To be timely, a stockholder’s notice must be delivered to or mailed and received not less than 120 calendar days prior to the date on which Abraxis first mailed its proxy materials for the previous year’s annual meeting of stockholders. If during the prior year Abraxis did not hold an annual meeting, or if the date of the annual meeting was changed more than 30 days from the previous year’s meeting, then the deadline is a reasonable time before Abraxis begins to print and mail its proxy materials. Such stockholder’s notice shall set forth (a) as to each person whom the stockholder proposes to nominate for election or re-election as a director, (1) the name, age, business address and residence address of the person, (2) the principal occupation or employment of the person, (3) the class and number of shares of Abraxis which are beneficially owned by the person and (4) any other information relating to the person that is required to be disclosed in solicitations for proxies for election of directors pursuant to Rule 14a under the Exchange Act; and (b) as to the stockholder giving the notice, (1) the name and record address of the stockholder, and (2) the class and number of shares of Abraxis which are beneficially owned by the stockholder. These provisions do not apply to nomination of any persons entitled to be separately elected by holders of Abraxis preferred stock. | Celgene’s bylaws provide that nominations of persons for election to the Celgene board of directors may be made at any annual meeting of stockholders, (a) by or at the direction of the board of directors (or any duly authorized committee thereof) or (b) by any Celgene stockholder (1) who is a stockholder of record on the date of the giving of the required notice and on the record date for the determination of stockholders entitled to vote at such annual meeting and (2) who complies with the notice procedures set forth in the bylaws. For a nomination to be made by a stockholder, such stockholder must have given timely notice thereof in proper written form to the secretary of Celgene. To be timely, a stockholder’s notice to the secretary must be delivered to or mailed and received at the principal executive offices of Celgene not less than 60 days nor more than 90 days prior to the date of the annual meeting; provided, however, that in the event that less than 70 days’ notice or prior public disclosure of the date of the annual meeting is given or made to stockholders, notice by the stockholder (in order to be timely) must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure of the date of the annual meeting was made, whichever first occurs. To be in proper written form, a stockholder’s notice to the secretary must set forth (a) as to each person whom the stockholder proposes to nominate for election as a director (1) the name, age, business address and residence address of the person, (2) the principal occupation or employment of the person, (3) the class or series and number of shares of capital stock of Celgene which are owned beneficially or of record by the person and (4) any other information relating to the person that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act, and the rules and regulations promulgated thereunder; and (b) as to the stockholder giving the notice (1) the name and record address of such stockholder, (2) the class or series and number of shares of capital stock of Celgene which are owned beneficially or of record by such stockholder, (3) a description of all arrangements or understandings between such stockholder and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such stockholder, (4) a representation that such stockholder intends to appear in person or by proxy at the annual meeting to nominate the persons named in his notice and (5) any other information relating to such stockholder that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected. | ||
Stockholder Action by Written Consent: | Abraxis’ bylaws provide that, unless otherwise provided in the certificate of incorporation, any action required by statute to be taken at any annual or special meeting of the stockholders, or any action which may be taken at any annual or special meeting of the stockholders, may be taken by written consent if the written consent is signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. No written consent shall be effective to take the corporate action referred to therein unless, within 60 days of the earliest dated consent duly delivered to Abraxis, written consents signed by a sufficient number of stockholders to take such action are duly delivered to Abraxis. Abraxis’ certificate of incorporation does not prohibit stockholders from taking action by written consent as provided in Abraxis’ bylaws. | Celgene’s certificate of incorporation does not provide for action to be taken by the stockholders of Celgene by written consent. Accordingly, the default DGCL Section 228 applies, providing that any action required by statute to be taken at any annual or special meeting of the stockholders, or any action which may be taken at any annual or special meeting of the stockholders, may be taken by written consent if the written consent is signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. |
104
Table of Contents
Abraxis | Celgene | |||
Certificate of Incorporation Amendments: | Abraxis reserves the right to amend, alter, change or repeal any provision contained in its certificate of incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon Abraxis stockholders therein are granted subject to this reservation. The DGCL requires that any amendment to Abraxis’ certificate of incorporation must be approved by the board of directors and that a resolution be adopted recommending that the amendment be approved by a majority of the outstanding stock entitled to vote on the amendment, plus the amendment must be approved by a majority of the outstanding stock of any class entitled under the DGCL to vote separately as a class on the amendment. | The DGCL requires that any amendment to Celgene’s certificate of incorporation must be approved by the board of directors and that a resolution be adopted recommending that the amendment be approved by a majority of the outstanding stock entitled to vote on the amendment, plus the amendment must be approved by a majority of the outstanding stock of any class entitled under the DGCL to vote separately as a class on the amendment. | ||
Bylaw Amendments: | Abraxis’ bylaws may be repealed, altered or amended or new bylaws adopted at any meeting of the stockholders, either annual or special, by the affirmative vote of at least 80% of the stock entitled to vote at such meeting, unless a larger vote is required by Abraxis’ bylaws or certificate of incorporation. The Abraxis board of directors also has the authority to repeal, alter or amend Abraxis’ bylaws or adopt new bylaws (including, without limitation, the amendment of any bylaws setting forth the number of directors who constitute the whole board of directors) by unanimous written consent or at any annual, regular or special meeting by the affirmative vote of a majority of the whole number of directors, subject to the power of Abraxis stockholders to change or repeal such bylaws and provided that the Abraxis board of directors will not make or alter any bylaws fixing the qualifications, classifications or term of office of directors. | Celgene’s bylaws provide that the holders of shares entitled at the time to vote for the election of directors have power to adopt, amend, or repeal the bylaws by vote of not less than a majority of such shares, and except as otherwise provided by law, the board of directors has power equal in all respects to that of the stockholders to adopt, amend, or repeal the bylaws by vote of not less than a majority of the entire board. | ||
Special Meetings of Stockholders: | Abraxis’ bylaws provide that special meetings of the stockholders may be called, for any purpose or purposes, by the chairman of the board of directors, the president, the secretary or the board of directors at any time. | Celgene’s bylaws provide that special meetings of the stockholders may be called, for any purpose or purposes, by the chairman of the board of directors, if any, the chief executive officer, the president, the secretary, or a majority of the board of directors at any time. | ||
Notice of Special Meetings of Stockholders: | Abraxis’ bylaws require that written notice of a special meeting be given to stockholders not less than ten days or more than 60 days before the date of the meeting, except that where the matter to be acted on is a merger or consolidation of Abraxis or a sale, lease or exchange of all or substantially all of its assets, such notice must be given not less than 20 nor more than 60 days prior to such meeting. | Celgene’s bylaws require that notice of a special meeting must be given by the chairman of the board of directors, if any, the chief executive officer, the president, any vice-president, the secretary, or an assistant secretary, to stockholders not less than ten days or more than 60 days before the date of the meeting, unless a different period is prescribed by law. | ||
Stockholder Nominations and Proposals (Requirements for Delivery and Notice): | Abraxis’ bylaws provide that in order for a stockholder to make a nomination or propose business at an annual meeting of the stockholders, the stockholder must give timely written notice to Abraxis’ secretary not less than 120 calendar days prior to the date on which Abraxis first mailed its proxy materials for the prior year’s annual meeting. If during the prior year Abraxis did not hold an annual meeting, or if the date of the annual meeting was changed more than 30 days from the prior year’s meeting, then the deadline is a reasonable time before Abraxis begins to print and mail its proxy materials. A stockholder’s notice to the secretary must set forth as to each matter the stockholder proposes to bring before the annual meeting (1) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (2) the name and record address of the stockholder proposing such business, (3) the cla ss and number of shares of Abraxis which are beneficially owned by the stockholder and (4) any material interest of the stockholder in such business. | Celgene’s bylaws provide that in order for a stockholder to make a nomination or propose business at an annual meeting of the stockholders, the stockholder must give timely written notice to Celgene’s secretary not less than 60 days nor more than 90 days prior to the date of the annual meeting; provided, however, that in the event that less than 70 days’ notice or prior public disclosure of the date of the annual meeting is given or made to stockholders, notice by the stockholder (in order to be timely) must be so received not later than the close of business on the tenth (10th) day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure of the date of the annual meeting was made, whichever first occurs. A stockholder’s notice to the secretary must set forth as to each matter such stockholder proposes to bring before the annual meeting (1) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (2) the name and record address of such stockholder, (3) the class or series and number of shares of capital stock of Celgene which are owned beneficially or of record by such stockholder, (4) a description of all arrangements or understandings between such stockholder and any other person or persons (including their names) in connection with the proposal of such business by such stockholder and any material interest of such stockholder in such business, and (v) a representation that such stockholder intends to appear in person or by proxy at the annual meeting to bring such business before the meeting. |
105
Table of Contents
Abraxis | Celgene | |||
Proxy: | Abraxis’ bylaws provide that every person entitled to vote or execute consents has the right to do so either in person, by remote communication, if applicable, or by an agent or agents authorized by a written proxy executed by such person or his duly authorized agent, which proxy must be filed with the secretary of Abraxis at or before the meeting at which it is to be used. The proxy so appointed need not be a stockholder. No proxy may be voted on after three years from its date of creation unless the proxy provides for a longer period. Unless and until voted, every proxy will be revocable at the pleasure of the person who executed it or of his legal representatives or assigns, except in those cases where an irrevocable proxy permitted by statute has been given. | Celgene’s bylaws provide that at any meeting duly called and held at which a quorum is present, every person entitled to vote or execute consents has the right to do so either in person or by proxy to decide such matters. | ||
Limitation of Personal Liability of Directors: | Abraxis’ certificate of incorporation provides that to the fullest extent permitted by Delaware statutory or decisional law, as amended or interpreted, no Abraxis director will be personally liable to Abraxis or its stockholders for monetary damages for breach of fiduciary duty as a director. | Celgene’s certificate of incorporation provides that no director of Celgene will be liable to Celgene or any of its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (1) for any breach of the director’s duty of loyalty to Celgene or its stockholders, (2) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (3) under Section 174 of the DGCL, or (4) for any transaction from which the director derived an improper personal benefit. | ||
Indemnification of Directors and Officers: | Abraxis’ bylaws provides that Abraxis will indemnify and hold harmless, to the fullest extent permitted by the DGCL (as the same exists or may be subsequently amended or interpreted), any person made or threatened to be made a party to an action or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that such person, or a person of whom he is the legal representative, is or was a director, officer, employee or agent of Abraxis, or is or was serving as a director, officer, employee or agent of another entity at the request of Abraxis. Abraxis will indemnify such person with respect to legal proceedings initiated by such person only if such legal proceedings were approved by the Abraxis board of directors. | Celgene’s certificate of incorporation provides that Celgene will indemnify, to the fullest extent permitted by law, any person made or threatened to be made a party to an action or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that such person is or was a director, officer, incorporator, employee or agent of Celgene, or is or was serving as a director, officer, incorporator, employee or agent of another entity at the request of Celgene. | ||
DGCL Section 203 Election: | Under Delaware law a corporation can elect not to be governed by Section 203 of the DGCL, which generally protects publicly traded Delaware corporations from hostile takeovers and from certain actions following such takeovers. Abraxis has expressly opted not to be governed by Section 203 of the DGCL. | Under Delaware law a corporation can elect not to be governed by Section 203 of the DGCL, which generally protects publicly traded Delaware corporations from hostile takeovers and from certain actions following such takeovers. Celgene has not made this election and is therefore governed by Section 203 of the DGCL. | ||
Vote on Business Combinations: | Neither Abraxis’ certificate of incorporation nor its bylaws contain any provisions relating to business combinations. | Neither Celgene’s certificate of incorporation nor its bylaws contain any provisions relating to business combinations. |
106
Table of Contents
107
Table of Contents
108
Table of Contents
109
Table of Contents
110
Table of Contents
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
BALANCE SHEET
As of June 30, 2010
(In thousands)
Celgene | Abraxis | Pro Forma | See | Pro Forma | ||||||||||||||||
(Historical) | (Historical) | Adjustments | Note 4 | Consolidated | ||||||||||||||||
Assets | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 855,608 | $ | 171,724 | $ | (1,000,000 | ) | (a | ) | $ | 27,332 | |||||||||
Marketable securities available for sale | 2,289,009 | — | (1,478,056 | ) | (a | ) | 810,953 | |||||||||||||
Accounts receivable, net | 477,361 | 56,166 | — | 533,527 | ||||||||||||||||
Inventory | 100,797 | 60,834 | 111,554 | (b | ) | 273,185 | ||||||||||||||
Deferred income taxes | 68,751 | 25,510 | 107,218 | (e | ) | 201,479 | ||||||||||||||
Other current assets | 303,368 | 24,202 | (1,554 | ) | (b | ) | 326,016 | |||||||||||||
Total current assets: | 4,094,894 | 338,436 | (2,260,838 | ) | 2,172,492 | |||||||||||||||
Property, plant and equipment, net | 309,401 | 262,160 | — | 571,561 | ||||||||||||||||
Investment in affiliated companies | 23,580 | 16,412 | — | 39,992 | ||||||||||||||||
Intangible assets, net | 806,313 | 131,807 | 2,538,193 | (c | ) | 3,476,313 | ||||||||||||||
Goodwill | 764,612 | 253,821 | 892,432 | (d | ) | 1,910,865 | ||||||||||||||
Other assets | 179,438 | 57,484 | (24,658 | ) | (e | ) | 212,264 | |||||||||||||
Total assets | $ | 6,178,238 | $ | 1,060,120 | $ | 1,145,129 | $ | 8,383,487 | ||||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Accounts payable | $ | 66,975 | $ | 18,263 | $ | 48,831 | (f | ) | $ | 134,069 | ||||||||||
Accrued expenses | 307,965 | 84,563 | 103,208 | (g | ) | 495,736 | ||||||||||||||
Accrued litigation costs | — | 57,635 | — | 57,635 | ||||||||||||||||
Related party payable | — | — | — | — | ||||||||||||||||
Income taxes payable | 9,013 | — | — | 9,013 | ||||||||||||||||
Current portion of deferred revenue | 2,886 | 2,880 | — | 5,766 | ||||||||||||||||
Other current liabilities | 86,564 | — | — | 86,564 | ||||||||||||||||
Total current liabilities: | 473,403 | 163,341 | 152,039 | 788,783 | ||||||||||||||||
Contingent value rights | — | — | 300,000 | (h | ) | 300,000 | ||||||||||||||
Deferred revenue, net of current portion | 9,267 | 2,624 | — | 11,891 | ||||||||||||||||
Non-current income taxes payable | 458,694 | — | — | 458,694 | ||||||||||||||||
Deferred income taxes, non-current | — | 31,686 | 963,549 | (e | ) | 995,235 | ||||||||||||||
Other non-current liabilities | 309,064 | 10,862 | — | 319,926 | ||||||||||||||||
Total liabilities | 1,250,428 | 208,513 | 1,415,588 | 2,874,529 | ||||||||||||||||
Equity: | ||||||||||||||||||||
Stockholders’ equity: | ||||||||||||||||||||
Common stock | 4,697 | 40 | 66 | (i | ) | 4,803 | ||||||||||||||
Common stock in treasury, at cost | (458,417 | ) | — | — | (458,417 | ) | ||||||||||||||
Additional paid-in capital | 5,565,056 | 1,236,298 | (646,404 | ) | (j | ) | 6,154,950 | |||||||||||||
Accumulated deficit | (242,452 | ) | (394,668 | ) | 376,612 | (k | ) | (260,508 | ) | |||||||||||
Accumulated other comprehensive income | 58,926 | 733 | (733 | ) | (l | ) | 58,926 | |||||||||||||
Total stockholders’ equity | 4,927,810 | 842,403 | (270,459 | ) | 5,499,754 | |||||||||||||||
Noncontrolling interest | — | 9,204 | — | 9,204 | ||||||||||||||||
Total equity | 4,927,810 | 851,607 | (270,459 | ) | 5,508,958 | |||||||||||||||
Total liabilities and equity | $ | 6,178,238 | $ | 1,060,120 | $ | 1,145,129 | $ | 8,383,487 | ||||||||||||
111
Table of Contents
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2010
(In thousands, except per share amounts)
Celgene | Abraxis | Pro Forma | See | Pro Forma | ||||||||||||||||
(Historical) | (Historical) | Adjustments | Note 4 | Consolidated | ||||||||||||||||
Revenue: | ||||||||||||||||||||
Net product sales | $ | 1,582,508 | $ | 239,233 | $ | — | (m.i | ) | $ | 1,821,741 | ||||||||||
Collaborative agreements and other revenue | 4,924 | 6,892 | (80 | ) | (m.i | ) | 11,736 | |||||||||||||
Royalty revenue | 56,514 | — | 80 | (m.i | ) | 56,594 | ||||||||||||||
Total revenue | 1,643,946 | 246,125 | — | 1,890,071 | ||||||||||||||||
Expenses: | ||||||||||||||||||||
Cost of goods sold (excluding amortization of acquired intangible assets) | 129,908 | 72,740 | — | 202,648 | ||||||||||||||||
Research and development | 547,418 | 69,334 | — | 616,752 | ||||||||||||||||
Selling, general and administrative | 427,241 | 110,273 | (1,169 | ) | (m.iii | ) | 536,345 | |||||||||||||
Amortization of acquired intangible assets | 88,661 | 20,276 | 17,077 | (m.ii | ) | 126,014 | ||||||||||||||
Acquisition related charges | 12,698 | — | (1,944 | ) | (m.iii | ) | 10,754 | |||||||||||||
Total expenses | 1,205,926 | 272,623 | 13,964 | 1,492,513 | ||||||||||||||||
Operating income (loss) | 438,020 | (26,498 | ) | (13,964 | ) | 397,558 | ||||||||||||||
Other income and expense: | ||||||||||||||||||||
Interest and investment income, net | 24,209 | 3,958 | (13,348 | ) | (m.iv | ) | 14,819 | |||||||||||||
Equity in (gains) losses of affiliated companies | (638 | ) | 1,855 | — | 1,217 | |||||||||||||||
Interest expense | 907 | — | — | 907 | ||||||||||||||||
Other (loss) income, net | (1,323 | ) | 968 | — | (355 | ) | ||||||||||||||
Income (loss) before income taxes | 460,637 | (23,427 | ) | (27,312 | ) | 409,898 | ||||||||||||||
Income tax provision (benefit) | 70,843 | (3,959 | ) | (10,925 | ) | (m.v | ) | 55,959 | ||||||||||||
Net income (loss) | 389,794 | (19,468 | ) | (16,387 | ) | 353,939 | ||||||||||||||
Net loss attributable to noncontrolling interest | — | (605 | ) | — | (605 | ) | ||||||||||||||
Net income (loss) attributable to common shareholders | $ | 389,794 | $ | (18,863 | ) | $ | (16,387 | ) | $ | 354,544 | ||||||||||
Net income per common share: | ||||||||||||||||||||
Basic | $ | 0.85 | $ | 0.75 | ||||||||||||||||
Diluted | $ | 0.83 | $ | 0.74 | ||||||||||||||||
Weighted average shares: | ||||||||||||||||||||
Basic | 460,112 | 10,574 | (n | ) | 470,686 | |||||||||||||||
Diluted | 467,557 | 10,574 | (n | ) | 478,131 |
112
Table of Contents
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
For the Year Ended December 31, 2009
(In thousands, except per share amounts)
Celgene | Abraxis | Pro Forma | See | Pro Forma | ||||||||||||||||
(Historical) | (Historical) | Adjustments | Note 4 | Consolidated | ||||||||||||||||
Revenue: | ||||||||||||||||||||
Net product sales | $ | 2,567,354 | $ | 314,545 | $ | (749 | ) | (m.i | ) | $ | 2,881,150 | |||||||||
Collaborative agreements and other revenue | 13,743 | 44,505 | — | 58,248 | ||||||||||||||||
Royalty revenue | 108,796 | — | 749 | (m.i | ) | 109,545 | ||||||||||||||
Total revenue | 2,689,893 | 359,050 | — | 3,048,943 | ||||||||||||||||
Expenses: | ||||||||||||||||||||
Cost of goods sold (excluding amortization of acquired intangible assets) | 216,289 | 63,665 | — | 279,954 | ||||||||||||||||
Research and development | 794,848 | 154,615 | — | 949,463 | ||||||||||||||||
Selling, general and administrative | 753,827 | 200,734 | — | 954,561 | ||||||||||||||||
Amortization of acquired intangible assets | 83,403 | 39,782 | 34,924 | (m.ii | ) | 158,109 | ||||||||||||||
Impairment charge | — | 13,999 | — | 13,999 | ||||||||||||||||
Total expenses | 1,848,367 | 472,795 | 34,924 | 2,356,086 | ||||||||||||||||
Operating income (loss) | 841,526 | (113,745 | ) | (34,924 | ) | 692,857 | ||||||||||||||
Other income and expense: | ||||||||||||||||||||
Interest and investment income, net | 76,785 | 3,052 | (71,220 | ) | (m.iv | ) | 8,617 | |||||||||||||
Equity in losses (gains) of affiliated companies | 1,103 | (2,090 | ) | — | (987 | ) | ||||||||||||||
Interest expense | 1,966 | — | — | 1,966 | ||||||||||||||||
Other income, net | 60,461 | 1,255 | — | 61,716 | ||||||||||||||||
Income (loss) before income taxes | 975,703 | (107,348 | ) | (106,144 | ) | 762,211 | ||||||||||||||
Income tax provision (benefit) | 198,956 | (2,580 | ) | (42,458 | ) | (m.v | ) | 153,918 | ||||||||||||
Net income (loss) | 776,747 | (104,768 | ) | (63,686 | ) | 608,293 | ||||||||||||||
Net loss attributable to noncontrolling interest | — | (1,652 | ) | — | (1,652 | ) | ||||||||||||||
Net income (loss) attributable to common shareholders | $ | 776,747 | $ | (103,116 | ) | $ | (63,686 | ) | $ | 609,945 | ||||||||||
Net income per common share: | ||||||||||||||||||||
Basic | $ | 1.69 | $ | 1.30 | ||||||||||||||||
Diluted | $ | 1.66 | $ | 1.28 | ||||||||||||||||
Weighted average shares: | ||||||||||||||||||||
Basic | 459,304 | 10,574 | (n | ) | 469,878 | |||||||||||||||
Diluted | 467,354 | 10,574 | (n | ) | 477,928 |
113
Table of Contents
FINANCIAL STATEMENTS
(1) | Description of Transaction |
(2) | Contingent Value Rights |
114
Table of Contents
FINANCIAL STATEMENTS — (Continued)
(3) | Estimated Purchase Price |
• | To holders of Abraxis common stock, for each share of Abraxis common stock: (1) $58.00 in cash, without interest, (2) 0.2617 of a share of Celgene common stock and (3) one CVR, and reflect approximately 40.4 million shares of Abraxis common stock to be exchanged in the merger, based on the number of Abraxis common stock outstanding at June 30, 2010. | |
• | To holders of Abraxis stock options and stock appreciation rights with an exercise price or base appreciation amount below the per share amount (as defined above), for each stock option or stock appreciation right, as applicable: (1) a cash payment equal to the difference between the per share amount and the exercise price or base appreciation amount of the stock option or stock appreciation right, as applicable, and (2) one CVR. | |
• | To holders of Abraxis restricted stock units, for each restricted stock unit: (1) a cash payment equal to the per share amount and (2) one CVR. |
115
Table of Contents
FINANCIAL STATEMENTS — (Continued)
June 30, 2010 | ||||
(In thousands) | ||||
Estimated amount of cash to be received by Abraxis stockholders, stock option holders, stock appreciation right holders and restricted stock unit holders | $ | 2,460,000 | ||
Estimated fair value of shares of Celgene common stock to be issued | 590,000 | |||
Estimated fair value of contingent value rights | 300,000 | |||
Total preliminary estimated purchase price | $ | 3,350,000 | ||
June 30, 2010 | ||||
(In thousands) | ||||
Net book value of assets acquired as of June 30, 2010 | $ | 842,403 | ||
Less: Write-off of existing goodwill, other intangible assets and certain deferred taxes | (242,617 | ) | ||
Adjusted net book value of assets acquired | 599,786 | |||
Remaining allocation: | ||||
Increase inventory to fair value(i) | 110,000 | |||
Acquired identifiable intangible assets at fair value: | ||||
Developed products(ii) | 1,200,000 | |||
In-process research and development (iii) | 1,400,000 | |||
Licensing agreement and other(ii) | 70,000 | |||
Abraxis transaction costs(iv) | (48,831 | ) | ||
Fair value adjustment of contingent liability | (103,208 | ) | ||
Deferred income taxes | (1,024,000 | ) | ||
Goodwill(v) | 1,146,253 | |||
Total preliminary estimated purchase price | $ | 3,350,000 | ||
(i) | The estimated fair value of inventory is based on estimated fair value of finished goods on hand and estimated completion of work in progress. | |
(ii) | Developed products relate to Abraxane® for the treatment of breast cancer, which has a finite life estimated at 17 years. The licensing agreement and other also have finite lives primarily estimated at 17 years. | |
(iii) | In-process research and development, which we refer to as IPR&D, represents the research and development projects of Abraxis which were in-process, but not yet completed, and which Celgene plans to complete. They include the development of Abraxane® for treatment of pancreatic cancer and non-small cell lung cancer. Current accounting standards require that the fair value of IPR&D projects acquired in a business combination be capitalized at the acquisition date and subsequently accounted as an indefinite-lived intangible asset until completion or abandonment of the associated research and development efforts. Accordingly, during the development period after the completion of the merger, these assets will not be amortized into earnings; instead these assets will be subject to periodic impairment testing. Upon successful completion of the development process for an acquired in-process research and development project, determination as to the useful life of the asset will be made. The asset would then be considered a finite-lived intangible asset and amortization of the asset into earnings would begin over the estimated useful life of the asset. |
116
Table of Contents
FINANCIAL STATEMENTS — (Continued)
As part of the final purchase price allocation, the fair value estimates will be finalized and adjusted, if necessary, using estimated fair values as of the date of completion of the merger. | ||
(iv) | Adjustment relates to the transaction costs to be incurred by Abraxis in connection with the merger, which will reduce Abraxis’ net working capital to be acquired by Celgene at the completion of the merger. | |
(v) | The amount allocated to goodwill is preliminary and subject to change, depending on the results of the final purchase price allocation. In accordance with current accounting standards, goodwill associated with the transaction will not be amortized and will be subject to review for impairment. |
(4) | Pro Forma Adjustments |
June 30, 2010 | ||||
(In thousands) | ||||
Estimated amount of cash to be received by Abraxis stockholders, stock option holders, and restricted stock unit holders | $ | 2,460,000 | ||
Celgene’s estimated transaction fees (to accumulated deficit) | 18,056 | |||
Total | $ | 2,478,056 | ||
To be funded by: | ||||
Cash and cash equivalents | $ | 1,000,000 | ||
Marketable securities available for sale | 1,478,056 | |||
Total | $ | 2,478,056 | ||
117
Table of Contents
FINANCIAL STATEMENTS — (Continued)
June 30, 2010 | ||||
(In thousands) | ||||
Inventorystep-up | $ | 110,000 | ||
Reclassification from other current assets to inventory | 1,554 | |||
Total | $ | 111,554 | ||
June 30, 2010 | ||||
(In thousands) | ||||
Elimination of Abraxis intangible assets | $ | (131,807 | ) | |
Acquired identifiable amortizable intangible assets: | ||||
Developed products | 1,200,000 | |||
In-process research and development | 1,400,000 | |||
Licensing agreements and other | 70,000 | |||
Total | $ | 2,538,193 | ||
June 30, 2010 | ||||
(In thousands) | ||||
Elimination of pre-existing Abraxis goodwill | $ | (253,821 | ) | |
Acquired goodwill(i) | 1,146,253 | |||
Total | $ | 892,432 | ||
(i) | Goodwill is the excess of the purchase price over the interest in the fair value of the acquired assets and liabilities. The purchase price, summarized in Note 3 above, includes equity consideration, and therefore, is dependent upon the value of Celgene common stock. Thus, changes in the market value of Celgene common stock will result in changes in the purchase price and consequently in goodwill. Based on the price of Celgene common stock at June 30, 2010, a 10% increase or decrease in market value of the common stock will result in an increase or decrease in goodwill of approximately $54 million. |
118
Table of Contents
FINANCIAL STATEMENTS — (Continued)
June 30, 2010 | ||||
(In thousands) | ||||
Deferred income taxes (current): | ||||
To release the valuation allowance against the current deferred income tax assets of Abraxis | $ | 60,072 | ||
To record deferred taxes on a fair value adjustment to the contingent liability in purchase accounting (see(g) below for additional information) | 47,146 | |||
Total | $ | 107,218 | ||
Deferred income taxes (non-current): | ||||
To release the valuation allowance against the non-current deferred income tax assets of Abraxis | $ | (71,325 | ) | |
To record non-current deferred tax liabilities net of non-current tax assets | $ | (24,658 | ) | |
To record deferred taxes on a fair value adjustment to the assets and liabilities of Abraxis in purchase accounting | 1,059,532 | |||
Total | $ | 963,549 | ||
June 30, 2010 | ||||
(In thousands) | ||||
Elimination of Abraxis common stock | $ | (40 | ) | |
Issuance of Celgene common stock(i) | 106 | |||
Total | $ | 66 | ||
(i) | Based on the exchange of 40.4 million shares of Abraxis common stock (obtained from the number of shares of Abraxis common stock outstanding at June 30, 2010), the 0.2617 exchange ratio and the $0.01 par value of Celgene common stock. |
119
Table of Contents
FINANCIAL STATEMENTS — (Continued)
June 30, 2010 | ||||
(In thousands) | ||||
Elimination of Abraxis additional paid-in capital | $ | (1,236,298 | ) | |
Issuance of Celgene common stock | 589,894 | |||
Total | $ | (646,404 | ) | |
June 30, 2010 | ||||
(In thousands) | ||||
Elimination of Abraxis accumulated deficit | $ | 394,668 | ||
Transaction fees (see(a) above) | (18,056 | ) | ||
Total | $ | 376,612 | ||
Increase (Decrease) | ||||||||
Revenues and Expenses | ||||||||
Year Ended | Six Months Ended | |||||||
December 31, 2009 | June 30, 2010 | |||||||
(In thousands) | ||||||||
Revenue: | ||||||||
Net product sales(i) | $ | (749 | ) | $ | — | |||
Collaborative agreements and other revenue(i) | — | (80 | ) | |||||
Royalty revenue(i) | $ | 749 | $ | 80 | ||||
Total | $ | — | $ | — | ||||
Expenses: | ||||||||
Amortization of acquired intangible assets(ii) | $ | 34,924 | $ | 17,077 | ||||
Acquisition and general administrative charges(iii) | — | (3,113 | ) | |||||
Total | $ | 34,924 | $ | 13,964 | ||||
Other income and expense: | ||||||||
Interest and investment income, net(iv) | $ | (71,220 | ) | $ | (13,348 | ) | ||
Total | $ | (71,220 | ) | $ | (13,348 | ) | ||
Income tax provision (benefit)(v) | $ | (42,458 | ) | $ | (10,925 | ) | ||
Total | $ | (42,458 | ) | $ | (10,925 | ) | ||
(i) | To conform Abraxis’ royalty revenues to Celgene’s presentation. | |
(ii) | Adjustment reflects amortization expenses for finite-lived intangible assets acquired by Celgene upon the completion of the merger less the historical amortization of intangible assets from Abraxis. | |
(iii) | To adjust for $1,944 and $1,169 of acquisition charges paid by Celgene and Abraxis, respectively, during the six-month period ended June 30, 2010. |
120
Table of Contents
FINANCIAL STATEMENTS — (Continued)
(iv) | To record interest income forgone on net cash and cash equivalents and marketable securities available for sale anticipated to be used in the merger. | |
(v) | To record the income tax benefit, calculated using Celgene’s U.S. statutory tax rate estimated at 40%, as a result of pro forma adjustments (ii) and (iii). |
(5) | Subsequent integration costs |
121
Table of Contents
122
Table of Contents
• | Abraxis’ Annual Report onForm 10-K for the year ended December 31, 2009; | |
• | Abraxis’ Annual Report onForm 10-K/A for the year ended December 31, 2009; | |
• | Abraxis’ Quarterly Reports onForm 10-Q for the quarters ended March 31, 2010 and June 30, 2010; and | |
• | Abraxis’ Current Reports onForm 8-K filed with the SEC on January 28, 2010, February 5, 2010, June 30, 2010 and July 1, 2010. |
123
Table of Contents
• | Celgene’s Annual Report onForm 10-K for the year ended December 31, 2009; | |
• | Celgene’s Quarterly Reports onForm 10-Q for the quarters ended March 31, 2010 and June 30, 2010; and | |
• | Celgene’s Current Reports onForm 8-K filed with the SEC on January 6, 2010, January 15, 2010, February 12, 2010, April 15, 2010, June 18, 2010, June 30, 2010, July 1, 2010, August 4, 2010 and August 27, 2010. |
124
Table of Contents
OF MERGER
DATED AS OF
JUNE 30, 2010
AMONG
CELGENE CORPORATION,
ARTISTRY ACQUISITION CORP.
AND
ABRAXIS BIOSCIENCE, INC.
Table of Contents
Page | ||||||
ARTICLE I THE MERGER | A-1 | |||||
Section 1.1 | The Merger | A-1 | ||||
Section 1.2 | Effective Time of the Merger | A-1 | ||||
Section 1.3 | Certificate of Incorporation | A-1 | ||||
Section 1.4 | By-laws | A-1 | ||||
Section 1.5 | Board of Directors and Officers | A-2 | ||||
Section 1.6 | Effects of Merger | A-2 | ||||
ARTICLE II CONVERSION OF SHARES | A-2 | |||||
Section 2.1 | Conversion of Shares | A-2 | ||||
Section 2.2 | Payment and Exchange of Certificates | A-2 | ||||
Section 2.3 | Dissenting Company Shares | A-4 | ||||
Section 2.4 | No Further Ownership Rights in the Shares | A-5 | ||||
Section 2.5 | Closing of Company Transfer Books | A-5 | ||||
Section 2.6 | Adjustments | A-5 | ||||
Section 2.7 | Stock Options, RSUs, SARs | A-5 | ||||
Section 2.8 | Withholding of Tax | A-6 | ||||
Section 2.9 | Closing | A-6 | ||||
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY | A-7 | |||||
Section 3.1 | Organization, Standing and Power | A-7 | ||||
Section 3.2 | Capital Structure | A-8 | ||||
Section 3.3 | Authority; Non-Contravention | A-9 | ||||
Section 3.4 | SEC Documents | A-10 | ||||
Section 3.5 | Proxy Statement/Prospectus and Registration Statement | A-11 | ||||
Section 3.6 | Absence of Certain Events | A-11 | ||||
Section 3.7 | Litigation | A-12 | ||||
Section 3.8 | No Violation of Law | A-12 | ||||
Section 3.9 | Taxes | A-12 | ||||
Section 3.10 | Employee Benefit Plans; ERISA | A-13 | ||||
Section 3.11 | Employment Matters | A-15 | ||||
Section 3.12 | Environmental Matters | A-16 | ||||
Section 3.13 | Affiliate Transactions | A-17 | ||||
Section 3.14 | Intellectual Property | A-17 | ||||
Section 3.15 | Takeover Statutes | A-19 | ||||
Section 3.16 | Title to Properties; Assets/Services | A-19 | ||||
Section 3.17 | Material Contracts | A-19 | ||||
Section 3.18 | Opinion of Financial Advisors | A-20 | ||||
Section 3.19 | Pharmaceutical Matters | A-21 | ||||
Section 3.20 | Brokers and Finders | A-22 | ||||
Section 3.21 | Insurance | A-22 | ||||
Section 3.22 | Anti-Corruption and Anti-Bribery | A-22 | ||||
Section 3.23 | No Other Representations or Warranties | A-23 |
A-i
Table of Contents
Page | ||||||
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB | A-23 | |||||
Section 4.1 | Organization, Standing and Power | A-23 | ||||
Section 4.2 | Capital Structure | A-23 | ||||
Section 4.3 | Operations of Sub | A-24 | ||||
Section 4.4 | Authority; Non-Contravention | A-24 | ||||
Section 4.5 | SEC Documents | A-25 | ||||
Section 4.6 | Absence of Certain Events | A-26 | ||||
Section 4.7 | Proxy Statement/Prospectus and Registration Statement | A-27 | ||||
Section 4.8 | Availability of Funds; Parent Common Stock | A-27 | ||||
Section 4.9 | Litigation | A-27 | ||||
Section 4.10 | No Violation of Law | A-27 | ||||
Section 4.11 | Brokers and Finders | A-28 | ||||
Section 4.12 | Ownership of Shares | A-28 | ||||
Section 4.13 | Solvency | A-28 | ||||
Section 4.14 | No Other Representations or Warranties | A-28 | ||||
ARTICLE V COVENANTS RELATING TO CONDUCT OF BUSINESS | A-28 | |||||
Section 5.1 | Conduct of Business by the Company Pending the Merger | A-28 | ||||
Section 5.2 | Control of the Company’s Operations | A-30 | ||||
ARTICLE VI ADDITIONAL AGREEMENTS | A-31 | |||||
Section 6.1 | Company Stockholder Approval; Proxy Statement | A-31 | ||||
Section 6.2 | Directors’ and Officers’ Indemnification | A-32 | ||||
Section 6.3 | No Solicitation | A-33 | ||||
Section 6.4 | Access to Information; Confidentiality | A-34 | ||||
Section 6.5 | Reasonable Best Efforts; Notification | A-35 | ||||
Section 6.6 | Benefit Plans | A-36 | ||||
Section 6.7 | Fees and Expenses | A-37 | ||||
Section 6.8 | Public Announcements | A-38 | ||||
Section 6.9 | Sub | A-38 | ||||
Section 6.10 | CVR Agreement | A-38 | ||||
Section 6.11 | Transfer Taxes | A-38 | ||||
Section 6.12 | Listing | A-39 | ||||
Section 6.13 | Certain Notices | A-39 | ||||
Section 6.14 | Section 16 Matters | A-39 | ||||
Section 6.15 | State Takeover Laws | A-39 | ||||
Section 6.16 | FIRPTA Statement | A-39 | ||||
Section 6.17 | Further Actions | A-39 | ||||
ARTICLE VII CONDITIONS PRECEDENT | A-40 | |||||
Section 7.1 | Conditions to Each Party’s Obligation to Effect the Merger | A-40 | ||||
Section 7.2 | Additional Conditions to Obligations of Parent and Sub | A-40 | ||||
Section 7.3 | Additional Conditions to Obligations of the Company | A-40 | ||||
Section 7.4 | Frustration of Closing Conditions | A-41 | ||||
Section 7.5 | Invoking Certain Provisions | A-41 |
A-ii
Table of Contents
Page | ||||||
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER | A-41 | |||||
Section 8.1 | Termination | A-41 | ||||
Section 8.2 | Effect of Termination | A-42 | ||||
Section 8.3 | Amendment | A-42 | ||||
Section 8.4 | Extension; Waiver | A-42 | ||||
Section 8.5 | Procedure for Termination, Amendment, Extension or Waiver | A-43 | ||||
ARTICLE IX MISCELLANEOUS | A-43 | |||||
Section 9.1 | Non-Survival of Representations, Warranties and Agreements | A-43 | ||||
Section 9.2 | Notices | A-43 | ||||
Section 9.3 | Specific Performance | A-44 | ||||
Section 9.4 | Assignment; Binding Effect | A-44 | ||||
Section 9.5 | Entire Agreement | A-45 | ||||
Section 9.6 | Governing Law | A-45 | ||||
Section 9.7 | Counterparts | A-45 | ||||
Section 9.8 | Headings and Table of Contents; Interpretation | A-45 | ||||
Section 9.9 | No Third Party Beneficiaries | A-45 | ||||
Section 9.10 | Incorporation of Exhibits | A-45 | ||||
Section 9.11 | Severability | A-45 | ||||
Section 9.12 | Subsidiaries | A-46 | ||||
Section 9.13 | Person | A-46 | ||||
Section 9.14 | Applicable Jurisdictions | A-46 | ||||
Section 9.15 | Knowledge of the Company; Knowledge of Parent | A-46 | ||||
Section 9.16 | Mutual Drafting | A-46 | ||||
Section 9.17 | Tax Reporting | A-46 |
A-iii
Table of Contents
Page | ||
2007 Separation and Distribution Agreement | Section 3.9(f) | |
2007 Spin-Off | Section 3.9(f) | |
2007 Tax Allocation Agreement | Section 3.9(f) | |
Acquisition Proposal | Section 6.3(a) | |
Affiliate | Section 3.13 | |
Agreement | Preamble | |
Anti-Corruption and Anti-Bribery Laws | Section 3.22(a) | |
Antitrust Approval | Section 7.1(c) | |
Antitrust Division | Section 6.5(b) | |
Applicable Exercise Price | Section 2.7(a)(i) | |
Applicable Jurisdiction | Section 9.14 | |
Applicable SAR Base Amount | Section 2.7(b)(i) | |
Board of Directors | Section 2.7(e) | |
Book Entry Shares | Section 2.1(a)(ii) | |
Business Day | Section 2.2(a) | |
Cash Consideration | Section 2.1(a)(ii) | |
Certificate of Incorporation | Section 1.3 | |
Certificate of Merger | Section 1.2 | |
Certificates | Section 2.1(a)(ii) | |
Closing | Section 2.9 | |
Closing Date | Section 2.9 | |
Code | Section 2.8 | |
Company | Preamble | |
Company Common Stock | Section 2.1(a)(i) | |
Company Contract | Section 3.3(b) | |
Company Financial Advisors | Section 3.18 | |
Company Financial Statements | Section 3.4(a) | |
Company Intellectual Property | Section 3.14(b) | |
Company Material Adverse Effect | Section 3.1 | |
Company Patents | Section 3.14(e) | |
Company Permits | Section 3.8 | |
Company SEC Documents | Section 3.4(a) | |
Company Stock Plan | Section 2.7(a)(i) | |
Company Stockholder Meeting | Section 6.1(a) | |
Confidentiality Agreement | Section 6.4 | |
Consent | Section 3.3(c) | |
Contract | Section 3.3(b) | |
control | Section 3.13 | |
Copyrights | Section 3.14 | |
CVR | Section 2.1(a)(ii) | |
CVR Agreement | Recitals | |
CVR Certificate | Section 2.1(a)(ii) | |
DGCL | Section 1.1 | |
Disclosure Schedule | Article III | |
Dissenting Company Shares | Section 2.3 | |
Effective Time | Section 1.2 | |
Effects | Section 3.1 | |
Employee | Section 6.6(a) | |
Employee Benefit Plans | Section 3.10(a) | |
Employment Practices | Section 3.11(b) |
A-iv
Table of Contents
Page | ||
Environmental Laws | Section 3.12(c) | |
Environmental Liabilities | Section 3.12(c) | |
ERISA | Section 3.10(a) | |
ERISA Affiliate | Section 3.10(a) | |
Exchange Act | Article III | |
Exchange Fund | Section 2.2(b) | |
Exchange Ratio | Section 2.1(a)(ii) | |
Excluded Company Shares | Section 2.1(a)(i) | |
Exercise Period | Section 2.7(a)(i) | |
FDA | Section 3.19(a) | |
FDCA | Section 3.19(a) | |
Foreign Plan | Section 3.10(h) | |
FTC | Section 6.5(b) | |
Governmental Entity | Section 3.3(c) | |
Hazardous Materials | Section 3.12(c) | |
HSR Act | Section 3.3(c) | |
Indemnified Parties | Section 6.2(b) | |
Indemnified Party | Section 6.2(b) | |
Insurance Policies | Section 3.21 | |
Intellectual Property | Section 3.14 | |
IRS | Section 3.10(b) | |
Knowledge of Parent | Section 9.15 | |
Knowledge of the Company | Section 9.15 | |
Law | Section 3.3(b) | |
Leased Real Property | Section 3.16(a) | |
Liens | Section 3.2(d) | |
Material Contract | Section 3.17(a) | |
Material Employment Agreement | Section 3.10(a) | |
Merger | Recitals | |
Merger Consideration | Section 2.1(a)(ii) | |
Nab®Technology | Section 3.14 | |
NASDAQ | Section 3.1 | |
Non-Competition and Confidentiality Agreement | Recitals | |
Option | Section 2.7(a)(i) | |
Options | Section 2.7(a)(i) | |
Parent | Preamble | |
Parent Common Stock | Section 2.1(a)(ii) | |
Parent Financial Statements | Section 4.5(a) | |
Parent Material Adverse Effect | Section 4.6 | |
Parent Permits | Section 4.10 | |
Parent Plans | Section 6.6(b) | |
Parent Review Period | Section 6.3(c) | |
Parent SEC Documents | Section 4.5(a) | |
Parent Share Cash Value | Section 2.2(e) | |
Patents | Section 3.14 | |
Paying Agent | Section 2.2(a) | |
Per Share Amount | Section 2.7(a)(i) | |
Person | Section 9.13 | |
Pharmaceutical Products | Section 3.14 | |
Pipeline Products | Section 3.14 | |
Proceeding | Section 3.7 |
A-v
Table of Contents
Page | ||
Product | Section 3.14 | |
Programs | Section 3.19(c) | |
Proxy Statement/Prospectus | Section 2.2(a) | |
Real Property | Section 3.16(a) | |
Registration | Section 3.3(c) | |
Registration Statement | Section 2.2(a) | |
Regulatory Authorities | Section 3.19(a) | |
Regulatory Registrations | Section 3.19(f) | |
Related Agreements | Recitals | |
Representatives | Section 6.3(a) | |
RSU | Section 2.7(c)) | |
RSUs | Section 2.7(c) | |
SAR | Section 2.7(b)(i) | |
Sarbanes Oxley Act | Section 3.4(c) | |
SARs | Section 2.7(b)(i) | |
Screening Test | Section 3.19(a) | |
SEC | Section 3.4(a) | |
Section 16 | Section 6.14 | |
Securityholders | Section 2.2(b) | |
Solvent | Section 4.13 | |
Stock Consideration | Section 2.1(a)(ii) | |
Stockholder Approval | Section 7.1(a) | |
Sub | Preamble | |
Subsidiary | Section 9.12 | |
Superior Proposal | Section 6.3(b) | |
Surviving Corporation | Section 1.1 | |
Tax | Section 3.9(f) | |
Tax Return | Section 3.9(f) | |
Termination Date | Section 8.1(b)(i) | |
Trade Secrets | Section 3.14 | |
Trademarks | Section 3.14 | |
Transfer Taxes | Section 6.11 | |
Transition Period | Section 6.6(a) | |
Trust Indenture Act | Section 4.4(c) | |
Trustee | Recitals | |
U.S. GAAP | Section 3.1 | |
Voting Agreement | Recitals | |
WARN Act | Section 3.11(e)(i) | |
willful and material breach | Section 8.2 | |
Worker | Section 3.11(c) | |
Workers | Section 3.11(c) |
A-vi
Table of Contents
A-1
Table of Contents
A-2
Table of Contents
A-3
Table of Contents
A-4
Table of Contents
A-5
Table of Contents
A-6
Table of Contents
A-7
Table of Contents
A-8
Table of Contents
A-9
Table of Contents
A-10
Table of Contents
A-11
Table of Contents
A-12
Table of Contents
A-13
Table of Contents
A-14
Table of Contents
A-15
Table of Contents
A-16
Table of Contents
A-17
Table of Contents
A-18
Table of Contents
A-19
Table of Contents
A-20
Table of Contents
Section 3.19 | Pharmaceutical Matters. |
A-21
Table of Contents
A-22
Table of Contents
A-23
Table of Contents
A-24
Table of Contents
A-25
Table of Contents
A-26
Table of Contents
A-27
Table of Contents
A-28
Table of Contents
A-29
Table of Contents
A-30
Table of Contents
A-31
Table of Contents
A-32
Table of Contents
A-33
Table of Contents
A-34
Table of Contents
A-35
Table of Contents
A-36
Table of Contents
A-37
Table of Contents
A-38
Table of Contents
A-39
Table of Contents
A-40
Table of Contents
A-41
Table of Contents
A-42
Table of Contents
11755 Wilshire Blvd., 20th Floor
Los Angeles, CA 90025
Tel: 310.883.1300
Fax: 310.998.8553
Attention: | Dr. Patrick Soon-Shiong, Executive Chairman pss@abraxisbio.com |
11755 Wilshire Blvd., 20th Floor
Los Angeles, CA 90025
Tel: 310.883.1300
Fax: 310.998.8553
Attention: | Charles Kim, General Counsel CKim@abraxisbio.com |
One New York Plaza
New York, New York 10004
Tel: 212.859.8000
Fax: 212.859.4000
Attention: | Philip Richter, Esq. philip.richter@friedfrank.com Brian Mangino, Esq. brian.mangino@friedfrank.com |
A-43
Table of Contents
86 Morris Avenue
Summit, New Jersey 07901
Tel: 908.673.9000
Fax: 908.673.2769
Attention: | George Golumbeski, Senior Vice President Business Development ggolumbeski@celgene.com |
86 Morris Avenue
Summit, New Jersey 07901
Tel: 908.673.9000
Fax: 908.673.2771
Attention: | Thomas Perone, Corporate Counsel tperone@celgene.com |
3161 Michelson Drive
Suite 800
Irvine, CA 92612
Tel: 949.851.3939
Fax: 949.553.7539
Attention: | Jonn R. Beeson, Esq. jbeeson@jonesday.com Kevin Espinola, Esq. kbespinola@jonesday.com |
A-44
Table of Contents
A-45
Table of Contents
A-46
Table of Contents
By: | /s/ Robert J. Hugin |
Title: | Chief Executive Officer |
By: | /s/ Sandesh Mahatme |
Title: | Secretary and Treasurer |
By: | /s/ Dr. Patrick Soon-Shiong |
Title: | Executive Chairman |
A-47
Table of Contents
CONTINGENT VALUE RIGHTS AGREEMENT
by and between
CELGENE CORPORATION
and
AMERICAN STOCK TRANSFER AND TRUST COMPANY
Dated as of [ • ], 2010
Table of Contents
ARTICLE 1 DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION | B-1 | |||||
Section 1.1 | Definitions | B-1 | ||||
Section 1.2 | Compliance and Opinions | B-10 | ||||
Section 1.3 | Form of Documents Delivered to Trustee | B-10 | ||||
Section 1.4 | Acts of Holders | B-10 | ||||
Section 1.5 | Notices, etc., to Trustee and Company | B-11 | ||||
Section 1.6 | Notice to Holders; Waiver | B-11 | ||||
Section 1.7 | Conflict with Trust Indenture Act | B-12 | ||||
Section 1.8 | Effect of Headings and Table of Contents | B-12 | ||||
Section 1.9 | Benefits of Agreement | B-12 | ||||
Section 1.10 | Governing Law | B-12 | ||||
Section 1.11 | Legal Holidays | B-12 | ||||
Section 1.12 | Separability Clause | B-12 | ||||
Section 1.13 | No Recourse Against Others | B-12 | ||||
Section 1.14 | Counterparts | B-13 | ||||
Section 1.15 | Acceptance of Trust | B-13 | ||||
ARTICLE 2 SECURITY FORMS | B-13 | |||||
Section 2.1 | Forms Generally | B-13 | ||||
ARTICLE 3 THE SECURITIES | B-13 | |||||
Section 3.1 | Title and Terms | B-13 | ||||
Section 3.2 | Registrable Form | B-14 | ||||
Section 3.3 | Execution, Authentication, Delivery and Dating | B-14 | ||||
Section 3.4 | Temporary Securities | B-15 | ||||
Section 3.5 | Registration, Registration of Transfer and Exchange | B-15 | ||||
Section 3.6 | Mutilated, Destroyed, Lost and Stolen Securities | B-16 | ||||
Section 3.7 | Payments with respect to CVR Certificates | B-16 | ||||
Section 3.8 | Persons Deemed Owners | B-16 | ||||
Section 3.9 | Cancellation | B-16 | ||||
ARTICLE 4 THE TRUSTEE | B-16 | |||||
Section 4.1 | Certain Duties and Responsibilities | B-16 | ||||
Section 4.2 | Certain Rights of Trustee | B-17 | ||||
Section 4.3 | Notice of Default | B-18 | ||||
Section 4.4 | Not Responsible for Recitals or Issuance of Securities | B-18 | ||||
Section 4.5 | May Hold Securities | B-18 | ||||
Section 4.6 | Money Held in Trust | B-18 | ||||
Section 4.7 | Compensation and Reimbursement | B-18 | ||||
Section 4.8 | Disqualification; Conflicting Interests | B-19 | ||||
Section 4.9 | Corporate Trustee Required; Eligibility | B-19 | ||||
Section 4.10 | Resignation and Removal; Appointment of Successor | B-19 | ||||
Section 4.11 | Acceptance of Appointment of Successor | B-20 | ||||
Section 4.12 | Merger, Conversion, Consolidation or Succession to Business | B-20 | ||||
Section 4.13 | Preferential Collection of Claims Against Company | B-20 |
B-i
Table of Contents
ARTICLE 5 HOLDERS’ LISTS AND REPORTS BY THE TRUSTEE AND COMPANY | B-21 | |||||
Section 5.1 | Company to Furnish Trustee Names and Addresses of Holders | B-21 | ||||
Section 5.2 | Preservation of Information; Communications to Holders | B-21 | ||||
Section 5.3 | Reports by Trustee | B-21 | ||||
Section 5.4 | Reports by Company | B-21 | ||||
ARTICLE 6 AMENDMENTS | B-22 | |||||
Section 6.1 | Amendments Without Consent of Holders | B-22 | ||||
Section 6.2 | Amendments with Consent of Holders | B-23 | ||||
Section 6.3 | Execution of Amendments | B-23 | ||||
Section 6.4 | Effect of Amendments; Notice to Holders | B-23 | ||||
Section 6.5 | Conformity with Trust Indenture Act | B-23 | ||||
Section 6.6 | Reference in Securities to Amendments | B-23 | ||||
ARTICLE 7 COVENANTS | B-24 | |||||
Section 7.1 | Payment of Amounts, if any, to Holders | B-24 | ||||
Section 7.2 | Maintenance of Office or Agency | B-24 | ||||
Section 7.3 | Money for Security Payments to Be Held in Trust | B-24 | ||||
Section 7.4 | Certain Purchases and Sales | B-25 | ||||
Section 7.5 | Books and Records | B-25 | ||||
Section 7.6 | Audits | B-25 | ||||
Section 7.7 | Listing of CVRs | B-26 | ||||
Section 7.8 | Conflicting Arrangements | B-26 | ||||
Section 7.9 | Product Transfer | B-26 | ||||
Section 7.10 | Milestones | B-26 | ||||
Section 7.11 | Product Sale and Development | B-26 | ||||
Section 7.12 | Notice of Default | B-27 | ||||
Section 7.13 | Confidentiality | B-27 | ||||
Section 7.14 | Non-Use of Name | B-27 | ||||
ARTICLE 8 REMEDIES OF THE TRUSTEE AND HOLDERS ON EVENT OF DEFAULT | B-28 | |||||
Section 8.1 | Event of Default Defined; Waiver of Default | B-28 | ||||
Section 8.2 | Collection by the Trustee; the Trustee May Prove Payment Obligations | B-28 | ||||
Section 8.3 | Application of Proceeds | B-30 | ||||
Section 8.4 | Suits for Enforcement | B-30 | ||||
Section 8.5 | Restoration of Rights on Abandonment of Proceedings | B-30 | ||||
Section 8.6 | Limitations on Suits by Holders | B-30 | ||||
Section 8.7 | Unconditional Right of Holders to Institute Certain Suits | B-30 | ||||
Section 8.8 | Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default | B-31 | ||||
Section 8.9 | Control by Holders | B-31 | ||||
Section 8.10 | Waiver of Past Defaults | B-31 | ||||
Section 8.11 | The Trustee to Give Notice of Default, But May Withhold in Certain Circumstances | B-31 | ||||
Section 8.12 | Right of Court to Require Filing of Undertaking to Pay Costs | B-32 | ||||
ARTICLE 9 CONSOLIDATION, MERGER, SALE OR CONVEYANCE | B-32 | |||||
Section 9.1 | Company May Consolidate, etc., on Certain Terms | B-32 | ||||
Section 9.2 | Successor Person Substituted | B-32 |
B-ii
Table of Contents
Section 9.3 | Opinion of Counsel to the Trustee | B-32 | ||||
Section 9.4 | Successors | B-33 | ||||
ARTICLE 10 SUBORDINATION | B-33 | |||||
Section 10.1 | Agreement to Subordinate | B-33 | ||||
Section 10.2 | Liquidation; Dissolution; Bankruptcy | B-33 | ||||
Section 10.3 | Default on Senior Obligations | B-33 | ||||
Section 10.4 | When Distribution Must Be Paid Over | B-34 | ||||
Section 10.5 | Notice by Company | B-34 | ||||
Section 10.6 | Subordination Effective Notwithstanding Deficiencies with Respect to Senior Obligations; Waiver of Right to Contest Senior Obligation; Reinstatement of Subordination Provisions | B-34 | ||||
Section 10.7 | Subrogation | B-35 | ||||
Section 10.8 | Relative Rights | B-35 | ||||
Section 10.9 | Subordination May Not Be Impaired by Company | B-35 | ||||
Section 10.10 | Distribution or Notice to Representative | B-35 | ||||
Section 10.11 | Rights of the Trustee | B-35 | ||||
Section 10.12 | Authorization to Effect Subordination | B-35 | ||||
Section 10.13 | Amendments | B-36 | ||||
ARTICLE 11 REDEMPTION OF SECURITIES | B-36 | |||||
Section 11.1 | Notice to Trustee | B-36 | ||||
Section 11.2 | Notice of Redemption | B-36 | ||||
Section 11.3 | Effect of Notice of Redemption | B-36 | ||||
Section 11.4 | Deposit of Redemption Price | B-36 | ||||
Section 11.5 | Optional Redemption by the Company | B-37 | ||||
Annex A — | Form of CVR Certificate. |
B-iii
Table of Contents
Trust Indenture Act Section | Agreement Section | |||
Section 310 | (a)(1) | 4.9 | ||
(a)(2) | 4.9 | |||
(a)(3) | Not Applicable | |||
(a)(4) | Not Applicable | |||
(a)(5) | 4.9 | |||
(b) | 4.8, 4.10 | |||
(c) | Not Applicable | |||
Section 311 | (a) | 4.13 | ||
(b) | 4.13 | |||
(c) | Not Applicable | |||
Section 312 | (a) | 5.1, 5.2(a) | ||
(b) | 5.2(b) | |||
(c) | 5.2(c) | |||
Section 313 | (a) | 5.3(a) | ||
(b) | 5.3(a) | |||
(c) | 5.3(a), 8.11 | |||
(d) | 5.3(b) | |||
Section 314 | (a) | 5.4, 7.12 | ||
(b) | Not Applicable | |||
(c)(1) | 1.2(a) | |||
(c)(2) | 1.2(a) | |||
(c)(3) | Not Applicable | |||
(d) | Not Applicable | |||
(e) | 1.2(b) | |||
(f) | Not Applicable | |||
Section 315 | (a) | 4.1(a), 4.1(b) | ||
(b) | 8.11 | |||
(c) | 4.1(a) | |||
(d) | 4.1(c) | |||
(d)(1) | 4.1(a), 4.1(b) | |||
(d)(2) | 4.1(c)(ii) | |||
(d)(3) | 4.1(c)(iii) | |||
(e) | 8.12 | |||
Section 316 | (a)(last sentence) | Not Applicable | ||
(a)(1)(A) | 8.9 | |||
(a)(1)(B) | 8.10 | |||
(a)(2) | Not Applicable | |||
(b) | 8.7 | |||
(c) | Not Applicable | |||
Section 317 | (a)(1) | 8.2 | ||
(a)(2) | 8.2 | |||
(b) | 7.3 | |||
Section 318 | (a) | 1.7 |
B-iv
Table of Contents
B-1
Table of Contents
B-2
Table of Contents
B-3
Table of Contents
B-4
Table of Contents
B-5
Table of Contents
B-6
Table of Contents
B-7
Table of Contents
12S,12aR,12bS)-12b-(acetyloxy)-12-(benzoyloxy)-2a,3,4,4a,5,6,9,10,11,12,12a,12b-dodecahydro-4,6,11-trihydroxy-4a,8,13,13-tetramethyl-5-oxo-7,11-methano-1H-cyclodecal[3,4]benz[1,2 -b]oxet-9-yl ester (with the structure below) bound to albumin (identified by the Company as “nab-novel taxane (ABI-013)”) provided that in all cases the Product is an injectable formulation.
11,12,12a,12bdodecahydro- 4,11-dihydroxy-4a,8,13,13-tetramethyl-5-oxo-7,11-methano-1H-cyclodeca[3,4]
benz[1,2-b]-oxet-9-yl ester,[2aR-[2aα,4ß,4aß,6ß,
9α(αR*,ßS*),11α,12α,12aα, 12bα]] bound to albumin that is the subject of the Investigational New Drug Application No. 63,082 filed with the FDA together with all amendments (identified by the Company as “COROXANE”); provided that in all cases the Product is an injectable formulation.
B-8
Table of Contents
B-9
Table of Contents
B-10
Table of Contents
B-11
Table of Contents
B-12
Table of Contents
B-13
Table of Contents
B-14
Table of Contents
B-15
Table of Contents
B-16
Table of Contents
B-17
Table of Contents
B-18
Table of Contents
B-19
Table of Contents
B-20
Table of Contents
B-21
Table of Contents
B-22
Table of Contents
B-23
Table of Contents
B-24
Table of Contents
B-25
Table of Contents
B-26
Table of Contents
B-27
Table of Contents
B-28
Table of Contents
B-29
Table of Contents
B-30
Table of Contents
B-31
Table of Contents
B-32
Table of Contents
B-33
Table of Contents
B-34
Table of Contents
B-35
Table of Contents
B-36
Table of Contents
B-37
Table of Contents
By: |
Title: |
By: |
Title: |
B-38
Table of Contents
No. | Certificate for | Contingent Value Rights |
Dated: | [ • ] | |
By: | ||
Name: | ||
Title: | ||
Attest: | ||
Authorized Signature | �� |
B-39
Table of Contents
B-40
Table of Contents
B-41
Table of Contents
B-42
Table of Contents
as the Trustee
Dated: | By Authorized Signatory |
B-43
Table of Contents
C-1
Table of Contents
C-2
Table of Contents
C-3
Table of Contents
C-4
Table of Contents
C-5
Table of Contents
C-6
Table of Contents
86 Morris Avenue
Summit, New Jersey 07901
Tel: 908.673.9000
Fax: 908.673.2769
Attention: | George Golumbeski, Senior Vice President Business Development ggolumbeski@celgene.com |
86 Morris Avenue
Summit, New Jersey 07901
Tel: 908.673.9000
Fax: 908.673.2771
Attention: | Thomas Perone, Corporate Counsel tperone@celgene.com |
3161 Michelson Drive
Suite 800
Irvine, CA 92612
Tel: 949.851.3939
Fax: 949.553.7539
Attention: | Jonn R. Beeson, Esq. jbeeson@jonesday.com Kevin Espinola, Esq. kbespinola@jonesday.com |
11755 Wilshire Blvd., 20th Floor
Los Angeles, CA 90025
Tel: 310.883.1300
Fax: 310.998.8553
Attention: | Dr. Patrick Soon-Shiong, Executive Chairman pss@abraxisbio.com |
11755 Wilshire Blvd., 20th Floor
Los Angeles, CA 90025
Tel: 310.883.1300
Fax: 310.998.8553
Attention: | Charles Kim, General Counsel CKim@abraxisbio.com |
C-7
Table of Contents
One New York Plaza
New York, New York 10004
Tel: 212.859.8000
Fax: 212.859.4000
Attention: | Philip Richter, Esq. philip.richter@friedfrank.com Brian Mangino, Esq. brian.mangino@friedfrank.com |
C-8
Table of Contents
C-9
Table of Contents
By: | /s/ Robert J. Hugin Name: Robert J. Hugin Title: Chief Executive Officer |
By: | /s/ Sandesh Mahatme |
Title: | Secretary and Treasurer |
By: | /s/ Steven H. Hassan |
Title: | Manager |
By: | /s/ Patrick Soon-Shiong |
Title: | Trustee |
C-10
Table of Contents
By: | /s/ Patrick Soon-Shiong |
Title: | Trustee |
By: | /s/ Michele B. Chan Soon-Shiong |
Title: | Trustee |
By: | /s/ Michele B. Chan Soon-Shiong |
Title: | Trustee |
REVOCABLE TRUST
By: | /s/ Patrick Soon-Shiong |
Title: | Trustee |
By: | /s/ Michele B. Chan Soon-Shiong |
Title: | Trustee |
C-11
Table of Contents
By: | /s/ C. Kenworthy |
Title: | SVP |
C-12
Table of Contents
By: | /s/ Patrick Soon-Shiong |
Title: | Trustee |
By: | /s/ Michele B. Chan Soon-Shiong |
Title: | Trustee |
By: | /s/ Steven H. Hassan |
Title: | Trustee |
C-13
Table of Contents
Stockholder | Owned Shares | Company Options | Company RSUs | |||||||||
Dr. Patrick Soon-Shiong | 183,635 | (1) | 206,204 | |||||||||
Dr. Soon-Shiong may be deemed the beneficial owner | ||||||||||||
California Capital LP | 7,987,159 | |||||||||||
Patrick Soon-Shiong 2009 GRAT 1 | 5,759,109 | |||||||||||
Patrick Soon-Shiong 2009 GRAT 2 | 5,759,109 | |||||||||||
Michele B. Soon-Shiong GRAT 1 | 5,759,109 | |||||||||||
Michele B. Soon-Shiong GRAT 2 | 5,759,110 | |||||||||||
Soon-Shiong Community Property Revocable Trust | 716,916 | |||||||||||
California Capital Trust | 144,555 | |||||||||||
The Chan Soon-Shiong Family Foundation | 1,301,000 | |||||||||||
Total: | 33,186,067 | 183,635 | 206,204 | |||||||||
(1) | Includes 29,545 vested and 154,090 unvested Company Options as of the date hereof. |
C-14
Table of Contents
CONFIDENTIALITY AGREEMENT
D-1
Table of Contents
D-2
Table of Contents
D-3
Table of Contents
D-4
Table of Contents
Attention: | Philip Richter philip.Richter@friedfrank.com Brian Mangino brian.mangino@friedfrank.com |
Attention: | George Golumbeski, Senior Vice |
Attention: | Thomas Perone, Corporate Counsel |
D-5
Table of Contents
Attention: | Jonn R. Beeson, Esq. |
D-6
Table of Contents
D-7
Table of Contents
By: | /s/ Robert J. Hugin |
Title: | Chief Executive Officer |
D-8
Table of Contents
E-1
Table of Contents
E-2
Table of Contents
E-3
Table of Contents
F-1
Table of Contents
F-2
Table of Contents
F-3
Table of Contents
G-1
Table of Contents
G-2
Table of Contents
By | /s/ Stephen Sands |
G-3
Table of Contents
H-1
Table of Contents
H-2
Table of Contents
H-3
Table of Contents
H-4