UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
Solicitation/Recommendation Statement
Under Section 14(d)(4) of the Securities Exchange Act of 1934
AVANIR PHARMACEUTICALS, INC.
(Name of Subject Company)
AVANIR PHARMACEUTICALS, INC.
(Name of Person Filing Statement)
Common Stock, par value $0.0001 per share
(Title of Class of Securities)
05348P401
(CUSIP Number of Class of Securities)
Keith Katkin
President and Chief Executive Officer
Avanir Pharmaceuticals, Inc.
30 Enterprise, Suite 400,
Aliso Viejo, California 92656
(949) 389-6700
(Name, address and telephone number of person authorized to receive
notices and communications on behalf of the persons filing statement)
With copies to:
Charles K. Ruck
R. Scott Shean
David M. Wheeler
Latham & Watkins LLP
650 Town Center Drive, 20th Floor
Costa Mesa, CA 92626
(714) 540-1235
| x | Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. |
 The New Global CNS Company December 2014 |
 2 Creation of a Global Leader in CNS |
 3 Strategic Rationale Increased resources to continue our vision of developing into a leading CNS specialty pharmaceutical company Remain an independent operating company - Avanir Pharmaceuticals - with the benefit of tapping into the resources of a large pharmaceutical company (Johnson and Johnson operating model) Confidential and Proprietary |
 4 Why Otsuka? Maximize Share Value Cultural Alignment Philosophical Alignment Business Alignment Confidential and Proprietary |
 Otsuka Desires to Build Capabilities 5 Otsuka’s people have built world class capabilities to develop and commercialize innovative products for people with psychiatric conditions Avanir’s people have built world class capabilities to develop and commercialize innovative products for people with neurologic conditions With the added resources of Otsuka and the shared expertise of our people, we will be able to accelerate the development and commercialization of needed CNS drugs and unlock additional value in Avanir’s business |
 Achieving Greatness 6 |
 Otsuka Philosophy… 7 Creating our own unique and innovative products Improving health and well being Contributing to the lives of people worldwide These words embody our dedication to: |
 "Always striving to take the road less traveled For better health worldwide World-class or Not at All |
 Otsuka Overview 9 Parent: Otsuka Holdings, Co., Ltd. (Tokyo, Japan) Revenue/Net Income: $14.1 Billion / $1.5 Billion (FY2013) Core Business Segments: Pharmaceuticals & Nutraceuticals Capabilities: Discovery Research, Preclinical and Clinical Development, Manufacturing, Packaging, Distribution, and Global Commercialization (U.S., Europe, and Asia Pacific) Pharmaceutical Focus: CNS, Oncology, and Cardiovascular |
 Hi-Z Tower Otsuka Pharmaceutical Co., Ltd. Tokushima, Japan Otsuka Pharmaceutical Co., Ltd Established August 10,1964 President Taro Iwamoto Employees 5,733 Sales (FY13) US $7.5 Billion +21.9% Operating income US $2.0 Billion +48.1% Key U.S. Companies • Otsuka America Pharmaceuticals Inc • Otsuka Pharmaceutical Development & Commercialization, Inc. • Otsuka Maryland Medicinal Laboratories, Inc. • Astex Pharmaceuticals (as of March 31, 2014) Otsuka Pharmaceuticals |
 Flagship Products 11 |
 Otsuka CNS Pipeline Compound Class Indication (Formulation) Region Stage OPC-14597 (Abilify™) Aripiprazole Dopamine partial agonist Autism (Oral) JP Phase 3 Tourette disorder (Once-weekly tablet) US Filed OPC-14597 (Abilify Maintena™) Aripiprazole Depot injection Schizophrenia JP Filed Bipolar I disorder JP, US, & EU Phase 3 levetiracetam (Keppra™/E Keppra™) (UCB partnership) Anti-epileptic drug Epilepsy-generalized onset seizures (Oral) JP Phase 3 Epilepsy-partial onset seizures/mono therapy (Oral/injection) JP Filed OPC-34712 Brexpiprazole Serotonin- Dopamine Activity Modulator (SDAM) Adjunctive therapy for major depressive disorder(Oral) US EU Filed Phase 3 Schizophrenia (Oral) US JP, EU Filed Phase 3 Agitation associated with Alzheimer's disease (Oral) US, EU Phase 3 Post-traumatic stress disorder (Oral) US, EU Phase 3 Lu AE58054 (Lundbeck partnership) 5HT6 antagonist Alzheimer’s disease (Oral) US, EU, JP Phase3 AF 20513 -amyloid vaccine Alzheimer’s disease US, EU Phase 1 ASC-01 aripiprazole/sertraline Dopamine partial agonist/ SSRI Major depressive disorder(Oral) JP, Asia Phase3 |
 13 Implications for Avanir Business as usual goal is not to change how we operate as a company! – No expected changes in headcount or cash compensation targets The benefits of being a small biopharmaceutical company with increased resources and protection of a large company Development and commercialization organization for Otsuka products focused on neurology and elderly… more products to sell and more development programs to pursue – Sativex (Phase III data in 1H2015) – Multiple Alzheimer’s Disease programs and brexpiprazole Increased leverage when dealing with business issues Global approach to the business – US, Europe and Asia Confidential and Proprietary |
 14 Implications for the Commercial Team Business as usual with access to more resources – No expected changes in headcount or cash compensation targets 300+ psychiatry representatives contributing to the Nuedexta sales effort – More noise, more adoption, more patients being helped! Increased leverage with wholesalers, managed care organizations and other customers Commercialization arm for Otsuka products for neurology and elderly patients EU and ROW commercialization infrastructure Confidential and Proprietary |
 15 Implications for the R&D Team Business as usual with access to more resources – No expected changes in headcount or cash compensation targets – Continue development of all of our programs Development arm for Otsuka neurology product candidates Leverage Otsuka relationships and infrastructure as needed Leverage Otsuka expertise in Psychiatry drug development Global presence to pursue worldwide development programs Confidential and Proprietary |
 16 Financials $17 per share; $3.5Bn offer value – Represents ~20x 2015 revenues; ~13.5x 2016 revenues – Significant take-out premium built into the pre-announcement stock price Premiums – 58% to the 90 trading day average trading price – 47% / 32% premium to the 60 / 30 trading day average trading price, respectively – 55% premium over September financing – 14% to Friday (11/28) close; 13% to 52wk high closing price Confidential and Proprietary |
 17 Summary Great outcome for employees, patients and shareholders Business as usual goal is not to change how we operate! – No expected changes in headcount or cash compensation targets The benefits of being a small biopharmaceutical company with increased resources and protection of a large company Opportunity to meet and interact with Taro Iwamoto, Ph.D. the President of Otsuka this afternoon Send questions to Jesus Varela via e-mail for this afternoon Confidential and Proprietary |
 Impact on Our Customers, Researchers and Patients |
 19 Impact on Customers Great outcome for customers More resources to develop the PBA market by raising awareness thereby increasing the number of patients to be helped Increased investment in the business Worldwide presence Increased investment in Avanir pipeline focused on bringing innovative therapies to market for diseases with high unmet needs Confidential and Proprietary |
 20 Impact on Researchers Great outcome for researchers More resources to develop current and future Avanir products Increased investment in Avanir pipeline focused on bringing innovative therapies to market for diseases with high unmet needs Increased investment in the business Worldwide presence Confidential and Proprietary |
 21 Impact on Patients Great outcome for patients More resources to develop the PBA market by raising awareness thereby increasing the number of patients to be helped Increased investment in Avanir pipeline focused on bringing innovative therapies to market for diseases with high unmet needs Worldwide presence Confidential and Proprietary |
 Forward-Looking Statements The statements included in this communication that are not a description of historical facts are forward-looking statements. Words or phrases such as “believe,” “may,” “could,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “seek,” “plan,” “expect,” “should,” “would” or similar expressions are intended to identify forward-looking statements. These forward-looking statements include without limitation statements regarding the benefits and planned completion of the transactions contemplated by the Agreement and Plan of Merger dated as of December 2, 2014 (the “Merger Agreement”) by and among Avanir Pharmaceuticals, Inc. (the “Company”), Otsuka Pharmaceutical Co., Ltd. (“Parent”) and Bigarade Corporation, a wholly-owned subsidiary of Parent (“Acquisition Sub”). Risks and uncertainties that could cause results to differ from expectations include: uncertainties as to the timing of the tender offer and the merger; uncertainties as to the percentage of Company stockholders tendering their shares in the tender offer; the possibility that competing offers will be made; the possibility that various closing conditions for the tender offer or the merger may not be satisfied or waived, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the merger; the effects of disruption caused by the transaction making it more difficult to maintain relationships with employees, collaborators, vendors and other business partners; the risk that stockholder litigation in connection with the tender offer or the merger may result in significant costs of defense, indemnification and liability; and risks and uncertainties pertaining to the business of the Company, including the risks and uncertainties detailed in the Company’s public periodic filings with the United States Securities and Exchange Commission (the “SEC), as well as the tender offer materials to be filed by Parent and Acquisition Sub and the Solicitation/Recommendation Statement to be filed by the Company in connection with the tender offer. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement and the Company undertakes no obligation to revise or update this report to reflect events or circumstances after the date hereof, except as required by law. This caution is made under the safe harbor provisions of Section 21E of the Private Securities Litigation Reform Act of 1995. Additional Information The tender offer described above has not yet commenced. This communication is not an offer to buy nor a solicitation of an offer to sell any securities of the Company. The solicitation and the offer to buy shares of the Company’s common stock will only be made pursuant to a tender offer statement on Schedule TO, including an offer to purchase, a letter of transmittal and other related materials that Parent and Acquisition Sub intend to file with the SEC. In addition, the Company will file with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9 with respect to the tender offer. Once filed, investors will be able to obtain the tender offer statement on Schedule TO, the offer to purchase, the Solicitation/Recommendation Statement of the Company on Schedule 14D-9 and related materials with respect to the tender offer and the merger, free of charge at the website of the SEC at www.sec.gov, and from the information agent named in the tender offer materials. Investors may also obtain, at no charge, any such documents filed with or furnished to the SEC by the Company under the “Investors” section of the Company’s website at www.avanir.com. INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THESE DOCUMENTS WHEN THEY BECOME AVAILABLE, INCLUDING THE SOLICITATION/RECOMMENDATION STATEMENT OF THE COMPANY AND ANY AMENDMENTS THERETO, AS WELL AS ANY OTHER DOCUMENTS RELATING TO THE TENDER OFFER AND THE MERGER THAT ARE FILED WITH THE SEC, CAREFULLY AND IN THEIR ENTIRETY PRIOR TO MAKING ANY DECISIONS WITH RESPECT TO WHETHER TO TENDER THEIR SHARES INTO THE TENDER OFFER BECAUSE THEY CONTAIN IMPORTANT INFORMATION, INCLUDING THE TERMS AND CONDITIONS OF THE TENDER OFFER. 22 |