Filed by CIMA LABS INC.
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
under the Securities Exchange Act of 1934
Subject Company: aaiPharma Inc.
Commission File No. 0-21185
This filing relates to the merger transaction between CIMA LABS INC., a Delaware
corporation ("Cima"), aaiPharma Inc., a Delaware corporation ("aaiPharma"),
Scarlet Holding Corporation, a Delaware corporation ("Holding Company"), Scarlet
MergerCo, Inc., a Delaware corporation and a direct, wholly owned subsidiary of
Holding Company ("S MergerCo"), and Crimson MergerCo, Inc., a Delaware
corporation and a direct, wholly owned subsidiary of Holding Company ("C
MergerCo"), pursuant to an Agreement and Plan of Merger, dated as of August 5,
2003 (the "Merger Agreement"). The Merger Agreement is on file with the
Securities and Exchange Commission as an exhibit to the Current Report on Form
8-K, as amended, filed by Cima on August 6, 2003.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
In connection with a proposed business combination transaction, Scarlet
Holding Corporation, the holding company in the proposed transaction, intends to
file with the Securities and Exchange Commission (the "SEC") a registration
statement on Form S-4 that will include a joint proxy statement/prospectus and
other relevant documents in connection with the proposed transaction. Investors
of aaiPharma and Cima are urged to read the joint proxy statement/prospectus and
other relevant materials when they become available because they will contain
important information about Cima, aaiPharma and the proposed transaction.
Investors may obtain a free copy of these materials (when they are available)
and other documents filed with the Securities and Exchange Commission at the
SEC's website at www.sec.gov. A free copy of the joint proxy
statement/prospectus when it becomes available may also be obtained from
aaiPharma Inc., 2320 Scientific Park Drive, Wilmington, North Carolina 28405 or
CIMA LABS INC., 10000 Valley View Road, Eden Prairie, Minnesota 55344. In
addition, investors may access copies of the documents filed with the SEC by
aaiPharma on aaiPharma's website at www.aaiPharma.com and may access copies of
the documents filed with the SEC by Cima on Cima's website at www.cimalabs.com.
aaiPharma, Cima and their respective directors, executive officers and
certain other members of management and employees may be soliciting proxies from
their respective stockholders in favor of the proposed merger. Information
regarding the persons who may, under the rules of the SEC, be considered to be
participants in the solicitation of aaiPharma's stockholders in connection with
the proposed merger is set forth in aaiPharma's proxy statement for its 2003
annual meeting, dated April 8, 2003 and filed with the SEC on April 11, 2003,
and
information regarding the persons who may, under the rules of the SEC, be
considered to be participants in the solicitation of Cima's stockholders in
connection with the proposed transaction is set forth in Cima's proxy statement
for its 2003 annual meeting, dated April 14, 2003 and filed with the SEC on
April 11, 2003.
Additional information regarding these individuals and any interest they
have in the proposed transaction will be set forth in the joint proxy
statement/prospectus when it is filed with the SEC.
FORWARD-LOOKING STATEMENTS
The materials attached below may contain forward-looking statements within
the meaning of the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. These statements are based on the current expectations and
beliefs of the management of aaiPharma and Cima and are subject to a number of
factors and uncertainties that could cause actual results to differ materially
from those described in the forward-looking statements. The forward-looking
statements contained in this press release include statements about future
financial and operating results and the proposed merger of aaiPharma and Cima.
These statements are not guarantees of future performance, involve certain
risks, uncertainties and assumptions that are difficult to predict, and are
based upon assumptions as to future events that may not prove accurate.
Therefore, actual outcomes and results may differ materially from what is
expressed herein.
Risks and uncertainties pertaining to the following factors, among others,
could cause actual results to differ materially from those described in the
forward-looking statements: the ability of aaiPharma and Cima to obtain the
stockholder and regulatory approvals required for the merger; the new company's
ability to successfully integrate the businesses of the two companies;
unexpected costs involved in the merger or to the new company's ability to
achieve cost-cutting synergies; the impact of uncertainty surrounding the merger
on the businesses of the two companies; the impact of competition, new data,
supply issues or marketplace trends on the market for the companies' products;
deterioration in the business of aaiPharma or Cima prior to closing; technical,
regulatory or manufacturing issues; new data or intellectual property disputes
that may affect the companies' programs; the ability of the new company to
develop and market products in a timely manner; and difficulties in gaining
approval of new products. Additional economic, business, competitive and/or
regulatory factors affecting aaiPharma's and Cima's businesses generally that
may cause actual results to differ materially are discussed in their respective
filings with the SEC, including their Annual Reports on Form 10-K for the fiscal
year ended December 31, 2002, especially in the Management's Discussion and
Analysis section, their most recent Quarterly Reports on Form 10-Q and their
Current Reports on Form 8-K. aaiPharma and Cima do not undertake any obligation
to (and expressly disclaim any such obligation to) update or alter their
forward-looking statements, whether as a result of new information, future
events or otherwise.
Attached below are three presentations for employees posted on a joint
Cima/aaiPharma website related to the merger.
EMPLOYEE-ONLY WEB SITE PRESENTATION OF AAIPHARMA FACILITIES
-----------------------------------------------------------
# # # # # # # # # # # # # # # # # # #
Within the SCIENCE lies the MEDICINE that will
CHANGE a life.(TM)
[Photo of aaiPharma headquarters sign]
aaiPharma Headquarters (HQ)
Wilmington, North Carolina
[Photo of aaiPharma headquarters building exterior]
Physical Chemistry at HQ
[Photo of aaiPharma scientist]
Micro and Analytical Labs
Hall Street Facilities -- Wilmington, N.C.
[Photo of Hall Street Facilities exterior]
Inside Hall Street
[Photo of Manufacturing worker]
Solid Dosage Manufacturing Facility
Wilmington, N.C.
[Photo of Solid Dosage Manufacturing Facility exterior]
Inside Manufacturing
[Photo of Manufacturing worker]
Biotech Lab -- Wilmington, N.C.
[Photo of Biotech Lab building exterior]
Inside the Biotech Lab
[Photo of aaiPharma scientists]
Stability Chambers/Operations
Wilmington, N.C.
[Photo of Stability Chambers/Operations Facility exterior]
Inside Stability
[Photo of Interior of Stability Chambers Facility]
aaiPharma's Child Care:
The Learning Center -- Wilmington, N.C.
[Photo of The Learning Center building exterior]
Phase I Clinic and Labs
Research Triangle Park, NC
[Photo of Phase I Clinic and Labs building exterior]
Clinical Trials Headquarters
Natick, MA
[Photo of Clinical Trials Headquarters building exterior]
Sterile Manufacturing Facility
Charleston, SC
[Photo of Sterile Manufacturing building exterior]
Inside Sterile Manufacturing
Charleston, SC
[Photo of Sterile Manufacturing Facility interior and aaiPharma scientists]
N. Brunswick, NJ
[Photo of Facility exterior]
Inside New Jersey Lab
[Photo of Scientists and lab interior]
Inside New Jersey Lab
[Photo of Scientists and lab interior]
Development Labs
Kansas City, KS
[Photo of Development Labs building exterior]
Inside Kansas City
[Photo of Laboratory equipment]
European Headquarters
Neu-Ulm, Germany
[Photo of European Headquarters building exterior]
Inside the Phase I Clinical
Neu-Ulm, Germany
[Photo of Laboratory interior]
Inside the Lab in Neu-Ulm, Germany
[Photo of Laboratory interior]
Within the SCIENCE lies the MEDICINE that will
CHANGE a life
[Photo of aaiPharma Headquarters sign]
EMPLOYEE-ONLY WEB SITE PRESENTATION
-----------------------------------
OF MERGER OVERVIEW
------------------
# # # # # # # # # # # # # # # # # # #
AAIPHARMA AND CIMA ANNOUNCE
MERGER TO CREATE A LEADING
SCIENCE-BASED, SPECIALTY
PHARMACEUTICAL COMPANY
- -------------------------------------------------------------------------------
AUGUST 5, 2003
FORWARD LOOKING STATEMENTS [GRAPHIC]
This presentation contains forward-looking statements within the meaning of the
"safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. These statements are based on the current expectations and beliefs of the
management of aaiPharma and Cima and are subject to a number of factors and
uncertainties that could cause actual results to differ materially from those
described in the forward-looking statements. The forward-looking statements
contained in this presentation include statements about future financial and
operating results and the proposed merger of aaiPharma and CIMA. These
statements are not guarantees of future performance, involve certain risks,
uncertainties and assumptions that are difficult to predict, and are based upon
assumptions as to future events that may not prove accurate. Therefore, actual
outcomes and results may differ materially from what is expressed herein.
In any forward-looking statement in which aaiPharma or CIMA expresses an
expectation or belief as to future results, that expectation or belief is
expressed in good faith and believed to have a reasonable basis, but there can
be no assurance that the statement or expectation or belief will result or be
achieved or accomplished. Risks and uncertainties pertaining to the following
factors, among others, could cause actual results to differ materially from
those described in the forward-looking statements: the ability of aaiPharma and
CIMA to obtain the stockholder and regulatory approvals required for the
merger; the new company's ability to successfully integrate the businesses of
the two companies; unexpected costs involved in the merger or to the new
company's ability to achieve cost-cutting synergies; the impact of uncertainty
surrounding the merger on the businesses of the two companies; the impact of
competition, new data, supply issues or marketplace trends on the market for
the companies' products; a deterioration in the business of aaiPharma and Cima
prior to closing; technical, regulatory or manufacturing issues, new data or
intellectual property disputes that may affect the companies' programs; the
ability of the new company to develop and market products in a timely manner;
and difficulties in gaining approval of new products. Additional economic,
business, competitive and/or regulatory factors affecting aaiPharma's and
CIMA's businesses generally that may cause actual results to differ materially
are discussed in their respective filings with the SEC, including their Annual
Reports on Form 10-K for the fiscal year ended December 31, 2002, especially in
the Management's Discussion and Analysis section, their most recent Quarterly
Reports on Form 10-Q and their Current Reports on Form 8-K. aaiPharma and CIMA
do not undertake obligation to (and expressly disclaim any such obligation to)
update or alter their forward-looking statements, whether as a result of new
information, future events or otherwise.
[AAIPHARMA LOGO] 2 [CIMA LOGO]
TODAY, WE ANNOUNCED A MERGER THAT ALLOWS
STRATEGIC ACCELERATION AND VALUE CREATION
- --------------------------------------------------------------------------------
aaiPharma CIMA
Creating a dynamic science-based, specialty pharmaceutical company based on:
[ ] Established, diversified and growing base of proprietary brands
[ ] Substantial R&D platform, sales force and manufacturing capabilities
[ ] Market-leading drug delivery technologies that create differentiated
products
[ ] Strong and flexible financial position
3
(AAIPHARMA LOGO) (CIMA LOGO)
COMPLEMENTARY STRENGTHS
- --------------------------------------------------------------------------------
aaiPharma CIMA
Robust Product Market-Leading
Pipeline ODT Technologies
Successful Base Established Core
of Acquired and of Partnered
Improved Brands Products
and Technologies
Strong R&D Knowledge, Proprietary Product
Growing Sales and Pipeline and
Marketing Capabilities Manufacturing Capabilities
Intelligence on Unlevered
Product Acquisition Capital Structure
Opportunities
4
(AAIPHARMA LOGO) (CIMA LOGO)
DYNAMIC VALUE CREATION [GRAPHIC]
MERGER BENEFITS
- - Ability to apply CIMA orally disintegrating tablet (ODT) drug delivery
technologies to aaiPharma products
- - Multiple platforms create broad services offering and formulations
powerhouse
- - Better exploit enabling technologies and diversify revenues
- - Preeminent capability in drug delivery technology
- - Expedites commercialization of proprietary products
- - Enhanced R&D capabilities
- - Expanded manufacturing capacity
- - Strong cash flow and balance sheet
[AAIPHARMA LOGO] 5 [CIMA LOGO]
BUT FIRST, A LITTLE BIT MORE
ABOUT CIMA
6
WHO IS CIMA? [GRAPHIC]
- - Profitable specialty pharmaceutical company that develops and
manufactures branded prescription and OTC products for partners based
on proprietary orally disintegrating tablet (ODT) technologies
[AAIPHARMA LOGO] 7 [CIMA LOGO]
WHY ODT TECHNOLOGIES? [GRAPHIC]
- - Benefits for pharmaceutical companies
- Life cycle solution for branded Rx products
- Product line extension and differentiation
- Branded generics for specialty companies
- - Benefits for patients
- Easier to take medicine
- Perceived faster acting
- Patient-preferred
[AAIPHARMA LOGO] 8 [CIMA LOGO]
CIMA'S STRATEGY [GRAPHIC]
- - PARTNER-FUNDED COLLABORATIONS
- Developing/manufacturing products for pharmaceutical company
partners
- Collaborations have driven CIMA to current stage of
development: 3 branded prescription and 3 OTC brands
- 12 signed partner-funded collaborations
- - PROPRIETARY PRODUCTS
- Initiative aimed at retaining greater economic value of
products CIMA develops
- Currently developing 5 proprietary products
[AAIPHARMA LOGO] 9 [CIMA LOGO]
PARTNER PRODUCT COLLABORATIONS [GRAPHIC]
- - Astra Zeneca: Zomig-ZMT
- - Bristol-Myers Squibb: Tempra FirsTabs
- - Novartis: Triaminic Softchews
- - Organon: Remeron SolTab
- - Schwarz Pharma: NuLev
- - Wyeth: Alavert
[6 PICTUERS]
[AAIPHARMA LOGO] 10 [CIMA LOGO]
PROPRIETARY PRODUCTS [GRAPHIC]
MUCH LIKE WE FOUND, CIMA HOPES TO ACHIEVE GREATER PROPORTION OF ECONOMIC VALUE
OF THE COMPOUND BY:
- - SELECTING, FUNDING, DEVELOPING PRODUCTS AND SECURING FDA APPROVALS
- - BUILDING CLINICAL AND REGULATORY EXPERTISE
- - MAJOR PROJECT IS PAIN PRODUCT, ORAVESCENT FENTANYL
[AAIPHARMA LOGO] 11 [CIMA LOGO]
ORAVESCENT(R) FENTANYL [GRAPHIC]
- - THERAPY FOR BREAKTHROUGH CANCER PAIN
- - FASTER AND GREATER ABSORPTION THAN LEADING TRANSMUCOSAL TREATMENT
- - PHASE III TRIALS SCHEDULED FOR Q3 2003
- - FDA FILING PLANNED Q4 2004
- - GREAT FIT WITH AAIPHARMA'S FOCUS IN PAIN MANAGEMENT
[AAIPHARMA LOGO] 12 [CIMA LOGO]
CURRENT GMP MANUFACTURING [GRAPHIC]
- - Modern 75,000 square foot facility
[PHOTO]
[PHOTO]
- - In-house production and packaging capabilities
- - Two production lines
- - Annual manufacturing capacity exceeds 500 million tablets
- - Second manufacturing site with bottling capabilities in 2003
[AAIPHARMA LOGO] 13 [CIMA LOGO]
CIMA SUMMARY [GRAPHIC]
WORLDWIDE LEADER IN SPECIALTY PHARMACEUTICALS
- - PROPRIETARY ODT TECHNOLOGIES
- - SIX SUCCESSFUL COMMERCIAL ODT PRODUCTS
- - PROVEN COMMERCIAL MANUFACTURER
- - ROBUST PIPELINE OF PARTNERED AND PROPRIETARY PRODUCTS
- - HISTORY OF CONSISTENT REVENUE AND EARNINGS GROWTH
- $47 million in 2002 operating revenues
- 57% compound annual revenue growth past five years
[AAIPHARMA LOGO] 14 [CIMA LOGO]
AAIPHARMA AND CIMA ANNOUNCE
MERGER TO CREATE A LEADING
SCIENCE-BASED, SPECIALTY
PHARMACEUTICAL COMPANY
- -------------------------------------------------------------------------------
AUGUST 5, 2003
15
STRATEGIC ACCELERATION
- --------------------------------------------------------------------------------
<Table>
<Caption>
Increases Growth Broadens R&D Capacity Enhances Corporate Strategic Drives Near
Opportunities & Profile Synergies & Long-Term
Manufacturing Operations Financial Returns
</Table>
16
(AAIPHARMA LOGO) (CIMA LOGO)
INCREASES GROWTH OPPORTUNITIES [GRAPHIC]
- - Application of CIMA ODT technology to aaiPharma products
- - Capture full value of CIMA proprietary product pipeline and accelerate
aaiPharma pipeline
- - Acceleration of new product development through larger R&D budget
- - Enables additional brand acquisitions
- - Broader exposure of CIMA technologies through Development Services
sales force
[AAIPHARMA LOGO] 17 [CIMA LOGO]
BROADENS R&D AND MANUFACTURING CAPABILITIES [GRAPHIC]
- - Expansion of scientific and technical bases
- Advances pipeline of proprietary products
- Dedicated science-base of 1000+ scientists and
researchers built on strong drug development
capabilities
- Over 175,000 square feet of R&D facilities
- Increases investment in R&D
- Positioned to develop additional proprietary
products
- Expected 2004 R&D budget in excess of $30 million
[AAIPHARMA LOGO] 18 [CIMA LOGO]
BROADENS R&D AND MANUFACTURING CAPABILITIES [GRAPHIC]
- - ODT PRODUCTS ON THE MARKET
TECHNOLOGIES PATENT EXCLUSIVITY PRIMARY FUNCITON PARTNER PRODUCTS
- - OraSolv(R) 2010 Taste-masking, broader range [Remeron SolTab (R) Logo]
of activities and dosage levels
- - DuraSolv(TM) 2018 More compactable formulation, [Alavert (R) Logo]
more flexible, less expensive [NuLev (R) Logo]
packaging
- - PakSolv(TM) 2017 Blister packaging process and [Zomig (R) Logo]
materials
[AAIPHARMA LOGO] 19 [CIMA LOGO]
BROADENS R&D AND MANUFACTURING CAPABILITIES [GRAPHIC]
TECHNOLOGIES PATENT EXCLUSIVITY PRIMARY FUNCITON
- - ProSorb(R) 2019 - Very rapid delivery of drugs orally - e.g., 18 minutes
- - ProSlo(TM) 2018 - Delivers single or combination drug predictably over a
long period, having an immediate and extended release
component
- - ProCore(TM) 2007 - Slowly releases drugs over an extended period -
e.g., 24 hours
- - ProSpher(TM) 2018 - A single injection releases drugs for up to six months
- - ProLonic(TM) 2016 - An oral dose that delivers drugs at specific times in
the colon
- - ProMelt(TM) 2019 - A tablet that dissolves and disintegrates in your mouth in
seconds but allows the release to be up to 24 hours
- - OraVescent(R) 2019 - Oral transmucosal delivery system
[AAIPHARMA LOGO] 20 [CIMA LOGO]
BROADENS R&D AND MANUFACTURING CAPABILITIES [GRAPHIC]
- - Technologies for Potentially Creating Branded Proprietary Drugs
DARVON(R)/DARVOCET(TM) --> ORASOLV(R)
METHADONE --> ORASOLV(R)
FENTANYL --> ORAVESCENT(R)
OMEPTRAZOLE --> ORASOLV(R)
[AAIPHARMA LOGO] 21 [CIMA LOGO]
BROADENS R&D AND MANUFACTURING CAPABILITIES [GRAPHIC]
- - Expands manufacturing capabilities and capacity
- Oral and injectable dose production facilities
- 1 billion blister tablet capacity in 2004
- 950 million bottle tablet capacity by 2004
- 75,000 liters of sterile product annually
- - Over 190,000 square feet of sterile and non-sterile production
facilities
- Eden Prairie, MN
- Brooklyn Park, MN
- Wilmington, NC
- Charleston, SC
[AAIPHARMA LOGO] 22 [CIMA LOGO]
ENHANCES CORPORATE PROFILE [GRAPHIC]
- - Increases market capitalization
- - Improves share liquidity
- - Expands shareholder base
- - Provides financial flexibility
- - Diversifies revenue stream
- - Leverages experienced management team and highly skilled workforce
- Employees (approx.): 1,500
- R&D: 1,000
- Sales & Marketing: 200 (pharmaceutical and
development)
[AAIPHARMA LOGO] 23 [CIMA LOGO]
STRATEGIC SYNERGIES [GRAPHIC]
- - Estimated Annual Synergies:
- 2004 Between $8 million and $10 million
- 2005 Between $18 million to $20 million, increasing
thereafter
- - Economies of scale in manufacturing from increased capacity
utilization
- - Greater leverage of both companies' R&D expertise and infrastructure
- - Elimination of public company costs and rationalization of general &
administrative operations
- - Sales of CIMA technologies through aaiPharma's existing sales force
- - In-sourcing from CIMA partners using our R&D capabilities
[AAIPHARMA LOGO] 24 [CIMA LOGO]
DRIVES NEAR & LONG-TERM FINANCIAL RETURNS [GRAPHIC]
- - Establishing 2004 Holding Company revenue guidance of $405 to $415
million
- 2003-2006 CAGR Revenue Growth of 18% to 20%
- - Establishing 2004 Holding Company EPS guidance $1.25 to $1.30
- 2003-2006 CAGR EPS Growth of 25% to 30%
[AAIPHARMA LOGO] 25 [CIMA LOGO]
MANAGEMENT TEAM WITH EXTENSIVE INDUSTRY EXPERIENCE [GRAPHIC]
OFFICER TITLE BACKGROUND
FREDERICK SANCILIO Chairman Founded aaiPharma in 1979.
aaiPharma: Chairman and Chief Scientific Officer
Prior Experience: Burroughs-Wellcome
STEVEN RATOFF Vice Chairman CIMA: Chairman of the Board, Interim Chief Executive Officer.
Prior Experience: MacroMed, Brown-Forman, BMS
PHILIP TABBINER CEO aaiPharma: President and CEO
Prior Experience: Bayer, DuPont Merck
WILLIAM GINNA CFO aaiPharma: Chief Financial Officer and Executive Vice President.
Prior Experience: London International Group, Athlone Industries
VIJAY AGGARWAL President, aaiPharma: President, aaiPharma Development Services
Development Services Prior Experience: Quest Diagnostics, SmithKline Beecham
JOHN HONTZ President, CIMA: Chief Operating Officer
CIMA Prior Experience: Glaxo Wellcome, Burroughs-Wellcome
DAVID HURLEY President, Pharmaceuticals aaiPharma: President, Pharmaceuticals
Prior Experience: Geneva Pharmaceuticals, Novartis, Baxter
GEORGE VAN LEAR President, R&D aaiPharma: President, R&D
Prior Experience: Senetek, Glaxo Wellcome
[AAIPHARMA LOGO] 26 [CIMA LOGO]
TRANSACTION SUMMARY [GRAPHIC]
- - Stock-for-stock exchange, tax-free transaction (subject to IRS
notification)
- - Holding company transaction structure
- At closing, all aaiPharma and CIMA shareholders will receive
shares in a newly formed public company
- 1.000 Holding Company shares for each aaiPharma share
- 1.3657 Holding Company shares for each CIMA share
- - Share ownership (fully diluted)
- aaiPharma 59.4%
- CIMA 40.6%
- - Approved and recommended by both aaiPharma and CIMA Boards
- - At closing, there will be 8 directors of the Holding Company; 4
current aaiPharma directors and 4 current CIMA directors. Prior to the
closing, aaiPharma will designate 3 of its directors who are
independent and CIMA will designate 2 of its directors who are
independent and these 5 independent directors shall select, after the
closing, between one and three additional directors to the board of
directors of Holding Company.
- - Next steps
- Hart-Scott-Rodino filings
- Special shareholder meetings for both companies--Q4 2003
- Closing anticipated in Q4 of 2003
[AAIPHARMA LOGO] 27 [CIMA LOGO]
COMPELLING MERGER OF
COMPLEMENTARY BUSINESSES [GRAPHIC]
Strategic and cultural fit
Diverse portfolio of brands, technologies and partnered products
Substantial R&D and manufacturing expertise
Strong and flexible financial position
Experienced management team
Compelling synergies expected
[AAIPHARMA LOGO] 28 [CIMA LOGO]
ADDITIONAL INFORMATION AND WHERE TO FIND IT [GRAPHIC]
- - Scarlet Holding Corporation, the holding company to be formed in this
transaction, intends to file with the Securities and Exchange
Commission a registration statement on Form S-4 that will include a
joint proxy statement/prospectus and other relevant documents in
connection with the proposed transaction. INVESTORS OF AAIPHARMA AND
CIMA ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER
RELEVANT MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT SCARLET HOLDING CORPORATION, CIMA,
AAIPHARMA AND THE PROPOSED TRANSACTION. Investors may obtain a free
copy of these materials (when they are available) and other documents
filed with the Securities and Exchange Commission at the SEC's website
at www.sec.gov. A free copy of the joint proxy statement/prospectus
when it becomes available may also be obtained from aaiPharma Inc.,
2320 Scientific Park Drive, Wilmington, North Carolina 28405 or CIMA,
10000 Valley View Road, Eden Prairie, Minnesota 55344. Investors may
access copies of the documents filed with the SEC by aaiPharma on
aaiPharma's website at www.aaiPharma.com and investors and may access
copies of the documents filed with the SEC by CIMA on CIMA's website at
www.cimalabs.com. In addition, copies may be obtained free of charge at
written request to aaiPharma at 2320 Scientific Park Drive, Wilmington,
North Carolina, attention: CFO or to CIMA at 10000 Valley View Road,
Eden Prairie, Minnesota 55344, attention: CFO.
- - aaiPharma, CIMA and their respective directors, executive officers and
certain other members of management and employees may be deemed to be
participants in soliciting proxies from their respective stockholders
in favor of the proposed merger. Information regarding the persons who
may, under the rules of the SEC, be considered to be participants in
the solicitation of aaiPharma's stockholders in connection with the
proposed merger is set forth in aaiPharma's proxy statement for its
2003 annual meeting, dated April 8, 2003 and filed with the SEC on
April 11, 2003, and information regarding the persons who may, under
the rules of the SEC, be considered to be participants in the
solicitation of CIMA's stockholders in connection with the proposed
transaction is set forth in CIMA's proxy statement for its 2003 annual
meeting, dated April 14, 2003 and filed with the SEC on April 11, 2003.
- - Additional information regarding these individuals and any interest
they have in the proposed transaction will be set forth in the joint
proxy statement/prospectus when it is filed with the SEC.
[AAIPHARMA LOGO] 29 [CIMA LOGO]
EMPLOYEE-ONLY WEB SITE PRESENTATION
-----------------------------------
OF AAIPHARMA OVERVIEW
---------------------
# # # # # # # # # # # # # # # # # # #
aaiPHARMA(TM)
DEVELOPING CHEMISTRY INTO MEDICINE
Within the SCIENCE
lies the MEDICINE
that will CHANGE a life.(TM)
30
[AAIPHARMA LOGO]
"WE ARE A SCIENCE-BASED
SPECIALTY
PHARMACEUTICAL
COMPANY."
31
[AAIPHARMA LOGO]
THE AAIPHARMA WORLD . . .
- Wilmington, NC
- 8 Sites in Wilmington, including HQ, Labs and
Manufacturing
- - RTP, NC
- - Charleston, SC
- - Natick, MA
- - North Brunswick, NJ
- - Kansas City, KS
[PICTURE]
- - Neu Ulm, Germany
- - Ontario, Canada
- - Bois Colombes, France
- - Arnhem, The Netherlands
32
[AAIPHARMA LOGO]
AAIPHARMA'S HERITAGE
- - aaiPharma was founded in 1979 by Dr. Frederick Sancilio as Applied
Analytical Industries Inc. (AAII)
- - His vision was, from the very beginning, to create a different kind of
pharmaceutical company
- - He started with analytical testing services and by the late '90s built
a leading provider of drug development services - AAI Development
Services
- - At the end of 2000, he stated the intent to transform to a specialty
pharmaceutical company
- - Today, we are a thriving, science-based specialty pharma company -
aaiPharma
33
[AAIPHARMA LOGO]
STRATEGIC FOCUS
DRIVE REVENUE GROWTH THROUGH ACQUISITIONS AND COMMERCIALIZATION OF PIPELINE
PRODUCTS
1. THERAPEUTIC FOCUS PAIN MANAGEMENT, CRITICAL CARE, AND
GASTROINTESTINAL DISEASES
2. ACQUISITION OF ESTABLISHED BRANDS PROVIDES IMMEDIATE PRESENCE
IN FOCUS THERAPEUTIC AREAS
3. BROAD RANGE OF RESEARCH AND DRUG DEVELOPMENT CAPABILITIES
DRIVE COMMERCIALIZATION OF PIPELINE
34
[AAIPHARMA LOGO]
RECENT ACCOMPLISHMENTS
- - ACQUIRED A UNIQUE DARVOCET(TM) LINE EXTENSION FROM ATHLON
PHARMACEUTICALS
- - LAUNCHED DARVON(R) COMPOUND 32
- - ACQUIRED EXCLUSIVE RIGHTS TO AN INJECTABLE CII PAIN MANAGEMENT
METHADONE PRODUCT FROM ROXANE LABS
- - ANNOUNCED A CO-PROMOTION ALLIANCE WITH SICOR FOR CALCITRIOL INJECTION
VIAL
- - COMMERCIALLY LAUNCHED AZASAN(TM) (75 MG/100 MG) AND CALCITRIOL
INJECTION VIAL
- - SUBMITTED NDA FOR M.V.I. ADULT(TM) TO FDA
35
[AAIPHARMA LOGO]
PLANNED MILESTONES 2003-2005
- - FDA APPROVAL OF AND LAUNCH OF UNIQUE DARVOCET(TM) LINE EXTENSION
- - 2 DARVON(R)/DARVOCET-N(R) LINE EXTENSIONS IN EACH OF 2004 AND 2005
- - COMMERCIAL LAUNCH OF M.V.I. ADULT(TM) IN 2004
- - SNDA FILING ON A NEW M.V.I.(R) LINE EXTENSION IN 2003
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[AAIPHARMA LOGO]
EXECUTIVE MANAGEMENT TEAM
EXECUTIVE OFFICER POSITION PRIOR HEALTHCARE EXPERIENCE
- ----------------- -------- ---------------------------
Frederick D. Sancilio, Ph.D. Chairman . Founder of aaiPharma, and positions
& CSO with Burroughs-Wellcome, Schering-Plough and
Hoffmann-Roche
Philip S. Tabbiner, D.B.A. President Executive positions with Bayer Diagnostics,
& CEO Bayer Corp., Chiron Diagnostics, Dupont
Merck-Pharmaceuticals and Radiopharm
William L. Ginna, Jr. EVP & CFO CFO London International Group, Americas
David M. Hurley President Executive positions with HealthNexis, Novartis
Pharmaceuticals (Geneva Pharmaceuticals and Novartis
Nutritional Corp.)
George E. Van Lear, Ph.D. President, Senetek PLC, DPT Technologies, Glaxo
R&D
Vijay Aggarwal, Ph.D. President President Quest Diagnostic Ventures,
AAI Int'l SmithKline Beecham, Bio Science Laboratories
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[AAIPHARMA LOGO]
AAIPHARMA
INNOVATION
AAI Development Services R&D
Realization Commercialization
Pharma
Division
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[AAIPHARMA LOGO]
THERAPEUTIC FOCUS AREAS
- - Current Focus:
- Pain Management
- Critical Care
- - Pipeline Opportunities:
- Gastrointestinal Diseases
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[AAIPHARMA LOGO]
FOCUS: PAIN MANAGEMENT
[PHOTO]
- - aaiPharma Portfolio of Brands:
- Darvon(R) and Darvocet-N(R) Family of Products
- Two line extensions in process for launch in 2003
- ProSorb-D(TM)
- Phase III clinical trials
- Evaluating Novel CII & CIII Products
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[AAIPHARMA LOGO]
PAIN MANAGEMENT PIPELINE
PRE-CLINICAL PHASE I PHASE II PHASE III PRE-FILING SUBMITTED TO FDA
<c>
DARVON(R)/DARVOCET-N(R) L.E. #1 - - - - -
DARVON(R)/DARVOCET-N(R) L.E. #2 - - - - -
PROSORB-D(TM) - - - -
DARVON(R)/DARVOCET-N(R) L.E. #3 - - NR NR
DARVON(R)/DARVOCET-N(R) L.E. #4 - - NR NR
DARVON(R)/DARVOCET-N(R) L.E. #5 - -
DARVON(R)/DARVOCET-N(R) L.E. #6 -
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[AAIPHARMA LOGO]
FOCUS: CRITICAL CARE
[PHOTO]
- aaiPharma Portfolio of Brands:
- M.V.I.(R) Family of Products
- Aquasol(TM) Family of Products
- Brethine(R)
- Azasan(TM)
- Proprietary brand of azathioprine, most
comprehensive line of dosage forms on the
market today
- 50 mg, unique 75 mg and 100 mg dosages
- Calcitriol Injection
- Injectable vitamin D product in vial form
- Shared market exclusivity
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Critical Care Pipeline [AAIPHARMA LOGO]
Pre-clinical Phase I Phase II Phase III Pre-filing Submitted to FDA
M.V.I. ADULT(TM) ---------------------------------------------------------------------------------
M.V.I.(R)L.E. --------------------------------------------------------------
BRETHINE(R)L.E. #1 --------------------------------------------------------------
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Gastrointestinal (GI) Pipeline [AAIPHARMA LOGO]
Pre-clinical Phase I Phase II Phase III Pre-filing Submitted to FDA
ECABET (TAL JV) ----------------------------------
MESALAMINE (PROLONIC(TM)) -------
6-OMEPRAZOLE (PROMELT(R)) -------
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Research & Development [AAIPHARMA LOGO]
- - Uniquely positioned R&D platform consisting of:
- INTELLECTUAL PROPERTY
- PROPRIETARY DRUG DELIVERY TECHNOLOGIES
- NEAR TERM PIPELINE OF BRANDED LINE EXTENSIONS
- LONGER TERM DRUG DEVELOPMENT PROGRAMS
- - Drug development joint venutre with Tanabe provides access to drug
discovery and novel chemical entities
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Proprietary Drug Delivery Technologies [AAIPHARMA LOGO]
PROSORB(R) Very rapid delivery of drugs orally - e.g., 18 minutes
PROSLO(TM) Delivers single or combination drugs predictably over a long
time period, having an immediate and extended release
component
PROCORE(TM) Slowly releases drugs over an extended period - e.g., 24
hours
PROSPHER(TM) A single injection releases drugs for up to six months
PROLONIC(TM) An oral dose that delivers drugs at specific times in the
colon
PROMELT(TM) A tablet that disappears in your mouth in seconds but allows
the release to be up to 24 hours
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AAI Development Services [AAIPHARMA LOGO]
FORMULATIONS DEVELOPMENT Development of oral solid, liquid and
parental dosage forms employing proprietary
and non-proprietary techniques
CLINICAL MANUFACTURING Manufacturing and distribution of blinded
clinical trial supplies. Small to medium
sized manufacturing of solid, liquid and
parental dosage forms
ANALYTICAL SERVICES Method development and validation, drug
product and ingredient testing,
microbiological support, stability storage
& studies, technical support and problem
solving
BIOPHARMACEUTICAL SERVICES BA/BE clinical services, bioanalytical
testing and biotechnology analysis and
synthesis
STATISTICAL SERVICES Full range of data compilation and data
management, including bio-statistical and
pharmacokinetic analysis
PHASE I - IV CLINICAL SERVICES Full range of Phase I-IV clinical services
to customers in the pharmaceutical,
biotechnology and medical device industries
REGULATORY AND CONSULTING SERVICES Consulting services with respect to
regulatory affairs, quality compliance and
physical and process validations
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Proven Track Record [AAIPHARMA LOGO]
- - 3500+ compounds
- - 400+ bioanalytical assays
- - 3000+ clinical studies
- - 50 active dosage form development projects
- - 55+ regulatory filings
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Development Services is Aligned with Strategy [AAIPHARMA LOGO]
- - Develop and enhance product knowledge
- - Apply expertise to internal pipeline
- - Foster business to business relationships
- - Facilitate product acquisitions
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Client Service Areas [AAIPHARMA LOGO]
- - Process improvement and revalidation
- - Rescue programs
- Assisting clients with FDA consent decree compliance
- - Comprehensive Product Development
- Medicis Agreement
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Select Client List [AAIPHARMA LOGO]
[Astra Zeneca Logo] [Bayer Logo] [Aventis Logo] [Merck Logo]
[Johnson & Johnson] [Bristol Myers Squibb Company Logo] [Novartis Logo]
[Osuka Logo] [Lilly Logo] [Teva Pharmaceuticals Logo]
[Novo Nordisk Logo] [Abbott Laboratories Logo]
[Schering-Plough Logo] [Sanofi-Synthetelabo Logo] [American Home Products
Corporation Logo]
[BASF Logo] [Elan Logo] [Glaxo Smith Kline Logo] [Roche Logo]
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FINANCIAL HIGHLIGHTS
[PHOTO]
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Fiscal Year 2002
2001 2002 % GROWTH
TOTAL REVENUE $141.1M $230.5M 63%
GROSS PROFIT 70.7 145.2 105%
INCOME FROM
OPERATIONS 13.2 55.4 320%
NET INCOME 5.9 22.7(1) 285%
DILUTED EPS $0.32 $1.20(1) 275%
1 Before extraordinary loss
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[AAIPHARMA LOGO]
Total aaiPharma Net Revenues
[CHART]
54
aaiPharma(TM)
-----------------------------------
DEVELOPING CHEMISTRY INTO MEDICINE
Within the SCIENCE
Lies the MEDICINE
that will CHANGE a life.(TM)
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