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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. ____)
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[x] Soliciting Material Pursuant to Rule 14a-12
Ascent Pediatrics, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
1. Title of each class of securities to which transaction applies:
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2. Aggregate number of securities to which transaction applies:
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3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
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5. Total fee paid:
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[ ] Fee paid previously with preliminary materials:
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
1. Amount previously paid:
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2. Form, Schedule or Registration Statement No.:
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3. Filing Party:
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4. Date Filed:
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[Medicis logo] [Ascent logo]
CONTACT:
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Medicis Pharmaceutical Corporation
Libby Ivy, Director, Investor Relations & Corporate Communications,
(602) 808-3854
or
Ascent Pediatrics, Inc.
Emmett Clemente, Ph.D., Chairman, President and Treasurer, (978) 658-2500
MEDICIS PHARMACEUTICAL ENTERS PEDIATRIC MARKET
BY AGREEING TO ACQUIRE ASCENT PEDIATRICS
SCOTTSDALE, ARIZONA AND WILMINGTON, MASSACHUSETTS--OCTOBER 1, 2001--Medicis
Pharmaceutical Corporation (NYSE:MRX) and Ascent Pediatrics, Inc. (OTC BB:ASCTP)
today announced that they have entered into a definitive merger agreement under
which Medicis will acquire Ascent, a specialty pharmaceutical company focused on
the marketing and sale of prescription products to U.S. based pediatricians. The
Ascent Board of Directors has unanimously recommended the transaction to its
stockholders. The closing of the transaction is contingent upon approval by
Ascent stockholders and customary closing conditions. Under a separate
agreement, entities affiliated with FS Private Investments have agreed to vote
shares, which today represent 53.9% of Ascent's outstanding shares, in favor of
the transaction.
Under the terms of the agreement, Medicis will pay approximately $60 million,
less certain retention payments and transaction fees and expenses, upon the
closing of the transaction for the outstanding capital stock and retirement of
indebtedness of Ascent and has agreed to pay to the holders of Ascent's common
equity up to an additional $10 million per year for each of the first five years
following closing based upon reaching certain sales threshold milestones on the
Ascent products (as defined under the agreement). Assuming that the transaction
closes as of December 31, 2001, Ascent expects that holders of its common equity
will receive upon the closing approximately $0.41 per share in cash. For federal
tax purposes, holders of Ascent's common equity will calculate gain or loss by
taking into account the cash received at closing and the value of the contingent
payments as of the closing.
Ascent's portfolio of specialty pharmaceutical pediatric products currently
includes ORAPRED(R) (prednisolone sodium phosphate), an oral liquid steroid for
children with asthma and other respiratory inflammatory conditions; PRIMSOL(R)
(trimethoprim HCl), an antibiotic oral solution for children with acute otitis
media, or middle ear infections; and PEDIAMIST(R), an over-the-counter saline
nasal mist, as well as certain projects that are under development. Sales of
ORAPRED(R) comprise the majority of the Ascent product sales. Ascent currently
supports these products with a dedicated pediatric sales force, numbering
approximately 70 representatives and sales management.
In addition to the acquired brands, Medicis believes the pediatric market
represents an untapped growth opportunity for several of its existing
dermatological products such as OVIDE(R), LOPROX(R) and certain other products.
This transaction provides Medicis with critical mass to assist with the entrance
into the category of pediatrics.
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According to IMS Health, the U.S. pediatric market is estimated to be
approximately $5 billion annually with annual prescriptions written growing in
excess of 17% over the past five years. There are approximately 55,000
office-based pediatricians nationwide with over 70% of pediatricians practicing
in group-office locations. Over 53% of pediatric diagnosis visits are for
infections or illnesses to the ear, nose, eyes or respiratory system.
Pediatricians write approximately 2.8 million total prescriptions for oral
glucocorticoids, 68.3% of the prescriptions were in liquid form. The total U.S.
market for liquid steroids is estimated to be approximately $70 million
annually.
"We are pleased to announce our carefully planned entrance into the pediatric
market with a transaction we expect to be accretive," said Jonah Shacknai,
Chairman and Chief Executive Officer of Medicis. "This natural extension of our
existing business model is expected to broaden both our business development and
research and development opportunities. Ascent Pediatrics is a highly respected
company in the field of pediatric medicine and we look forward to integrating
our two dynamic organizations. We are especially excited about the strength of
the Ascent sales organization."
Emmett Clemente, Ph.D., Chairman, President and Treasurer of Ascent said, "We at
Ascent are extremely pleased to have entered into this arrangement as it
provides us the best opportunity to transfer the mission of Ascent to a strong
and innovative organization, which can provide the pediatric community with
creative and valuable products. Additionally, it provides the required resources
for the development of our pipeline products. Over the last decade Medicis has
established itself as a vibrant organization dedicated to the field of
dermatology and understands the opportunities and challenges in establishing a
strong presence in a niche business."
Medicis recently released fiscal year 2002 revenue guidance of $192.0 million
and earnings per share guidance of $1.88. First quarter fiscal year 2002 (for
the quarter ending September 30, 2001) revenue guidance of $44.0 million and
earnings per share guidance of $0.42 remain unchanged. Assuming a January 2002
closing, Medicis expects to adjust its fiscal year 2002 earnings guidance upon
the transaction's closing and anticipates raising estimates absent special
charges associated with the transaction by approximately $0.03. Medicis is still
evaluating the impact of the Financial Accounting Standards Board's Statement of
Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets"
(SFAS No. 142) on the amortization of intangible assets and therefore any
potential impact of the new statement is not currently included in the earnings
guidance provided by Medicis. Medicis is still conducting an evaluation of the
potential effect of certain in-process research and development projects
included in this transaction, the potential effect of possible net operating
loss carryforwards and the potential effect of the valuation of certain
intangible assets. Any potential impact of these items is expected to be
reported at the time of the transaction's closing date.
Based in Wilmington, Mass., Ascent is a pharmaceutical company primarily
dedicated to the specialty of pediatrics. Founded in 1989, Ascent markets
pediatric prescription pharmaceutical products including ORAPRED(R)
(prednisolone sodium phosphate 20.2mg/5mL), a liquid steroid for children with
asthma and other inflammatory conditions, PRIMSOL(R) (trimethoprim HCl oral
solution, 50mg/5mL) for children with acute otitis media, or middle ear
infections and PEDIAMIST(R), an over-the-counter saline nasal mist.
Medicis is the leading independent pharmaceutical company in the United States
focusing primarily on the treatment of dermatological conditions. Medicis
develops and markets leading products for major segments within dermatology,
including acne, fungal infections, rosacea, hyperpigmentation, photoaging,
psoriasis, eczema, skin and skin-structure infections, seborrheic dermatitis,
head lice and cosmesis (improvement in the texture and appearance of skin). The
Company's primary products include the prescription brands DYNACIN(R)
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(minocycline HCl), TRIAZ(R) (benzoyl peroxide), LUSTRA(R) (hydroquinone),
LUSTRA-AF(R) (hydroquinone) with sunscreen, ALUSTRA(TM) (hydroquinone) with
retinol, LOPROX(R) (ciclopirox), PLEXION(TM) (sodium sulfacetamide/sulfur),
PLEXION-TS(TM) (sodium sulfacetamide/sulfur), OMNICEF(R) (cefdinir), OVIDE(R)
(malathion), LIDEX(R) (fluocinonide), SYNALAR(R) (fluocinolone acetonide),
TOPICORT(R) (desoximetasone) and A/T/S(R) (erythromycin); the over-the-counter
brand ESOTERICA(R); and BUPHENYL(R) (sodium phenylbutyrate), a prescription
product indicated in the treatment of Urea Cycle Disorder.
NOTE TO INVESTORS:
Medicis will host a conference call at 4:45 p.m. Eastern Time (1:45 p.m. Pacific
Time) today to review today's announcement, as well as provide an update on any
other business matters of Medicis. A live webcast will also be available at
http://www.medicis.com. The webcast will be archived on Medicis' Web site for
two business days following the live call.
The phone number to join the conference call is (719) 457-2629 for both domestic
and international callers. No access code is necessary for the live call. For
investors unable to participate in the live call, a replay will be available
soon after the live call. The phone number to access the replay is (719)
457-0820 and the access code is 494548. The replay will be available for two
business days following the live call.
This press release includes "forward-looking statements" as defined by the
Securities and Exchange Commission. Such statements are those concerning
Medicis, Ascent and the combined companies' merger and strategic plans,
expectations and objectives for future operations. All statements included in
this press release that address activities, events or developments that Medicis
or Ascent expects, believes or anticipates will or may occur in the future are
forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended. This includes completion of the proposed
merger, earnings estimates, future financial performance and other matters.
These statements are based on certain assumptions made by Medicis and Ascent
based on their experience and perception of historical trends, current
conditions, expected future developments and other factors they believe are
appropriate in the circumstances. Such statements are subject to a number of
assumptions, risks and uncertainties, many of which are beyond the control of
Medicis and Ascent. Any such projections or statements include the current views
of Medicis and Ascent with respect to future events and financial performance.
No assurances can be given, however, that these events will occur or that such
projections will be achieved and there are numbers or important factors that
could cause actual results to differ materially from those projected, including
the ability to consummate the transaction, the ability of Medicis to
successfully integrate Ascent's operations or the ability to realize anticipated
synergies and benefits of the transaction. The risks and uncertainties normally
incident to the pharmaceutical industry, dependence on sales of key products,
the uncertainty of future financial results and fluctuations in operating
results, dependence on Medicis' acquisition strategy, the timing and success of
new product introductions and other risks described from time to time in
Medicis' SEC filings and in Ascent's Annual Report on Form 10-K for the year
ended December 31, 2000, and its most recent quarterly report filed with the
SEC. Forward-looking statements represent the judgment of Medicis' and Ascent's
management, as of the date of this release, and Medicis and Ascent disclaim any
intent or obligation to update any forward-looking statements.
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IMPORTANT ADDITIONAL INFORMATION WILL BE FILED WITH THE SEC
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Ascent plans to file with the SEC and mail to its stockholders a Proxy Statement
in connection with the transaction. The Proxy Statement will contain important
information about Medicis, Ascent, the transaction and related matters.
Investors and security holders are urged to read the Proxy Statement carefully
when it is available.
Investors and security holders will be able to obtain free copies of the Proxy
Statement and other relevant documents filed with the SEC by Medicis and Ascent
through the web site maintained by the SEC at http://www.sec.gov.
In addition, investors and security holders will be able to obtain free copies
of the Proxy Statement (when it is available) by directing a request to: Ascent
Pediatrics, Inc. 187 Ballardvale Street, Suite B125, Wilmington, MA 01887 (tel:
978-658-2500).
Medicis and Ascent and their respective directors and executive officers, may be
deemed to be participants in the solicitation of proxies in respect of the
transaction contemplated by the merger agreement. Information regarding Medicis'
directors and executive officers is contained in Medicis' Form 10-K for the year
ended June 30, 2001, and its proxy statement dated October 6, 2000, which are
filed with the SEC. As of September 24, 2001, Medicis' directors and executive
officers beneficially owned approximately 1,252,059 shares, or 4.0% of Medicis'
outstanding common stock and 13.4% of the outstanding voting common stock.
Information regarding Ascent's directors and executive officers is contained in
Ascent's Form 10-K for the year ended December 31, 2001 and its proxy statement
dated April 30, 2001, which are filed with the SEC. As of October 1, 2001,
Ascent's directors and executive officers beneficially owned approximately
22,293,280 shares, or 77.7% of Ascent's depositary shares. In addition, certain
directors and executive officers of Ascent have direct or indirect interests in
the merger due to securities holding, vesting of options, repayment of debt to
entities affiliated with certain directors, transaction fees payable to entities
affiliated with certain directors, executive retention payments due to certain
executive officers upon the closing of the merger under retention letters
recently entered into between the Company and its executive officers, and
transaction incentive payments due upon the closing of the merger to certain
directors under consulting agreements which were recently amended to provide for
a one-time payment upon the sale of Ascent. In addition, current and former
directors and officers of Ascent will be indemnified by the surviving
corporation in the merger, and benefit from insurance coverage, for liabilities
that may arise from their service as directors and officers of Ascent prior to
the merger. Additional information regarding the participants in the
solicitation will be contained in the Proxy Statement.
NOTE: Full prescribing information for any Medicis or Ascent prescription
product is available by contacting the Companies. OMNICEF(R)is a registered
trademark of Abbott Laboratories, Inc. under a license from Fujisawa
Pharmaceutical Co., Ltd. ORAPRED(R), PRIMSOL(R)and PEDIAMIST(R)are registered
trademarks of Ascent Pediatrics, Inc. All other marks (or brands) and names are
the property of Medicis Pharmaceutical Corporation or its Affiliates.
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