UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 2, 2013
QUESTCOR PHARMACEUTICALS, INC.
(Exact Name of Registrant as Specified in Charter)
| California | 001-14758 | 33-0476164 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) | ||
| 1300 Kellogg Drive, Suite D, Anaheim, California |
92807 | |||
| (Address of Principal Executive Offices) | (Zip Code) | |||
Registrant’s telephone number, including area code: (714) 786-4200
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 1.01 | Entry into a Material Definitive Agreement. |
On January 2, 2013, Questcor Pharmaceuticals, Inc. (“Questcor”) and its wholly owned subsidiary (“Acquisition Co.”), entered into a Share Purchase Agreement (the “Agreement”) to acquire all of the issued and outstanding shares of BioVectra Inc. (“BioVectra”). Upon closing of the transaction contemplated by the Agreement, BioVectra will become a wholly owned subsidiary of Acquisition Co. The purchase price consists of approximately C$50.0 million in cash at the closing plus up to an additional C$50.0 million in cash tied to the future performance of BioVectra. The consummation of the transaction contemplated by the Agreement is subject to customary closing conditions.
The parties to the Agreement have made customary representations and warranties, which will generally survive for a period of 24 months following the closing of the transaction. In addition, the parties to the Agreement are subject to customary pre-closing covenants pursuant to the Agreement. The covenants require, among other things, that BioVectra’s business be generally conducted in the ordinary course in all material respects during the interim period between the execution of the Agreement and the closing of the transaction. The parties to the Agreement have rights to indemnification for, among other things, breaches of representations and warranties, subject to customary limitations, and for non-performance of their respective covenants.
The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the Agreement, which will be filed as an exhibit to Questcor’s Annual Report on Form 10-K for the year ending December 31, 2012.
| Item 8.01 | Other Events. |
On January 2, 2013, Questcor and BioVectra issued a joint press release announcing the entry into the Agreement. A copy of that press release is attached hereto as Exhibit 99.1.
| Item 9.01 | Financial Statements and Exhibits. |
| (d) |
Exhibits. | |
| Exhibit |
Description | |
| 99.1 | Joint Press Release issued on January 2, 2013. | |
SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: January 4, 2013 | QUESTCOR PHARMACEUTICALS, INC. | |||||
| By: | /s/ Michael H. Mulroy | |||||
| Michael H. Mulroy | ||||||
| Senior Vice President, Chief Financial Officer and General Counsel | ||||||
EXHIBIT INDEX
| Exhibit |
Description | |
| 99.1 | Joint Press Release issued on January 2, 2013. | |
Exhibit 99.1
Questcor Pharmaceuticals to Acquire BioVectra Inc.
— Transaction provides vertical integration, third party manufacturing capabilities and further secures Acthar manufacturing trade secrets —
— Acquisition expected to be accretive to future financial results —
ANAHEIM, Calif., January 2, 2013 — Questcor Pharmaceuticals, Inc. (NASDAQ:QCOR) today announced that it has signed a definitive agreement to acquire all issued and outstanding shares of BioVectra Inc., for an upfront payment of C$50 million. BioVectra is a supplier of contract manufacturing services to the global pharmaceutical and biotechnology industry and manufactures active pharmaceutical ingredients (API’s), chemical intermediates, and bioprocessing reagents.
Located in Prince Edward Island, Canada, BioVectra is a trusted, long-time partner to many of the industry’s leading pharmaceutical companies. It has been Questcor’s manufacturing partner for the API in Questcor’s H.P. Acthar® Gel (repository corticotropin injection) for nearly a decade. The acquisition will enable Questcor to further secure the manufacturing process trade secrets surrounding Acthar. BioVectra will continue to operate independently in Prince Edward Island, under its existing management team and Questcor intends to support the continued growth of BioVectra’s business.
“We are excited to join efforts with BioVectra as we look to diversify our revenue,” said Don M. Bailey, President and CEO of Questcor. “This action puts us in a better position to meet the continuing growth in demand for Acthar, brings to our company a broader depth of technical and scientific expertise, and provides us with a platform for potential international expansion.”
“We pride ourselves on being a strategic partner, forging long-term relationships with our clients and utilizing our proven technical skills to serve our clients’ business needs,” said Ron Keefe, CEO of BioVectra. “Questcor has been an important long term partner and we look forward to further building our relationship.”
BioVectra’s capabilities include synthetic organic chemistry, natural extraction of bioactive compounds from plant and animal-based biomass sources, PEGylation and conjugation chemistry, and fermentation of a variety of molecule types. BioVectra’s facilities have been approved by United States and Canadian regulatory authorities to produce and supply intermediates, API’s and drug substances.
BioVectra’s facilities are staffed by approximately 180 employees including chemists, engineers and technicians. BioVectra had sales of approximately $28 million in its last fiscal year ended August 31, 2012, a 15% increase over its prior fiscal year.
Transaction Details
Questcor will purchase all issued and outstanding shares of BioVectra for an upfront payment of C$50 million, utilizing cash on hand. BioVectra stakeholders could also receive additional cash consideration, based on BioVectra’s financial results over the next three years. The contingent payments could result in the payment of up to an additional C$50 million. The transaction is expected to be immediately accretive to non-GAAP earnings. Subject to customary conditions, Questcor anticipates closing the transaction in January 2013.
About BioVectra
BioVectra Inc. is a supplier to the global pharmaceutical industry, operating from three, FDA inspected facilities in Prince Edward Island, Canada. The company is proficient in synthetic organic chemistry, natural extraction of bioactive compounds, PEGylation and conjugation chemistry, and fermentation of chemical and biologic molecules. BioVectra has submitted 10 product filings, including ANDA, DMF, VMF, and CMC section preparations for both the FDA and Health Canada. These filings have been made for both synthetic and biologic molecules, and include a human injectable API, as well as a final drug product.
About Questcor
Questcor Pharmaceuticals, Inc. is a biopharmaceutical company focused on the treatment of patients with serious, difficult-to-treat autoimmune and inflammatory disorders. Questcor’s primary product is H.P. Acthar® Gel (repository corticotropin injection), an injectable drug that is approved by the FDA for the treatment of 19 indications. Of these 19 indications, Questcor currently generates substantially all of its net sales from three indications: the treatment of proteinuria in idiopathic types of nephrotic syndrome, the treatment of acute exacerbations of multiple sclerosis in adults, and the treatment of infantile spasms in children under two years of age. With respect to nephrotic syndrome, the FDA has approved Acthar to “induce a diuresis or a remission of proteinuria in the nephrotic syndrome without uremia of the idiopathic type or that due to lupus erythematosus.” Questcor has also launched a pilot effort in rheumatology, as Acthar is approved for several rheumatology-related conditions including Dermatomyositis, Polymyositis, Lupus and Rheumatoid Arthritis. Questcor is also
exploring the possibility of developing markets for other on-label indications and the possibility of pursuing FDA approval of additional indications not currently on the Acthar label where there is high unmet medical need. For more information about Questcor, please visit www.questcor.com.
Note: Except for the historical information contained herein, this press release contains forward-looking statements that have been made pursuant to the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance or the future financial performance of BioVectra after our acquisition. In some cases, you can identify forward-looking statements by terminology such as “believes,” “continue,” “could,” “estimates,” “expects,” “growth,” “may,” “plans,” “potential,” “should,” “substantial” or “will” or the negative of such terms and other comparable terminology. These statements are only predictions. Actual events or results may differ materially. Factors that could cause or contribute to such differences include, but are not limited to, the following:
| • | Successful close of the BioVectra acquisition and subsequent integration of the BioVectra business with our business; |
| • | Our ability to manage, and grow, a contract manufacturing business, of which we have no previous experience operating as part of our business; |
| • | Our reliance on Acthar for a substantial amount of our net sales and profits; |
| • | Research and development risks and our reliance on third-parties to conduct research and development and the ability of research and development to generate successful results; |
| • | Our ability to comply with foreign regulations related to the operation of BioVectra’s business, of which we have no prior experience; |
| • | Our ability to comply with federal and state regulations, including regulations relating to pharmaceutical sales and marketing practices; |
| • | The results of any pending or future litigation, investigations or claims, including with respect to the investigation by the United States Attorney’s Office for the Eastern District of Pennsylvania regarding the Company’s promotional practices; |
| • | Regulatory changes or other policy actions by governmental authorities and other third parties in connection with U.S. health care reform or efforts to reduce federal and state government deficits; |
| • | Other risks discussed in Questcor’s annual report on Form 10-K for the year ended December 31, 2011 as filed with the Securities and Exchange Commission, or SEC, on February 22, 2012, and other documents filed with the SEC. The risk factors and other information contained in these documents should be considered in evaluating Questcor’s prospects and future financial performance. |
Questcor undertakes no obligation to publicly release the result of any revisions to these forward-looking statements, which may be made to reflect events or circumstances after the date of this release.
For more information, please visit www.questcor.com or www.acthar.com.
CONTACT INFORMATION:
Questcor Pharmaceuticals, Inc.
Don Bailey
714-786-4210
dbailey@Questcor.com
EVC Group
| Investors | Media | |
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Doug Sherk
415-568-4887