(Cary, N.C.) Cornerstone Therapeutics Inc. (NASDAQ: CRTX) has announced the closing of its acquisition of EKR Therapeutics, Inc., a privately-held specialty pharmaceutical company focused on the acute-care hospital setting. Pursuant to the merger agreement, EKR Therapeutics will become a wholly owned subsidiary of Cornerstone.
With the completion of the acquisition, Cornerstone immediately assumes responsibility for the marketing and promotion of CARDENE® I.V. (nicardipine hydrochloride), which is indicated for the short-term treatment of hypertension when oral therapy is not feasible or desirable. Cornerstone also acquired RETAVASE® (Reteplase), which is indicated for use in the management of acute myocardial infarction (AMI) in adults, for the improvement of ventricular function following AMI, the reduction of the incidence of congestive heart failure and the reduction of mortality associated with AMI. Cornerstone is targeting FDA approval of a new active ingredient supplier and relaunch of RETAVASE to the market in 2013.
“We believe this transaction delivers on our promise to transform Cornerstone into a leading specialty pharmaceutical company that provides hospital and related specialty market products,” said Craig A. Collard, Cornerstone’s Chief Executive Officer. “We expect that the combination of Cornerstone and EKR will generate synergies, while the addition of the EKR sales force will significantly expand our reach in the U.S. hospital market. With the launch of CRTX 080 (lixivaptan) and the relaunch of RETAVASE in 2013, our sales force will be actively promoting four products within the hospital channel. From a revenue growth perspective, we believe that annualized sales from CARDENE I.V. could exceed $50 million.”
Collard added, “Lixivaptan is under review by the FDA for the treatment of hyponatremia, which is a common condition in patients with heart failure. With the acquisition of EKR and specifically, CARDENE I.V., we have the opportunity to strengthen our existing relationships within the cardiology community as we prepare for the approval and launch of lixivaptan.”
Cornerstone acquired EKR Therapeutics for an initial cash payment of approximately $125 million and additional payments contingent upon the achievement of certain milestones related to regulatory approval of a new active ingredient supplier for RETAVASE and sales of RETAVASE during approximately the first three years following commercial relaunch. As part of the EKR transaction, Cornerstone entered into a credit agreement with Chiesi Farmaceutici, S.p.A., its largest shareholder, in which Chiesi is providing a five-year Term Loan A of $60 million and a five-year Term Loan B of $30 million. The Term Loan B may be converted into common stock of Cornerstone at $7.098 per share at Chiesi’s option at any time during the first 24 months following the closing of the credit arrangement.
“We believe the terms of the credit arrangement with Chiesi are favorable to Cornerstone when compared to financing alternatives that may be available to us in the public markets,” said Vincent T. Morgus, Cornerstone’s Chief Financial Officer. “More importantly, we believe our ability to access Chiesi as a financing source will continue to help us capitalize on new potential growth opportunities.”
The general and administrative functions of the combined company will be consolidated at Cornerstone’s headquarters in Cary, N.C.
About Cornerstone Therapeutics
Cornerstone Therapeutics Inc. (NASDAQ: CRTX), headquartered in Cary, N.C., is a specialty pharmaceutical company focused on commercializing products for the hospital, niche respiratory and related specialty markets. Key elements of the Company’s strategy are to focus its commercial and internal development efforts in the hospital and related specialty product sector within the U.S. pharmaceutical marketplace; continue to seek out opportunities to acquire companies and marketed and/or registration-stage products that fit within the Company’s focus areas; and generate revenues by marketing approved generic products through the Company’s wholly-owned subsidiary, Aristos Pharmaceuticals, Inc. For more information, visit www.crtx.com.