Cypress Bioscience, Inc. (Nasdaq: CYPB) (“Cypress”), a
pharmaceutical company engaged in the development of innovative
drugs to treat central nervous system (CNS) disorders, announced
today that it has entered into a definitive merger agreement with
Ramius V&O Acquisition LLC, an affiliate of Ramius LLC
(collectively, “Ramius”) and affiliates of Royalty Pharma (“Royalty
Pharma”), providing for the acquisition of Cypress by Ramius and
Royalty Pharma. Under the terms of the agreement, which was
unanimously approved by Cypress’ Board of Directors, Ramius will
amend its existing tender offer to acquire all of the outstanding
shares of Cypress common stock it does not already own at an
increased price of $6.50 per share in cash. The transaction has a
total equity value of approximately $255 million on a fully-diluted
basis.
The $6.50 per share cash purchase price represents a premium of
approximately 63% over Ramius’ original unsolicited proposal to
acquire Cypress for $4.00 per share in cash, and a premium of
approximately 160% to the Company‘s unaffected share price on
July 16, 2010, the last trading day prior to the public disclosure
of Ramius’ unsolicited proposal.
“For more than two months, Cypress’ Board of Directors undertook
a comprehensive evaluation of the Company’s strategic
alternatives,” said Daniel H. Petree, Lead Independent Director of
Cypress’ Board of Directors. “After thorough and extensive analysis
with our financial advisors, Cypress’ Board unanimously concluded
that this transaction with Ramius and Royalty Pharma provides
significant cash value to our stockholders and is in the best
interests of our stockholders, customers and employees.”
Ramius Partner Managing Director Jeffrey C. Smith stated, “We
are pleased that Cypress’ Board of Directors has accepted our
all-cash offer of $6.50 per share. We firmly believe that this
offer represents full and fair value for all Cypress stockholders
and look forward to an expeditious closing of the merger.” Mr.
Smith went on to state, “Royalty Pharma has proven to be an
extremely valuable partner in our acquisition of Cypress. Their
expertise in investing in and acquiring royalty interests has
allowed us to structure a unique and efficient transaction that we
believe clearly maximizes value for all stockholders.”
Pablo Legorreta, Chief Executive Officer of Royalty Pharma,
commented, “As the leading investor in biopharmaceutical royalties,
we have a long history of working in partnerships with biotech
companies and their management teams. This transaction validates
the successful record of Cypress’ team under the leadership of Dr.
Jay Kranzler, which includes the development of two FDA approved
products.” Mr. Legorreta further added, “We are excited to add the
Savella® royalty to our diversified portfolio of leading
biopharmaceutical royalties and look forward to working with
Cypress management to enhance the value of the company’s pipeline
assets.”
Cypress’ Board of Directors unanimously determined that the
definitive merger agreement with Ramius and Royalty Pharma and the
terms of the Ramius/Royalty Pharma tender offer are fair to and in
the best interests of Cypress and its stockholders, and recommends
that Cypress stockholders tender their Cypress shares to
Ramius/Royalty Pharma and adopt the merger agreement. Cypress will
amend its Schedule 14D-9 previously filed with the Securities and
Exchange Commission to reflect the recommendation of its Board of
Directors.
The transaction is subject to certain closing conditions,
including the valid tender of sufficient shares, which, when added
to shares owned by Ramius and its affiliates and Royalty Pharma,
constitute more than 50% of the total number of common shares
outstanding on a fully-diluted basis. It is also subject to
regulatory approvals and other customary closing conditions. There
is no financing condition to consummate the transaction.
Ramius and Royalty Pharma’s tender offer for all of the
outstanding shares of common stock of Cypress, which was scheduled
to expire at Midnight, New York City time, December 17, 2010, will
be extended and remain open through Midnight, New York City time,
on December 29, 2010, unless further extended in accordance with
the terms of the merger agreement. As of the close of business on
December 14, 2010, approximately 3,109,292 shares of common stock
of Cypress, representing approximately 8.1% of all outstanding
shares, were validly tendered and not withdrawn pursuant to the
tender offer. This amount does not include the 3,815,000 shares
owned by Ramius and its affiliates.
Following the completion of the tender offer and, if required,
receipt of approval by Cypress’ stockholders, Ramius expects to
consummate a merger of Ramius V&O Acquisition LLC and Cypress
in which any shares of Cypress not tendered into the tender offer
will be cancelled in exchange for the right to receive $6.50 per
share in cash. The transaction is currently expected to close in
January 2011, but could close as early as December 30, 2010. The
terms and conditions of Ramius and Royalty Pharma’s amended tender
offer will be described in amended offer documents, which will be
filed with the Securities and Exchange Commission.
Jefferies & Company, Inc. is serving as financial advisors
to Cypress and Cooley LLP, Sullivan & Cromwell LLP and Potter
Anderson & Corroon LLP are serving as Cypress’ legal advisors.
Perella Weinberg Partners is serving as financial advisors to the
Board of Directors of Cypress. Olshan Grundman Frome Rosenzweig
& Wolosky LLP is serving as legal advisor to Ramius. Groton
Partners is serving as financial advisor to Royalty Pharma. Goodwin
Procter LLP and Akin Gump, Strauss, Hauer & Feld, LLP are
serving as legal advisors to Royalty Pharma.
About Cypress
Cypress is a pharmaceutical company dedicated to the development
of innovative drugs targeting large unmet medical needs for
patients suffering from a variety of disorders of the central
nervous system. Since 1999, Cypress has received FDA approvals for
both of the products it brought to the FDA during that period,
including for Prosorba™, a medical device for rheumatoid arthritis,
and Savella® (milnacipran HCl), for fibromyalgia. The Company
focuses on generating stockholder value by reaching clinical
development milestones as quickly and efficiently as possible.
Cypress’ development-stage assets include CYP-1020 for cognitive
impairment in schizophrenia, Staccato® nicotine for smoking
cessation and intranasal carbetocin for autism. More information on
Cypress and its products and development assets is available at
http://www.cypress.com/.
About Ramius
Ramius LLC is a registered investment advisor that manages
assets in a variety of alternative investment strategies. Ramius
LLC is headquartered in New York with offices located in London,
Luxembourg, Tokyo, Hong Kong and Munich.
About Royalty Pharma
Royalty Pharma is the industry leader in acquiring
revenue-producing intellectual property -- principally royalty
interests in marketed and late stage biopharmaceutical products
with a market value of over $2 billion. Royalty Pharma currently
owns a diversified portfolio of royalty interests in several
high-quality blockbuster biopharmaceutical products, including
Amgen’s Neupogen® and Neulasta®, Genentech’s Rituxan®, Gilead’s
Emtriva®, Truvada® and Atripla®, Celgene’s Thalomid®, and now
Abbott’s Humira®. The company has a ten year history of providing
value to holders of royalty interests, including its joint $525
million acquisition with Gilead Sciences of Emory University’s
emtricitabine royalty interest and its acquisitions of
approximately 80% of Memorial Sloan Kettering’s U.S. and
international royalty interests in Neupogen® and Neulasta® for over
$400 million. The strong market position enjoyed by the products in
which Royalty Pharma owns royalties -- generally the sole or number
one product in their therapeutic classes -- and its revenue
diversification are some of the key attributes contributing to the
investment grade rating of Royalty Pharma’s finance trust, which is
further wrapped by a mono-line insurer to “AAA”/”Aaa” by S&P
and Moody’s. More information on Royalty Pharma is available at
www.royaltypharma.com.
Forward Looking Statement
The offer to buy shares of Cypress common stock will be made
only pursuant to the offer to purchase and related materials that
Ramius has filed with the SEC that will be amended. Cypress
stockholders and other investors should read these materials
carefully because they contain important information, including the
terms and conditions of the offer. These materials and any other
documents filed by Ramius or Cypress with the SEC may be obtained
free of charge at the SEC’s website at www.sec.gov and by
contacting Cypress Investor Relations at 858-452-2323. In addition,
investors and security holders will be able to obtain free copies
of the documents filed with the SEC on Cypress’ website at
www.cypress.com. Investors and security holders are urged to read
the Schedule TO, as amended, and the Schedule 14D-9, as
amended, and the other relevant materials before making any
investment decision with respect to the Ramius tender offer.
Statements in this press release that relate to future results
and events are forward-looking statements based on Cypress and
Ramius’ and Royalty Pharma’s current expectations regarding tender
offer and transactions contemplated by the merger agreement. Actual
results and events in future periods may differ materially from
those expressed or implied by these forward-looking statements
because of a number of risks, uncertainties and other factors.
There can be no assurances that a transaction will be consummated.
Other risks, uncertainties and assumptions include the possibility
that expected benefits may not materialize as expected; that the
transaction may not be timely completed, if at all; that, prior to
the completion of the transaction, if at all, Cypress may not
satisfy one or more closing conditions and other risks that are
described in Cypress Annual Report on Form 10-K for the year ended
December 31, 2009 and in its subsequently filed SEC reports.
Cypress undertakes any obligation to update these forward-looking
statements except to the extent otherwise required by law.
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