Advanced Polymer Systems Completes Sale Of Cosmeceutical Product Lines And Technology Rights For Certain Topical Pharmaceuticals To R.P. Scherer
$26.5 Million in Performance Payments
Meakem to Retire, O'Connell to Assume President/CEO Posts
REDWOOD CITY, CA, July 26, 2000 – Advanced Polymer Systems (NASDAQ: APOS) today announced the successful completion of the sale of its cosmeceutical product lines and technology rights for certain topical pharmaceuticals to R.P. Scherer Corporation, a subsidiary of Cardinal Health, Inc.
In the transaction, Advanced Polymer Systems receives $25 million up-front and up to an additional $26.5 million over the next three years relating to performance milestones of the purchased business (a potential total of $51.5 million).
R.P. Scherer receives rights to patented Microsponge® and Polytrap® technologies, which deliver active medicative ingredients to the skin, as well as Advanced Polymer Systems' cosmeceutical businesses' management and research and development team. R.P. Scherer also acquires the manufacturing facility in Lafayette, LA, which produces Microsponge® and Polytrap® polymers.
Advanced Polymer Systems will retain certain rights to the Microsponge® technology and will continue to receive the income stream from certain topical prescription medicines and their line extensions, including RETIN-A® Micro™, a best-selling acne medication (licensed to Ortho-McNeil, a subsidiary of Johnson & Johnson), and a new product for the treatment of actinic keratoses (licensed to Dermik, a subsidiary of Aventis Pharmaceutical) for which a Fall 2000 FDA marketing clearance is anticipated. In addition to these rights, Advanced Polymer Systems will also receive royalties from other topical prescription products that will be developed by R.P. Scherer, including products currently under development with Fujisawa and Pharmacia. Further, the transaction provides for a manufacturing collaboration between the two companies for Advanced Polymer Systems future Microsponge and certain oral technology applications.
Meakem Retires, O'Connell to Assume President/CEO Posts Advanced Polymer Systems also announced that John J. Meakem, Jr. will retire as president and chief executive officer with the closure of the transaction, and that he will also step down as Chairman of the Board at the Annual Shareholder's meeting, which will be held in early Fall. A search is underway for a new Board Chairman.
Effective August 1, 2000 Michael P. J. O'Connell will assume the positions of president and chief executive officer of Advanced Polymer Systems. O'Connell has been Advanced Polymer Systems' executive vice president and chief financial officer and, for the last two years, has been president of the company's ethical pharmaceutical business which will, in effect, become the new Advanced Polymer Systems.
Commenting on the transaction and the appointment, Meakem noted, “We have been planning this management transition for some time, and with the successful sale of our cosmeceutical business to our partners at R.P. Scherer, I feel that now is the right time for me to retire from the business. The Board has asked that I remain an advisor to the Company, and I am pleased to do so; but I intend to spend most of my time pursuing a more active role in other ventures, as well as directing our family business investments and philanthropic interests.
“We have provided important financial resources for a new focus of Advanced Polymer Systems as a pharmaceutically-based, drug delivery company with a dedicated, solid management structure, a world-class research team and important new patented technologies. I had committed to the Board that I would stay in place until this was done, and I feel confident that Advanced Polymer Systems is now well positioned in this respect. And, our cosmeceutical group and business is a natural fit for R.P. Scherer, as well. They are an important partner, close to what we have been doing; and our business fits well into their strategic plan.
“I leave the reins of Advanced Polymer Systems in the most capable hands of Mike O'Connell. Mike is a proven executive and a fine leader. He has worked closely with me for over eight years with increasing responsibilities, and has been a driving force behind the development of our ethical pharmaceuticals business. This is a very logical and beneficial move for the Company.”
Commented O'Connell, “I am pleased and privileged to take over as chief executive and particularly excited with the prospects for the newly configured Advanced Polymer Systems. We have a strong technology platform and an excellent R&D team dedicated to continuing our extremely promising efforts in ethical drug delivery. And in this respect, we are entering a new phase of our relationships with both Ortho McNeil and Dermik whereby we are expanding our research mandate in the ethical pharmaceutical area.
“Our research effort at Advanced Polymer Systems has had great success in expanding current technology and developing novel patented delivery systems for a number of high potential, internal prescription drug areas, particularly using bioerodible polymers. We now are well positioned both financially and with major multi-national corporate partners to realize the commercial benefits of our efforts on behalf of all our shareholders.”
Except for historical information, this news release contains certain forward-looking statements that involve risks and uncertainties, including among others, uncertainty associated with timely approval, launch and acceptance of new products, establishment of new corporate alliances and progress in research and development programs. Other risks and uncertainties associated with the Company's business and prospects are identified in the Company's filings with the Securities and Exchange Commission. The Company does not undertake to revise these forward-looking statements to reflect events or circumstances occurring in the future.
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