FILED BY ALKERMES, INC. PURSUANT TO RULE 425
UNDER THE SECURITIES ACT OF 1933 AND
DEEMED FILED PURSUANT TO RULE 14A-12
OF THE SECURITIES EXCHANGE ACT OF 1934
SUBJECT COMPANY: RELIANT PHARMACEUTICALS, LLC
COMMISSION FILE NO.: 0-19267
FOR RELEASE THURSDAY, MARCH 21, 2002 AT 12:01 A.M.
ALKERMES AND RELIANT PHARMACEUTICALS ANNOUNCE MERGER
-- MARKETED PRODUCTS AND COMMERCIAL INFRASTRUCTURE ACCELERATE ALKERMES'
GROWTH INTO INTEGRATED PHARMACEUTICAL COMPANY --
CAMBRIDGE, MA AND LIBERTY CORNER, NJ -- MARCH 21, 2002 -- Alkermes, Inc.
(Nasdaq: ALKS) and Reliant Pharmaceuticals, LLC ("Reliant") today announced that
the Board of Directors of Alkermes and the Board of Managers of Reliant have
each unanimously approved a definitive merger agreement between the two
companies. The merger unites Reliant's three marketed product brands, product
development pipeline, extensive U.S. sales and marketing infrastructure and
management team with Alkermes' advanced drug formulation and development
capabilities, pipeline of proprietary and partnered products and manufacturing
capabilities to create a rapidly growing integrated pharmaceutical company.
The transaction is structured as a tax-free exchange of equity, in which
non-Alkermes equity holders of Reliant will receive a total of 31.07 million
shares of Alkermes stock or approximately 31% of the outstanding shares of the
new company post-closing. Based upon the March 20, 2002 closing market price for
Alkermes of $30.05 per share, the purchase price for the portion of Reliant not
already owned by Alkermes is $934 million.
Reliant brings rights to five currently marketed products based on three
well-recognized prescription pharmaceutical brands: Lescol(R), DynaCirc(R) and
Axid(R). Lescol(R) and Lescol(R) XL participate in the rapidly expanding $11
billion U.S. market for statin-based cholesterol management - combining
effective treatment for the majority of patients requiring statin therapy with a
best-in-class safety profile. DynaCirc(R) and DynaCirc CR(R) compete in the $4.6
billion U.S. calcium channel blocker market with a product profile comparable to
that of the market leader. Axid(R) competes in the $1.7 billion U.S.
H2-histamine blocker market for the treatment of gastroesophageal reflux disease
(GERD) and peptic ulcer. Reliant's sales and promotional revenue from these
products was $277 million in 2001.
Page 1 of 5
Reliant has three additional product candidates in development. Its drug
development efforts have focused primarily on the reformulation and improvement
of currently marketed compounds with proven safety and efficacy. Last month,
Reliant announced the acquisition of the North American rights to the antiviral
MIV-606, a new chemical entity developed by Sweden-based Medivir AB for the
treatment of herpes zoster. This product candidate is currently in Phase II
clinical trials.
"This merger is a major step in the execution of our strategy to become an
integrated pharmaceutical company," said Richard Pops, Alkermes CEO. "By adding
Reliant's highly experienced management team, its proven sales and marketing
infrastructure and exciting drug development pipeline, Alkermes continues its
evolution from a leading drug delivery company to a fast growing, integrated
pharmaceutical company well positioned to bring important therapeutic products
to patients and physicians."
Following completion of the merger, which is subject to the approval of
Alkermes' shareholders and the Reliant members, regulatory approval and other
customary closing conditions, the new company will be named Alkermes, Inc., with
headquarters remaining in Cambridge, Massachusetts. Reliant Pharmaceuticals will
become a wholly-owned subsidiary of Alkermes based in Liberty Corner, New
Jersey. Richard F. Pops will be the Chief Executive Officer of Alkermes. David
A. Broecker will continue in his role as President and Chief Operating Officer
of Alkermes and Joseph J. Krivulka, President and co-founder of Reliant, will
continue in his role as President of Reliant.
"Alkermes' people, technologies, product development experience and pipeline are
an excellent strategic fit for Reliant," commented Joe Krivulka, President and
co-founder of Reliant. "From inception, our goal has been to build a significant
pharmaceutical company by acquiring and developing innovative, patented ethical
pharmaceutical products and commercializing them through our marketing and sales
organization. With Alkermes, we accelerate our business plan by leveraging
advanced formulation technologies, product development and manufacturing
experience, new pipeline products and extensive collaborative relationships in
the pharmaceutical and biotechnology industries."
Page 2 of 5
Alkermes' seven member Board of Directors will be expanded to include four new
members: Fred Craves, Managing Director of Bay City Capital, LLC, Joe Krivulka,
President of Reliant, Mark Hoplamazian, Senior Vice President of The Pritzker
Organization, LLC and Tom Pritzker, Chairman of Hyatt Corporation and President
of The Pritzker Organization, LLC. Bay City Capital, LLC is a private merchant
bank focusing exclusively on the life sciences industry, including the
pharmaceutical, biomedical, diagnostic device, and nutrition and agribusiness
sectors. The Pritzker Organization, LLC provides merchant banking, advisory and
consulting services to the Pritzker family business interests. Bay City Capital,
LLC and the Pritzker family business interests are the majority owners of
Reliant.
"We are fully committed to working with the Alkermes team to build a new
organization that combines the strengths of Reliant's proven commercial
organization with Alkermes' novel products and technologies," stated Tom
Pritzker, a member of the Reliant Board. "We are dedicated to building long-term
value for Alkermes' shareholders and believe this merger is a key step toward
maximizing the value of both companies."
The combined entity will have an extensive portfolio of partnerships with
leading pharmaceutical and biotechnology companies, including Eli Lilly,
Genentech, GlaxoSmithKline, Johnson & Johnson, Novartis and Serono. These
partnerships will continue to play an integral role in the execution of the new
company's strategy, as the basis for the development of innovative, high value
product candidates, the funding and commercialization of new drug delivery
technologies and the establishment of additional collaborative relationships
with the potential to yield other business opportunities.
Reliant was founded in 1999, to market branded, patent protected, ethical
pharmaceutical products to primary care and targeted specialty physicians in the
U.S. Reliant currently markets three branded product lines: Lescol(R)
(fluvastatin sodium) and Lescol(R) XL, extended-release tablets, developed by
Novartis for cholesterol management; DynaCirc (isradipine) and DynaCirc CR(R),
an extended-release formulation, also developed by Novartis for the treatment of
hypertension; and Axid(R) (nizatidine) developed by Eli Lilly for the treatment
of GERD and peptic ulcers. Reliant develops and implements sophisticated life
cycle management strategies to extend marketing exclusivity or provide
additional patent protection for its products.
Page 3 of 5
Reliant is a privately-held company owned primarily by the Pritzker family
business interests, Bay City Capital, Alkermes, Inc., management and members of
its Board of Managers. Reliant manages a sales force of approximately 750 people
with 80 regional and district managers complemented by a 30-person national
accounts team. This selling effort is supported by nearly 100 marketing,
clinical, regulatory and support staff based at its headquarters in Liberty
Corner, New Jersey.
Alkermes is a leader in the development of products based on sophisticated drug
delivery technologies. It has several areas of focus, including (i) controlled,
sustained-release of injectable drugs lasting several days to several weeks,
using its ProLease(R) and Medisorb(R) technologies and (ii) the development of
pharmaceutical products based on its proprietary AIR(TM) pulmonary technology.
IN addition to its Cambridge, Massachusetts, headquarters, research and
manufacturing facilities, Alkermes operates research and manufacturing
facilities in Ohio and a medical affairs office in Cambridge, England.
ADDITIONAL INFORMATION
In connection with the proposed Alkermes/Reliant merger, a joint proxy
statement/prospectus will be filed with the Securities and Exchange Commission
(the "SEC"). INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE JOINT PROXY
STATEMENT/PROSPECTUS REGARDING THE PROPOSED MERGER WHEN IT BECOMES AVAILABLE,
BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. Investors may obtain a free copy
of the joint proxy statement/prospectus (when it is available) and other
documents filed by Alkermes with the SEC at the SEC's website at WWW.SEC.GOV.
The joint proxy statement/prospectus (when it is available) and these other
documents may also be obtained for free from Alkermes by calling Alkermes at
(617) 494-0171 and on the Alkermes website at WWW.ALKERMES.COM.
Alkermes and its directors, executive officers and certain other members of
management and employees may be soliciting proxies from its shareholders in
favor of the proposed merger. Information regarding the persons who may, under
the rules of the SEC, be considered to be participants in the solicitation of
Alkermes shareholders in connection with the proposed Alkermes/Reliant merger is
set forth in Alkermes' proxy statement for its annual 2001 meeting, dated June
22, 2001 and filed with the SEC on June 28, 2001. Additional information will be
set forth in the joint proxy statement/prospectus when it is filed with the SEC.
Page 4 or 5
Certain statements set forth above may constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
Although we believe that such statements are based on reasonable assumptions
within the bounds of our knowledge of our business and operations, there can be
no assurance that: (i) Alkermes and Reliant's businesses will be integrated
successfully or that planned synergies will be achieved; (ii) the market for the
sale of their products will develop as expected; (iii) development of their
product candidates will proceed as planned; (iv) Alkermes shareholders will
approve the merger or the other closing conditions will be satisfied; and (v)
prior to the closing of the proposed transaction, the businesses of the
companies will not suffer due to uncertainty or other factors.
The businesses of Alkermes and Reliant are subject to significant risks and
there can be no assurance that actual results of product development activities
and sales and marketing efforts, as well as their results of operations will not
differ materially from expectations. For information with respect to other
factors that could cause actual results to differ from expectations, reference
is made to the reports filed by Alkermes with the SEC under the Securities
Exchange Act of 1934, as amended.
Alkermes is hosting a live webcast at 9:00 a.m. Eastern time today, March 21,
2002. The webcast can be accessed by going to the Alkermes website at
WWW.ALKERMES.COM and clicking on the investor relations tab. The webcast will be
archived and available for replay through the close of business on Thursday,
March 28, 2001.
Contacts:
Rebecca Peterson Lawrence A. Gyenes
Director, Investor Relations Executive Vice President and Chief Financial Officer
Alkermes, Inc. Reliant Pharmaceuticals, LLC
(617) 583-6378 (908) 542-4402
Lisa Burns Justin Jackson
Burns McClellan Burns McClellan
(212) 213-0006 (212) 213-0006
###
********************************************************************************
CONFIDENTIAL
ALKERMES, INC.
ALKERMES/RELIANT MERGER
THURSDAY, MARCH 21, 2002
9:00 A.M. ET
Conference Call Phone Number: 1-888-XXX-XXXX
Chairperson of Call: Jim Frates
8:30 A.M. EST Please dial into 1-800-257-4607. The operator will make sure they
can hear all participants clearly and verify the title of the call, Rebecca's
name and title. The operator will stay on the line and give a countdown so the
participants know how much time is left before the call begins. The operator
will stay on for the duration of the call and will continuously monitor sound
quality.
8:59 P.M. Operator will ask ALKERMES if they are ready to begin the call.
If ALKERMES needs a few more minutes, the operator will tell the
callers to stand by.
When ALKERMES tells the operator to begin the call, the operator
will ask for 10 seconds of quiet while he or she connects all
callers and starts the tape.
The Operator will begin the call:
OPERATOR: "Ladies and gentleman, thank you for standing by. Welcome to the
Alkermes' Reliant merger conference call. During the presentation, all
participants are in a listen-only mode. Afterwards, we will conduct a question
and answer session. At that time, if you have a question, please press the 1
followed by the 4 on your telephone. As a reminder, this conference is being
recorded Thursday, March 21, 2002. I would now like to turn the conference over
to Mr. James Frates, Chief Financial Officer. Please go ahead sir."
JIM: Good morning everyone and welcome to Alkermes' conference call to
discuss our merger with Reliant Pharmaceuticals. I'm Jim Frates, CFO
of Alkermes and with me this morning is Richard Pops, our CEO, and Joe
Krivulka, the president of Reliant.
Some of the statements that we will make during this conference call
contain forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. While we believe that our
expectations in making these statements are reasonable, actual results
could differ materially from expectations as a result of a number of
factors, including, but not limited to: whether Alkermes and Reliant's
businesses will be integrated successfully or that the planned
synergies will be achieved; the sale of products will develop as
expected; whether the development of product candidates will proceed
as planned; whether Alkermes' shareholders will approve the merger or
the other closing conditions will be satisfied; prior to the closing
of the proposed transaction, whether the businesses of the companies
will suffer due to uncertainty or other factors; as well as other
factors discussed in our filings with the SEC, which we suggest you
review.
Now I'd like to turn the call over to Richard Pops.
RICHARD: Thanks, Jim. Good morning, everybody, and thank you for joining us on
short notice for this call.
This is an important and exciting day for us. We are just extremely
pleased to announce the merger of Alkermes and Reliant
Pharmaceuticals. The news is particularly exciting today because it
builds on a strategic alliance that we began several months ago, and
it accelerates a process that brings Alkermes into what we think is
going to be the most dynamic phase of the Company's evolution. We've
been doing this for 10 or 11 years and as I've said to you many times,
I feel like we're just getting going now. The transition now from
developing high value products for our partners primarily to
commercializing our own. From being a drug delivery company to
becoming a pharmaceutical company. And I think that this is the lynch
pin in that transition.
This deal came together by a natural affinity between the two
organizations and between the people involved on both sides. It is a
key milestone for both companies and, when it is complete, we will
have a growing, integrated, science-based pharmaceutical company
capable of acquiring, developing and marketing innovative, patented
pharmaceutical products.
So, before getting carried away with all that, let me back up and give
you a little background on Reliant:
As a private company, it is unfamiliar to many of you and you'll have
a chance, when we publish the S-4 and you come and do due diligence,
to get to know the rich asset base of this company.
Reliant was founded in September 1999 with a highly ambitious goal of
rapidly building the infrastructure necessary to market branded,
patent protected pharmaceutical products to primary care and targeted
specialty physicians in the U.S. The idea was to build a national
sales and marketing organization targeting the primary care physicians
from the get go.
With significant private equity backing, the company was extremely
successful in building a senior management team, fielding a national
marketing and sales force and acquiring marketing rights to some key
brands. Selection of these brands was key. The company was focused on
large market opportunity products where sophisticated life cycle
management tools could be applied to maximize the economic value of
the brand.
The Company currently markets the following products: Lescol and
Lescol XL, which are statins, DynaCirc and DynaCirc CR, which are
calcium channel blockers, and Axid, which is an H2 antagonist. In a
couple of minutes, I will ask Joe Krivulka, the President of Reliant,
to give you some more background on these specific products.
As you know, our relationship with Reliant began in December of last
year, when we made a $100 million equity investment in the company. We
were attracted to the people, the products and importantly the
capabilities of the organization, particularly as they might relate to
the identification and commercialization of products for our own
account. As you know, within Alkermes, we have been increasingly
dedicating significant resources to developing proprietary products
for our own account based on these drug delivery systems that we have
been developing. As we began to ramp towards the commercial market
place, the value of these types of organizations and the value of this
type of infrastructure became increasingly evident to people within
Alkermes.
Since December, we have been interacting extensively, and, along with
the features of the company that motivated the original $100M
transaction, in a fairly rapid series of events, a number of positive
developments occurred that influenced our decision to expand our
relationship now.
Some of the key things were as follows. One was that the company
purchased one of their key products, DynaCirc and DynaCirc CR outright
from Novartis. The company owns these products and has relieved its
obligation for ongoing payments back to Novartis. Next, the major
driver of growth within the company is the Lescol brand. The Lescol
marketing agreement with Novartis was renegotiated, which enabled more
favorable revenue recognition for Reliant, much more congruent with
what we would want to do with a public company with a growing product.
Because of the continuing progress in sales of both Lescol and
DynaCirc, in February the company began the process of converting its
sales force, originally organized on a contract basis, into full time
Reliant employees, which we expect to be completed in April.
The company then did a very clever transaction and expanded its
development pipeline through the acquisition of MIV-606 from Medivir,
a Swedish-based company. And, just within the past several weeks, an
unexpected occurred: important positive outcomes data from a large
randomized, placebo controlled four year study of Lescol in patients
post angioplasty or bypass were obtained. This is from a study called
the LIP study; neither Reliant nor we were aware of the outcome until
a few weeks ago. These data showed a significant reduction in the risk
of heart attack and other complications from patients on Lescol and
they add to a growing body of evidence that Lescol has the potential
to play an important role in the statin market, which all of you know
is an enormous market. These data were presented yesterday at the ACC
meetings that many of you attended in Atlanta.
As we began to work together, we began to realize the potential
synergies we could gain and we began to focus on the potential of
bringing the two companies together. I am extremely pleased with where
we ended up.
So here is the idea:
If you look at our business, the most valuable companies in the
biopharmaceutical industry combine world-class science with
proprietary products that they market and sell themselves. If you look
at the top tier companies this is a common feature. Through the
Reliant merger, Alkermes joins that elite group.
We are building a company that can identify, develop and commercialize
innovative pharmaceutical products. For our own account, and in
collaboration with strong partners.
We have three key competitive advantages in identifying and acquiring
new products:
First, our formulation science. Because we have world-class experience
in new formulation development and proprietary technologies of our
own, we can identify opportunities to create proprietary dosage forms
with
improved medical and commercial potential. What is the evidence of
this? Risperdal Consta; Nutropin Depot; Pulmonary insulin; Lescol XL;
DynaCirc CR. These are where the two companies are absolutely
congruent in their approach to new product development.
Second, separate from the technical attributes of the company, because
we will have a large marketing and sales organization targeting the
primary care physician, we are able to in-license or co-promote
products that companies with more limited commercialization
infrastructure cannot pursue. That is an important differentiating
feature in the market place.
Third, because we collaborate intensively with pharmaceutical and
biotechnology company partners, we have access or proximity to
business opportunities that leverage these collaborations.
The new company will unite our clear strengths in advanced
formulations and drug delivery, product development and manufacturing,
and our pipeline of proprietary and partnered product candidates with
Reliant's five marketed products, pipeline, excellent sales and
marketing infrastructure and proven management team. Supporting a
broad range of development, manufacturing and commercialization
efforts, the combined entity will have over 1,400 people in its
facilities in the U.S. and abroad. Assuming the successful launch of
Risperdal Consta, the continuing
growth of the Lescol and DynaCirc brands and the continued progress in
other programs, we expect to report revenues on the order of $400
million in 2004. As you can see, the numbers are beginning to grow in
a very significant way.
This merger creates some unique opportunities for Alkermes. First, we
have accelerated our forward integration into a large-scale,
functional commercial enterprise. With the addition of this commercial
capability, we have access both to the large primary care audience, as
well as the infrastructure from which we can deploy specialty sales
forces. This is particularly significant as certain of our Alkermes
proprietary product candidates progress in clinical trials and
approach the marketplace. Conceptually, we have the commercial
infrastructure now to hang other specialty forces on as we develop
products.
Beyond the strong marketing and sales infrastructure, Reliant brings
to us expertise in the reformulation and improvement of currently
marketed compounds through the use of oral drug delivery technologies.
Their experience in oral sustained release and oral circadian rhythm
formulations combined with our ProLease and Medisorb sustained release
systems and our AIR pulmonary drug delivery system creates a nice
portfolio of drug delivery technologies and expertise available to us.
With this agreement, we have greatly increased our potential to
develop
proprietary products and enter into licensing agreements with both big
pharmaceutical companies and smaller biotech companies.
Reliant will function as a wholly owned subsidiary of Alkermes and
will continue to operate and grow from its current corporate space in
New Jersey. We are extremely pleased that heading that operation will
be Joe Krivulka, Co-founder of Reliant who will continue his duties as
president of Reliant. Joe is an exceptional guy. He has tremendous
amount of large pharma company experience combined with a strong
entrepreneurial drive. He has been instrumental in building Reliant
and we are fortunate to have him join the management team. Beyond Joe,
the senior management team is equally impressive, with track records
mainly from large pharmaceutical companies. The depth, breadth,
experience and drive of this combined management group, between the
Alkermes and Reliant people, is exceptional, and we look forward to
bringing this group together.
Another benefit of this transaction is our ability to leverage
Reliant's strong relationship with the Pritzker family, who along with
Bay City Capital, are Reliant's co-founders and largest shareholders.
Effectively, as this transaction evolved, it became less of a mutual
due diligence session, and more of a decision that the Pritzker family
and the Pritzker family business interests and
Bay City Capital were making an extremely large investment in
Alkermes. And the structure of the transaction reflects that.
The Pritzker family is known for its diverse business holdings, which
include Hyatt hotels and dozens of industrial companies. Tom Pritzker,
Chairman of Hyatt Corporation and The Pritzker Organization, will join
our Board following the completion of the merger, along with Mark
Hoplamazian, who heads up merchant banking for the Pritzkers, Fred
Craves from Bay City Capital and Joe Krivulka, will join the Board as
well. Our Board of 7 will expand to a Board of 11 with 4 participants
from the Reliant side.
We have gotten to know this group over the last several months, we
have interacted and negotiated intensively. They are a superb group of
businesspeople, they bring a long-term view and great strengths to
this company. We really view this as a partnership going forward, and
look forward to working together at the Board level.
Now I'd like to turn the call over to Joe, the co-founder and
President of Reliant.
JOE K: Thanks Rich. Let me begin by saying how pleased and excited I am that
we at Reliant are joining forces with the Alkermes team. We have been
working with each other for the last few months and we see tremendous
value in this company going forward, especially with our help and the
relationships that they have today.
From the beginning, Reliant's mission has been to build a fully
integrated major pharmaceutical company; and Rich, as of today, I
think we have done that.
This merger reinforces this mission, and helps us complete it. It
allows us to pursue our goals with even more resources and
capabilities.
Let me give you a quick overview of the products we are currently
promoting, and give you a sense of our current activities and the
scale at which we are operating:
First is Lescol and Lescol XL.
Lescol(R) XL is an extended-release tablet in the statin class used
for cholesterol management, one of the most important and growing
pharmaceutical markets today. Last year, that market place was $11
billion in the U.S. alone and it continues to grow at a pretty good
clip. Lescol was developed originally by Novartis and provides
effective treatment with a best-in-class safety profile. Lescol XL was
launched last year. It is the only extended release statin on the
market today and it provides superior efficacy and safety to the
immediate release Lescol
product and puts it into the ball park with our competitors. That
leverages the safety and efficacy profile. This is due to the improved
pharmacokinetic characteristics of Lescol XL.
DynaCirc (isradipine) and DynaCirc CR(R), our extended-release
formulation, are calcium channel blockers used in the treatment of
hypertension or blood pressure lowering. These products have excellent
product profiles and are positioned favorably versus the market
leader. The U.S. market for calcium channel blockers is over $4
billion.
Rounding out the list of products is Axid(R) (nizatidine) developed by
Eli Lilly & Company for the treatment of peptic ulcers and GERD or
gastroesophogeal reflux disease. Axid, is an H2 histamine blocker and
is currently the only brand promoted in the U.S. for GERD. The market
place is about $1.7 billion in the U.S.
In total, sales by Reliant of these five products were greater than
$460 million in 2001. It is important to note that Reliant does not
recognize all of these sales as revenue on its P&L nor will we. Each
of these agreements is different, and Jim will give you more precise
guidance as to how you should model them on a going forward basis.
That figure of $460 million is important because it is indicative of
the sales volume that this organization is currently handling.
Just last month, Reliant expanded its focus beyond just the
reformulation and started its focus on becoming a fully
integrated company. We did this by acquiring a New Chemical
Entity, MIV-606, which is an antiviral compound for the potential
treatment of herpes zoster. This product was developed by a
Sweden-based company called MEDIVIR AB. MIV-606 is a new chemical
entity that we believe holds significant promise in the future.
On the operations side, the company currently manages a 750
person sales force and all these will be Reliant employees as of
April 1. With 80 regional and district managers and another 20
national account sales team, this selling effort is supported by
nearly 100 marketing, clinical, regulatory and support staff
based at its headquarters in Liberty Corner, New Jersey.
I would like to turn it back over to Jim now, but before I do
that, I want to tell you how excited we all are about this new
opportunity.
JIM FRATES: Thanks Joe.
We are very excited about the financial opportunity we see with
Reliant. We feel Reliant is poised to take advantage of the
substantial investment it has made in building its business. Like
Alkermes, we expect Reliant to be profitable in 2004 and beyond.
This profile allows Alkermes to continue
our strategy of investing in our pipeline in 2002 and 2003 while
strongly reinforcing our target of profitability in CY 2004.
Now for some more specific guidance.
In CY 2001 Reliant reported revenues from product sales and
promotional activity of $277 MM, and reported an EBITDA loss of ($153
MM) and pretax loss of ($198 MM). During CY 2001 Reliant launched two
of their key products, Lescol XL and DynaCirc CR and completed the
build out of its primary care sales force.
For CY 2002 we expect Reliant's EBITDA to be in the range of a loss of
($110 MM) to ($115 MM) loss and we expect the cash burn for the year
to decline to approximately $100 MM.
Reliant began the year with over $110 MM in cash and available credit
lines. Alkermes began the year with $208 MM on our balance sheet. On a
stand alone basis Reliant planned that their cash and credit lines
would take them to break even and we believe that we have the
resources to take the new Alkermes to profitability, which we
anticipate in calendar 2004. Over the last several years we have
articulated our strategy of investing in higher value products in the
near term as we prepare for the launch of Rispedal Consta and our
first proprietary products. We feel Reliant's
business model and products enhance this strategy and our models show
the deal to be accretive to Alkermes' shareholders in 2004 and beyond.
R. Pops: Thank you Jim. This is an exciting day for all of us here. We are on
our way to building what we believe is one of the most exciting young
companies in this business.
With that, I would be happy to answer your questions. Operator can we
please take the first question.
OPERATOR: "Ladies and gentlemen, if you would like to register for a question,
please press the 1 followed by the 4 on your telephone. You will hear a
three-tone prompt to acknowledge your request. If your question has been
answered, and you would like to withdraw your registration, press the 1 followed
by the 3. If you are using a speakerphone, please pick up the hand set before
entering your request. One moment please for the first question. Our first
question comes from..."
The operator will introduce each question:
OPERATOR: "Mr. Doe, from XYZ securities, please go ahead."
NOTE: ALKERMES needs to keep track of time, and cue the operator that you
would like to conclude the call by saying, "We have time for
five/two/one more question."
Please cue the operator when your conversation with each caller has ended so
that the operator can connect the next caller to ask a question. (i.e. "Next
question...") Also, if you need to review documents in order to prepare your
answer to a question, please let callers know by saying, "One moment please" to
avoid silence.
When there are no more questions, the operator will say, "If there are any
additional questions, please press the one followed by the three at this time".
After all questions, the operator will say, "Ms. Peterson, there are no further
questions at this time. Please continue."
RICH: That concludes today's conference call. Thank you all for participating.
OPERATOR: "Ladies and Gentlemen, that does conclude our conference for today,
thank you for participating."
OPERATOR: "Ladies and Gentlemen, that does conclude our conference for today,
thank you for participating."