Form 8-K PERNIX THERAPEUTICS HOLD For: Apr 23
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E-mailUNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): April 23, 2015
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PERNIX THERAPEUTICS HOLDINGS, INC.
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(Exact name of registrant as specified in its charter)
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Maryland
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001-14494
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33-0724736
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(state or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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10 North Park Place, Suite 201, Morristown, NJ
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07960
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code: (800) 793-2145
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(Former Name or Former Address, if Changed Since Last Report.)
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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 (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o 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 April 23, 2015, Pernix Ireland Limited (“Pernix Ireland”), a wholly-owned subsidiary of Pernix Therapeutics Holdings, Inc. (the “Company”), Zogenix, Inc. (“Zogenix”) and the Company entered into an amendment (the “APA Amendment”) to the previously announced asset purchase agreement, dated as of March 10, 2015 (as amended, the “Asset Purchase Agreement”), by and among Pernix Ireland, Zogenix and the Company, as guarantor, pursuant to which the composition of the purchase price was amended to increase the portion payable in cash from $30 million to $80 million in lieu of issuing the initially contemplated $50 million secured promissory note from Pernix Ireland. Total consideration at payable upon the closing of the transaction (the “Closing”) remained unchanged at $100 million, consisting of (a) 1,682,086 shares of the Company’s common stock with an approximate value of $20 million based on the $11.89 per share closing price of the Company’s common stock on March 9, 2015, the trading day immediately preceding the execution date of the Asset Purchase Agreement; and (b) $80 million in cash, $10 million of which would be deposited into escrow to fund potential indemnification claims for a period of twelve (12) months following the Closing. In addition, the APA Amendment granted Pernix Ireland a right to appoint a wholly-owned subsidiary of the Company as a substitute purchaser to assume Pernix Ireland’s rights and obligations under the Asset Purchase Agreement. On April 23, 2015, Pernix Ireland exercised such right and appointed Ferrimill Limited (“Ferrimill”), an Irish corporation and another wholly-owned subsidiary of the Company, as the substitute purchaser.
The foregoing description does not purport to be complete and is qualified in its entirety by reference to the Asset Purchase Agreement and the APA Amendment, copies of which the Company expects to file with the Company’s applicable Quarterly Report on Form 10-Q.
Item 2.01 Completion of Acquisition or Disposition of Assets.
On April 24, 2015 (the “Closing Date”), the Company, through Ferrimill, completed its previously announced acquisition of the Zohydro® ER (hydrocodone bitartrate) franchise from Zogenix, comprising three extended release hydrocodone products, including an abuse-deterrent pipeline and all related intellectual property, pursuant to the terms of the Asset Purchase Agreement. Pursuant to the Asset Purchase Agreement, on the Closing Date Ferrimill (a) paid Zogenix $70 million in cash; (b) transferred 1,682,086 shares of Company common stock (with an approximate value of $20 million based on the $11.89 per share closing price of Pernix Therapeutics’ common stock on March 9, 2015, the trading day immediately preceding the execution date of the Asset Purchase Agreement) to Zogenix (the “Stock Consideration”); and (c) deposited an additional $10 million in escrow to fund potential indemnification claims for a period of 12 months following the Closing Date.
As previously announced, in addition to the consideration paid at Closing, Zogenix is eligible to receive additional cash payments of up to $283.5 million based on the achievement of pre-determined milestones, including a $12.5 million payment upon approval by the U.S. Food and Drug Administration of a third generation product currently in development in collaboration with Altus Formulation Inc. and up to $271 million in potential sales milestones. Under the terms of the Asset Purchase Agreement, over 80% of the value of the sales milestones is tied to the achievement of net sales targets ranging from $500 million to $1 billion, and Ferrimill has agreed to use Commercially Reasonable Efforts (as defined in the Asset Purchase Agreement) to meet such milestones. Following the Closing Date, Ferrimill will assume responsibility for Zogenix’s obligations under the purchased contracts and regulatory approvals, as well as other liabilities associated with the Zohydro ER business arising after the Closing Date, and Zogenix will retain all liabilities associated with the Zohydro ER business arising prior to the Closing Date. Zogenix, in addition to agreeing to indemnification provisions customary for transactions of this nature, has also agreed to indemnify Ferrimill for certain intellectual property matters up to an aggregate amount of $5 million.
The information set forth under Item 1.01 above is incorporated into this Item 2.01 by reference.
Item 7.01 Regulation FD Disclosure.
On April 24, 2015, the Company issued a press release announcing it had completed its previously announced acquisition of the Zohydro® ER (hydrocodone bitartrate) franchise from Zogenix. A copy of the press release is furnished as Exhibit 99.1 and is incorporated herein by reference.
In accordance with General Instruction B.2 of Form 8-K, the information in this Item 7.01, including Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits
(a) Financial Statements of Business Acquired.
The financial statements required by Item 9.01(a) of Form 8-K will be filed by amendment no later than 71 calendar days after the date this Current Report on Form 8-K is required to be filed.
(b) Pro Forma Financial Information.
The pro forma financial information required by Item 9.01(b) of Form 8-K will be filed by amendment no later than 71 calendar days after the date this Current Report on Form 8-K is required to be filed.
(d) Exhibits.
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Exhibit No.
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Description
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Press Release, dated April 24, 2015.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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PERNIX THERAPEUTICS HOLDINGS, INC.
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Date: April 29, 2015
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By:
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/s/ Sanjay S. Patel | |
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Name: Sanjay S. Patel
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Title: Chief Financial Officer
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EXHIBIT INDEX
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Exhibit No.
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Description
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Press Release, dated April 24, 2015.
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Forward-Looking Statements
The Company cautions you that statements included in this Current Report on Form 8-K that are not a description of historical facts are forward-looking statements. Words such as “believes,” “anticipates,” “plans,” “expects,” “indicates,” “will,” “intends,” “potential,” “suggests,” “assuming,” “designed” and similar expressions are intended to identify forward-looking statements. These statements are based on the Company’s current beliefs and expectations. The inclusion of forward-looking statements should not be regarded as a representation by the Company that any of its plans will be achieved. Actual results may differ from those set forth in this Current Report on Form 8-K due to the risk and uncertainties inherent in the Company’s business, including, without limitation: the Company’s success in hiring the Zogenix employees and ability to manage such employees; the Company’s ability to successfully integrate the Zohydro ER business into its operations and realize the anticipated benefits of this acquisition; potential litigation costs that may arise in connection with the Zohydro ER business; and other risks detailed in the Company’s public periodic filings with the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and the Company undertakes no obligation to revise or update this report to reflect events or circumstances after the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement. This caution is made under the safe harbor provisions of Section 21E of the Private Securities Litigation Reform Act of 1995.
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Exhibit 99.1
Pernix Therapeutics Closes Acquisition of Zohydro ER Franchise
- Synergistic Fit Expands Commercial Footprint, Builds Strong Product Portfolio -
MORRISTOWN, N.J. -- April 24, 2015 -- Pernix Therapeutics Holdings, Inc. (Nasdaq: PTX) (the "Company" or “Pernix”), a specialty pharmaceutical company, announced today that it has closed its acquisition of the Zohydro® ER (hydrocodone bitartrate) franchise, comprising three extended release hydrocodone products, including an abuse-deterrent pipeline and all related intellectual property. Pernix first announced the agreement with Zogenix, Inc. to acquire this franchise on March 10th.
“The Zohydro ER franchise is an excellent strategic fit with our focus on central nervous system disorders. These products address an extremely large and underserved market, affording us a significant opportunity for growth, both organically and through life cycle management,” stated Doug Drysdale, Chairman and Chief Executive Officer of Pernix.
“We look forward to launching Zohydro ER with BeadTek™ in May and advancing ZX-007, an innovative abuse-deterrent tablet formulation of hydrocodone ER, with the goal of submitting an NDA for this third-generation product mid-2016. We are also pleased to welcome the Zohydro ER sales team from Zogenix and certain other employees to Pernix. The new Pernix Pain Management Team will double our commercial footprint. Pernix today has three strategically promoted brands, each in large markets, with significant growth potential. Through a combination of sales execution and future acquisitions, we will look to strengthen our position as a leading player in the opioid pain market and build long-term value for our shareholders.” Drysdale concluded.
A transition to Zohydro ER with BeadTek is in process with the goal of no disruption to patients’ therapy, and all previous dosage strengths will be available in this new formulation. The original formulation will no longer be manufactured after May 4, 2015.
Terms of the agreement
Under terms of the agreement (as amended), Pernix, through its wholly-owned subsidiary, Ferrimill Limited (“Ferrimill”), has paid Zogenix $70 million in cash, issued to Zogenix 1,682,086 shares of Pernix common stock and deposited an additional $10 million in cash in escrow to fund potential indemnification claims for a period of 12 months following the closing. Pernix has also purchased certain Zohydro ER inventory as part of the transaction.
Ferrimill has also agreed to make certain payments conditioned on regulatory and commercial milestones of up to $283.5 million, including $12.5 million upon approval of ZX-007, a tablet formulation of extended-release hydrocodone with abuse-deterrent properties, and up to $271 million in potential sales milestones based on the achievement of pre-determined annual product sales milestones for Zohydro ER and ZX-007. Under the terms of the acquisition agreement, over 80% of the value of the sales milestones is tied to the achievement of net sales targets ranging from $500 million to $1 billion.
Pernix will purchase a pre-defined amount of Zohydro ER product inventory. Pernix will also seek to retain certain employees of Zogenix, including the field sales force of approximately 100 sales professionals and additional personnel related to the brand.
Jefferies LLC acted as financial advisor to Pernix. The Company’s legal advisers are Lowenstein Sandler LLP and Goodwin Procter LLP. Buchanan Ingersoll & Rooney PC acted as intellectual property counsel.
About Zohydro ER with BeadTek
Zohydro ER with BeadTek is an extended-release form of hydrocodone indicated for the management of pain severe enough to require daily, around-the-clock, long-term opioid treatment and for which alternative treatment options are inadequate. Zohydro ER with BeadTek does not contain acetaminophen, unlike many immediate-release hydrocodone products, such as Vicodin and Lortab, reducing the risk for potential liver toxicity due to overexposure of acetaminophen. The active ingredient, hydrocodone, is the most commonly prescribed opioid in the U.S., with over 114 million prescriptions in 2014. Zohydro ER with BeadTek is an opioid agonist, extended-release, oral formulation of hydrocodone bitartrate containing technology that contains an inactive ingredient that immediately forms a viscous gel when crushed and dissolved in liquids or solvents.
About BeadTek™
BeadTek was developed using safe, well-known excipients and proprietary manufacturing processes to create an inactive ingredient that immediately forms a viscous gel when crushed and dissolved in liquids or solvents. All of the beads within the medication capsule are indistinguishable in color, shape, density and size, and do not impact the drug release profile when taken as directed.
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LIMITATIONS OF USE
Because of the risks of addiction, abuse, and misuse with opioids, even at recommended doses, and because of the greater risks of overdose and death with extended-release opioid formulations, reserve Zohydro ER for use in patients for whom alternative treatment options (e.g., non-opioid analgesics or immediate-release opioids) are ineffective, not tolerated, or would be otherwise inadequate to provide sufficient management of pain.
Zohydro ER is not indicated as an as needed (prn) analgesic.
Please see the Zohydro ER full prescribing information for the complete boxed warning and safety information.
WARNING: ADDICTION, ABUSE, AND MISUSE; LIFE-THREATENING RESPIRATORY DEPRESSION; ACCIDENTAL INGESTION; NEONATAL OPIOID WITHDRAWAL SYNDROME; INTERACTION WITH ALCOHOL; and CYTOCHROME P450 3A4 INTERACTION
See full prescribing information for complete boxed warning.
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ZOHYDRO ER exposes users to risks of addiction, abuse, and misuse, which can lead to overdose and death. Assess each patient’s risk before prescribing, and monitor regularly for development of these behaviors or conditions.
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Serious, life-threatening, or fatal respiratory depression may occur. Monitor closely, especially upon initiation or following a dose increase. Instruct patients to swallow ZOHYDRO ER whole to avoid exposure to a potentially fatal dose of hydrocodone.
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Accidental ingestion of ZOHYDRO ER, especially in children, can result in a fatal overdose of hydrocodone.
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Prolonged use of ZOHYDRO ER during pregnancy can result in neonatal opioid withdrawal syndrome, which may be life-threatening if not recognized and treated. If opioid use is required for a prolonged period in a pregnant woman, advise the patient of the risk of neonatal opioid withdrawal syndrome and ensure that appropriate treatment will be available.
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Instruct patients not to consume alcohol or any products containing alcohol while taking ZOHYDRO ER because co-ingestion can result in fatal plasma hydrocodone levels.
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Initiation of CYP3A4 inhibitors (or discontinuation of CYP3A4 inducers) can result in a fatal overdose of hydrocodone from ZOHYDRO ER.
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IMPORTANT SAFETY INFORMATION
Zohydro ER is contraindicated in patients with significant respiratory depression, acute or severe bronchial asthma, known or suspected paralytic ileus, and hypersensitivity to hydrocodone bitartrate.
Zohydro ER has warnings for: interactions with CNS depressants; elderly, cachectic, debilitated patients, and those with chronic pulmonary disease; hypotensive effects; patients with head injury or increased intracranial pressure; and concomitant use of CYP3A4 may increase opioid effects. Please see full prescribing information for the complete warning information.
Potential serious adverse events caused by opioids include addiction, abuse, and misuse; life-threatening respiratory depression; neonatal opioid withdrawal syndrome; interactions with other CNS depressants; hypotensive effects; gastrointestinal conditions, and seizures. The most common adverse reactions associated with Zohydro ER (≥2%) include constipation, nausea, somnolence, fatigue, headache, dizziness, dry mouth, vomiting, pruritus, abdominal pain, peripheral edema, upper respiratory tract infection, muscle spasms, urinary tract infection, back pain, and tremor. With intravenous abuse, the inactive ingredients in Zohydro ER can result in death, local tissue necrosis, infection, pulmonary granulomas, and increased risk of endocarditis and valvular heart injury. Parenteral drug abuse is commonly associated with transmission of infectious diseases such as hepatitis and HIV.
Zohydro® ER is a registered trademark of Zogenix, Inc.
About Pernix Therapeutics
Pernix Therapeutics is a specialty pharmaceutical business with a focus on acquiring, developing and commercializing prescription drugs primarily for the U.S. market. The Company targets underserved therapeutic areas such as CNS, including neurology and psychiatry, and has an interest in expanding into additional specialty segments.
To learn more about Pernix Therapeutics, visit www.pernixtx.com.
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Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements including words such as “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “target” or similar expressions are forward-looking statements. Because these statements reflect the Company’s current views, expectations and beliefs concerning future events, these forward-looking statements involve risks and uncertainties. As a result, actual results may differ from those set forth in this press release due to the risk and uncertainties inherent in the Company’s business, including, without limitation: the Company’s success in hiring the Zogenix employees and ability to manage such employees; the Company’s ability to successfully integrate the Zohydro ER business into its operations and realize the anticipated benefits of this acquisition; potential litigation costs that may arise in connection with the Zohydro ER business; and other risks described in greater detail under the caption “Risk Factors” in our Form 10-K, Form 10-Q and Form 8-K filings with the Securities and Exchange Commission and as otherwise enumerated herein or therein. The forward-looking statements in this press release are qualified by these risk factors. The Company assumes no obligation to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise.
Pernix Therapeutics Holdings, Inc.
Investor Relations
Lisa Wilson, 212-452-2793
In-Site Communications
Media Relations
Marianne Lambertson, (800) 793-2145 ext. 1012
Vice President, Marketing and Corporate Communications
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