Johnson & Johnson Announces Definitive Agreement to Acquire Conor Medsystems, Inc.
November 16 2006 - 7:43PM
PR Newswire (US)
Conor Medsystems to Complement Cordis' Drug-Eluting Stent
Capabilities With Unique Controlled Drug Delivery Technology NEW
BRUNSWICK, N.J. and MENLO PARK, Calif., Nov. 16
/PRNewswire-FirstCall/ -- Johnson & Johnson (NYSE:JNJ) and
Conor Medsystems, Inc. (NASDAQ:CONR), a cardiovascular device
company, today announced a definitive agreement whereby Johnson
& Johnson will acquire Conor Medsystems for approximately $1.4
billion. The acquisition of Conor Medsystems by Johnson &
Johnson will provide Cordis Corporation, a Johnson & Johnson
company, with a unique controlled drug delivery technology. This
technology is currently employed on the CoStar(R) Stent System, a
paclitaxel-eluting cobalt chromium stent with a bioabsorbable
polymer. The CoStar(R) Stent is currently sold outside the United
States, and enrollment in its U.S. pivotal clinical trial has been
completed. Under the terms of the agreement, an all cash merger
transaction, Conor Medsystems' stockholders will receive at closing
$33.50 for each outstanding Conor Medsystems share. The $1.3
billion estimated net value of the transaction is based on Conor
Medsystem's 42.7 million fully diluted shares outstanding, net of
estimated cash on hand at time of closing. The boards of directors
of Johnson & Johnson and Conor Medsystems have approved the
transaction, which is subject to clearance under the
Hart-Scott-Rodino Antitrust Improvements Act, Conor Medsystems
stockholder approval and other customary closing conditions. The
transaction is expected to close in the first quarter of 2007.
Nicholas J. Valeriani, Johnson & Johnson Worldwide Chairman,
Cardiovascular Devices and Diagnostics, said, "The addition of
Conor Medsystems to the Johnson & Johnson Family of Companies
reaffirms our strong commitment to patients with cardiovascular
disease and the physicians who treat them." He continued, "Cordis
led the transformation of the treatment of coronary artery disease
with the introduction of the first coronary stent, and later
reinvented the category with the creation of the CYPHER(R)
Sirolimus-Eluting Stent*. With Conor Medsystems, we are positioned
to lead the development of next generation technologies aimed at
advancing the standard of care in the treatment of coronary artery
disease." Conor Medsystems' CoStar(R) Stent, which provides for
drug elution from a stent with a fully bioabsorbable polymer,
employs a unique reservoir drug-delivery technology. These
reservoirs enable site-specific drug delivery as well as the
potential for delivery of multiple therapeutic agents that may be
useful in the treatment of cardiovascular, peripheral vascular and
neurovascular diseases. The technology also has potential in other
non-vascular clinical indications. Conor Medsystems will operate as
part of the Cordis franchise, the global leader in drug-eluting
stents for the treatment of coronary artery disease. Rick Anderson,
Johnson & Johnson Company Group Chairman with responsibility
for the Cordis business, said: "Cordis is looking forward to
strengthening its portfolio with the addition of the CoStar(R)
Stent System. We will offer physicians and the patients they treat
the most comprehensive portfolio of stents, therapeutic agents,
delivery platforms and polymers. By combining the unique
capabilities of Conor Medsystems and Cordis, we are confident that
we will bring innovative solutions to patients around the world."
Conor Medsystems Chairman and Chief Executive Officer Frank
Litvack, M.D., said: "This transaction couples our highly
competitive technology platform with the resources of the world's
leading health care company. We believe it is clearly in the best
interest of Conor Medsystems' stockholders and of patients
worldwide who seek treatment for vascular disease. Cordis, which
created the drug-eluting stent category, is the ideal partner to
maximize the potential of our strong technology portfolio, and to
accelerate the adoption of this important technology." Upon
closing, Johnson & Johnson is expected to incur an estimated
one-time after-tax charge of approximately $600 million, reflecting
the write-off of in-process research and development charges
(IPR&D). Excluding IPR&D, the acquisition is expected to be
modestly dilutive to Johnson & Johnson's earnings per share in
2007. Additional commentary regarding the financial impact will be
discussed during the conference call noted below. Johnson &
Johnson is the world's most comprehensive and broadly based
manufacturer of health care products, as well as a provider of
related services, for the consumer, pharmaceutical, and medical
devices and diagnostics markets. The more than 230 Johnson &
Johnson operating companies employ approximately 115,700 men and
women in 57 countries and sell products throughout the world. Conor
Medsystems develops innovative controlled vascular drug delivery
technologies, and has primarily focused on the development of drug-
eluting stents to treat coronary artery disease. For further
information on Conor Medsystems and controlled vascular delivery,
visit http://www.conormed.com/. The CoStar(R) Stent is not
available for sale in the United States where it is an
investigational device limited by law to investigational use. NOTE
TO INVESTORS Johnson & Johnson and Conor Medsystems, Inc. will
conduct a conference call with financial analysts to discuss this
news release on November 17, 2006, at 8:30 a.m., Eastern Standard
Time. A simultaneous webcast of the call for interested investors
and others may be accessed by visiting the Johnson & Johnson
website at http://www.jnj.com/ and clicking on
"Webcasts/Presentations" in the Investor Relations section or by
visiting the Conor Medsystems website at http://www.conormed.com/
and clicking on "Webcasts" in the Company section. (This press
release contains "forward-looking statements" as defined in the
Private Securities Litigation Reform Act of 1995. These statements
are based on current expectations of future events. If underlying
assumptions prove inaccurate or unknown risks or uncertainties
materialize, actual results could vary materially from Johnson
& Johnson's and Conor Medsystems' expectations and projections.
Risks and uncertainties include satisfaction of closing conditions
including receipt of regulatory approvals for the transaction, and
the possibility that the transaction will not be completed; general
industry conditions and competition; economic conditions, such as
interest rate and currency exchange rate fluctuations;
technological advances and patents attained by competitors;
challenges inherent in new product development, including obtaining
regulatory approvals; domestic and foreign health care reforms and
governmental laws and regulations; and trends toward health care
cost containment. A further list and description of these risks,
uncertainties and other factors can be found in Exhibit 99 of
Johnson & Johnson's Annual Report on Form 10-K for the fiscal
year ended January 1, 2006 and Conor Medsystems' Quarterly Report
on Form 10-Q for the quarter ended September 30, 2006. These
filings, as well as subsequent filings, are available online at
http://www.sec.gov/ or on request from the applicable company.
Neither company undertakes to update any forward-looking statements
as a result of new information or future events or developments.)
Additional Information About the Proposed Transaction and Where To
Find It In connection with the proposed transaction, Conor
Medsystems intends to file a proxy statement and other relevant
materials with the Securities and Exchange Commission (the "SEC").
Before making any voting decision with respect to the proposed
transaction, stockholders of Conor Medsystems are urged to read the
proxy statement and other relevant materials because they will
contain important information about the proposed transaction. The
proxy statement and other relevant materials, and any other
documents filed by Conor Medsystems with the SEC, may be obtained
free of charge at the SEC's website at http://www.sec.gov/. In
addition, stockholders of Conor Medsystems may obtain free copies
of the documents filed with the SEC by contacting Conor Medsystems
at (650) 614-4100, or Conor Medsystems, Inc., 1003 Hamilton Court,
Menlo Park, CA 94025. You may also read and copy any reports,
statements, and other information filed by Conor Medsystems with
the SEC at the SEC public reference room at 100 F Street, NE, Room
1580, Washington, DC 20049. Please call the SEC at 1-800-SEC-0330
or visit the SEC's website for further information on its public
reference room. Conor Medsystems and Johnson & Johnson and each
of their executive officers and directors may be deemed to be
participants in the solicitation of proxies from Conor Medsystems'
stockholders in favor of the proposed transaction. A list of the
names of Conor Medsystems' executive officers and directors and a
description of their respective interests in Conor Medsystems, are
set forth in the proxy statement for Conor Medsystems' 2006 Annual
Meeting of Stockholders, which was filed with the SEC on April 28,
2006, and in any documents subsequently filed by its directors and
executive officers under the Securities and Exchange Act of 1934,
as amended. Certain executive officers and directors of Conor
Medsystems have interests in the proposed transaction that may
differ from the interests of stockholders generally, including
benefits conferred under retention, severance and change in control
arrangements and continuation of director and officer insurance and
indemnification. These interests and any additional benefits in
connection with the proposed transaction will be described in the
proxy statement when it becomes available. * Cordis Corporation has
entered into an exclusive worldwide license with Wyeth for the
localized delivery of sirolimus in certain fields of use, including
delivery via vascular stenting. Sirolimus, the active drug released
for the stent, is marketed by Wyeth Pharmaceuticals, a division of
Wyeth, under the name Rapamune(R). Rapamune is a trademark of Wyeth
Pharmaceuticals. DATASOURCE: Johnson & Johnson CONTACT: Media,
Jeffrey J. Leebaw, +1-732-524-3350, or Investor, Stan Panasewicz,
+1-732-524-2524, both of Johnson & Johnson; or Michael
Boennighausen of Conor Medsystems, Inc., +1-650-614-4100; or Lesley
Fishman, +1-732-524-3922, for Johnson & Johnson Web site:
http://www.jnj.com/ http://www.conormed.com/ Company News On-Call:
http://www.prnewswire.com/comp/467347.html
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