King Pharmaceuticals to Acquire Meridian Medical Technologies

Oct 21, 2002, 01:00 ET from King Pharmaceuticals, Inc.

    BRISTOL, Tenn., and COLUMBIA, Md., Oct. 21 /PRNewswire-FirstCall/ -- King
 Pharmaceuticals, Inc. (NYSE:   KG) and
 Meridian Medical Technologies, Inc. (Nasdaq:   MTEC) announced today that they
 have entered into a definitive agreement whereby King will acquire Meridian
 for a cash price of $44.50 per share of Meridian common stock, totaling $247.8
 million.  The acquisition represents the combination of a premier specialty
 pharmaceutical company with the innovative leader in auto-injector technology.
 King expects the transaction to be accretive to earnings upon closing,
 excluding anticipated synergies and non-recurring transaction expenses.
     Jefferson J. Gregory, Chairman and Chief Executive Officer of King,
 stated, "We believe King's acquisition of Meridian represents an excellent
 business combination, providing King with additional lines of growing
 exclusive pharmaceutical products, preeminent auto-injector technology, and
 enhanced pipeline opportunities.  Our extensive infrastructure, including
 King's research and development, regulatory, manufacturing, quality
 management, and sales and marketing resources, strategically complement and
 enhance the potential for the continued growth of Meridian's current product
 lines.  Moreover, King's established capabilities expand the prospects for the
 potential development of new and innovative products utilizing Meridian's
 exclusive auto-injector technology.  Accordingly, we believe this transaction
 offers excellent opportunities for growth and should produce a very good
 return for our shareholders."
     James H. Miller, Chairman, President and Chief Executive Officer of
 Meridian, said, "Meridian's management and employees are very proud of the
 successful business we have built.  King has a proven record of acquiring
 companies to produce growth, and this transaction provides good value to our
 shareholders and should result in significant new opportunities for our
 customers and employees."
     Meridian pioneered the development, and is the leading manufacturer, of
 auto-injectors for the self-administration of injectable drugs.  An auto-
 injector is a pre-filled, pen-like device that allows a patient or caregiver
 to automatically inject a precise drug dosage quickly, easily, safely, and
 reliably.  Auto-injectors are a convenient, disposable, one-time use drug
 delivery system designed to improve the medical and economic value of many
 drug therapies.  Meridian's growing pharmaceutical products include EpiPen(R),
 an auto-injector filled with epinephrine for the emergency treatment of
 anaphylaxis resulting from severe or allergic reactions to insect stings or
 bites, foods, drugs, and other allergens, as well as idiopathic or exercise
 induced anaphylaxis.  Demand for EpiPen(R) has continued to grow due to
 increased awareness of the health risks associated with allergic reactions,
 particularly those associated with food.  EpiPen(R) is a commercially
 available prescription pharmaceutical product marketed exclusively by Dey
 L.P., an affiliate of Merck KgaA, with a substantial sales and marketing force
 pursuant to a long-term contract.
     Other growing products include a nerve gas antidote utilizing Meridian's
 patented dual chambered auto-injector and injection process, and auto-
 injectors filled with morphine for pain management, diazepam for treatment of
 seizures, and lidocaine for the treatment of cardiac arrhythmias.  Meridian's
 nerve gas antidote, morphine, and diazepam auto-injector products are
 presently sold exclusively to the U.S. Department of Defense pursuant to an
 Industrial Base Maintenance Contract, U.S. allied foreign governments, and
 federal, state and local government agencies in the U.S. for use by first line
 emergency responders.  An Abbreviated New Drug Application ("ANDA") for
 DiaJect(R), Meridian's diazepam filled auto-injector, is now pending with the
 U.S. Food and Drug Administration ("FDA").  Once approved, King plans to
 market DiaJect(R) to primary care physicians through King's dedicated U.S.
 field sales force as the only adjunctive injectible therapy, outside of a
 hospital setting, for the emergency treatment of status epilepticus and severe
 recurrent convulsive seizures associated with epilepsy.
     Commenting on opportunities for growth, Kyle P. Macione, President of
 King, said, "With this acquisition, King is well positioned to take advantage
 of large and growing initiatives in homeland security by providing nerve gas
 antidotes to first responders under the Metropolitan Medical Response System
 ("MMRS").  Furthermore, King plans to employ its established infrastructure
 and regulatory experience to seek FDA approval of pediatric and adult
 formulations of a nerve gas antidote utilizing Meridian's patented dual
 chambered auto-injector and injection process, with patent protection
 extending to 2010.  We believe the commercial availability of such approved
 formulations of this product represents a unique opportunity which is
 critically important to our society in light of the current uncertain
 environment in which we live."
     Meridian previously reported that revenues totaled $82.4 million and net
 income equaled $9.3 million for the fiscal year ended July 31, 2002.
     James R. Lattanzi, Chief Financial Officer of King, added, "After the
 merger, we believe we can create synergies that enhance the profitability of
 Meridian's core business.  These synergies include the consolidation of
 Meridian's manufacturing processes into King's existing manufacturing
 facilities."
     The boards of directors of both companies have approved unanimously the
 terms of the agreement.  King will finance the acquisition out of the
 Company's available cash.  Closing of the transaction is subject to approval
 by the holders of a majority of the outstanding common stock of Meridian,
 appropriate governmental approval, and other customary conditions, and is
 expected to be completed before the end of January 2003.
     Commenting on the current market for acquisitions in the pharmaceutical
 industry, Mr. Gregory said, "The market for acquisitions is presently very
 strong.  Moreover, King is currently involved in serious discussions with
 respect to numerous additional potential acquisition opportunities."  Mr.
 Gregory added, "Our Company is well positioned to continue the successful
 execution of our proven acquisition growth strategies with over $1 billion in
 cash and available capacity under our revolving credit facility remaining
 after taking into account the total consideration King expects to pay in
 connection with this transaction."
     Credit Suisse First Boston acted as financial advisor to King and Gerard
 Klauer Mattison & Co. acted as financial advisor to Meridian.
     King will host a conference call today, October 21, 2002, at 9:00 a.m.,
 E.D.T., to further discuss the Company's planned acquisition of Meridian.
 Interested persons may listen to the conference call at
 http://www.firstcallevents.com/service/ajwz368514752gf12.html or by dialing
 800-245-3043 (US only) or 785-830-1957 (international), passcode KG.  If you
 are unable to participate during the live webcast, the call will be archived
 on King's web site http://www.kingpharm.com for not less than 30 days
 following the call.  A replay of the conference call will also be available
 for not less than 30 days following the call by
 dialing 888-566-0824 (US only) or 402-220-0117 (international).
     (Minimum requirements to listen to the broadcast: The Windows Media Player
 software, downloadable free from
 http://www.microsoft.com/windows/windowsmedia/EN/default.asp, and at least a
 28.8 Kbps connection to the internet.  If you experience problems listening to
 the broadcast, send an email to webcastsupport@tfprn.com)
 
     King, headquartered in Bristol, Tennessee, is a vertically integrated
 pharmaceutical company that manufactures, markets, and sells primarily branded
 prescription pharmaceutical products.  King, an S&P 500 Index company, seeks
 to capitalize on opportunities in the pharmaceutical industry created by cost
 containment initiatives and consolidation among large global pharmaceutical
 companies.  King's strategy is to acquire branded pharmaceutical products and
 to increase their sales by focused promotion and marketing and through product
 life cycle management.
 
     Meridian Medical Technologies, a specialty pharmaceuticals company, is a
 world leader in sales of auto-injector drug delivery systems.  Meridian
 develops health care products designed to save lives, reduce health care costs
 and improve quality of life.
 
     This release contains forward-looking statements which reflect
 management's current views of future events and operations, including, but not
 limited to, statements pertaining to King's planned acquisition of Meridian,
 statements pertaining to King's acquisition of Meridian being accretive to
 King's earnings, statements pertaining to the growth of Meridian's current
 lines of exclusive pharmaceutical products, including, but not limited to,
 EpiPen(R), Meridian's nerve gas antidote, and Meridian's auto-injectors filled
 with morphine, diazepam, and lidocaine, statements pertaining to the enhanced
 pipeline opportunities provided King by its acquisition of Meridian, including
 DiaJect(R), and the unique opportunities presented by potential civilian
 formulations of a nerve gas antidote utilizing Meridian's patented dual
 chambered auto-injector and injection process, statements pertaining to the
 ability of King's extensive infrastructure and resources to enhance the
 potential for growth of Meridian's current product lines, statements
 pertaining to the ability of King's capabilities to expand the prospects for
 the potential development of new and innovative products utilizing Meridian's
 exclusive auto-injector technology, statements pertaining to opportunities for
 growth created by King's acquisition of Meridian and the resulting return for
 King's shareholders, statements pertaining to King's plans to market
 DiaJect(R), once approved, through King's dedicated U.S. field sales force,
 statements pertaining to King's ability to take advantage of large and growing
 initiatives in homeland security as a result of King's acquisition of
 Meridian, statements pertaining to Meridian's dual chambered auto-injector and
 injection process having patent protection to 2010, statements regarding
 potential additional acquisition opportunities for King, and statements
 pertaining to King's ability to continue the successful execution of King's
 acquisition growth strategies.  These forward-looking statements involve
 certain significant risks and uncertainties, and actual results may differ
 materially from the forward-looking statements.  Some important factors which
 may cause results to differ include: the ability of King and Meridian to
 consummate the contemplated transaction described above, dependence on
 approval of the transaction by the shareholders of Meridian, dependence on the
 ability of King and Meridian to obtain all necessary government approvals of
 the transaction, dependence on management of King's growth and integration of
 its acquisitions, specifically including, but not limited to, the contemplated
 acquisition, the ability of King to realize potential synergies from the
 contemplated acquisition, dependence on King's ability to successfully
 transfer the manufacture of Meridian's products to King's existing
 manufacturing facilities in compliance with the requirements of the FDA and
 other governmental authorities, dependence on
 growth of net sales of King's branded pharmaceutical products, in particular,
 Altace(R), Levoxyl(R), and Thrombin-JMI(R), as well as revenue and earnings
 per share, at a rate equal to or in excess of management's projections,
 dependence on growth of net sales of Meridian's pharmaceutical products,
 dependence on the ability of Dey to successfully promote EpiPen(R), dependence
 on the successful marketing and sales of King's and Meridian's products,
 dependence on King's ability to continue to acquire branded products,
 including through the acquisition of other pharmaceutical companies, the high
 cost and uncertainty of research, clinical trials, and other development
 activities involving pharmaceutical products, dependence on King's ability to
 successfully develop civilian formulations of a nerve gas antidote utilizing
 Meridian's patented dual chambered auto-injector and injection process,
 dependence on FDA approval of the ANDA now pending on DiaJect(R) and King's
 ability to successfully continue that approval process, dependence on King's
 ability to successfully develop new and innovative products utilizing
 Meridian's exclusive auto-injector technology, dependence on King's ability to
 successfully launch and market DiaJect(R) and civilian formulations of a nerve
 gas antidote utilizing Meridian's patented dual chambered auto-injector and
 injection process, the unpredictability of the duration and results of the
 FDA's review of Investigational New Drug Applications, New Drug Applications,
 and Abbreviated New Drug Applications and/or the review of other regulatory
 agencies worldwide, dependence on King's ability to maintain effective patent
 protection for Meridian's dual chambered auto-injector and injection process
 through 2010, dependence on the ability of King's dedicated field sales force
 representatives to successfully market King's branded pharmaceutical products,
 dependence on the ability of King's dedicated field sales force
 representatives to successfully market DiaJect(R) and civilian formulations of
 a nerve gas antidote utilizing Meridian's patented dual chambered auto-
 injector and injection process, dependence on the availability and cost of raw
 materials for King's and Meridian's products, dependence on King's ability to
 successfully negotiate, enter into, and maintain governmental contracts in
 relation to Meridian's pharmaceutical products, including in particular
 contracts with the U.S. Department of Defense, dependence on no material
 interruptions in supply by contract manufacturers of King's or Meridian's
 products, dependence on the potential effect on sales of King's existing
 branded pharmaceutical products and Meridian's pharmaceutical products as a
 result of the potential development and approval of a generic substitute for
 any such product or other new competitive products, dependence on whether our
 customers order pharmaceutical products in excess of normal quantities during
 any quarter which could cause our sales of branded pharmaceutical products to
 be lower in a subsequent quarter than they would otherwise have been,
 dependence on the potential effect of future acquisitions and other
 transactions pursuant to our growth strategies on King's financial and other
 projections, dependence on our compliance with FDA and other government
 regulations that relate to our business, and dependence on changes in general
 economic and business conditions, changes in current pricing levels, changes
 in federal and state laws and regulations, and manufacturing capacity
 constraints.  Other important factors that may cause actual results to differ
 materially from the forward-looking statements are discussed in the "Risk
 Factors" section and other sections of King's Form 10-K for the year ended
 December 31, 2001 and Form 10-Q for the quarter ended June 30, 2002, which are
 on file with the Securities and Exchange Commission.  King does not undertake
 to publicly update or revise any of its forward-looking statements even if
 experience or future changes show that the indicated results or events will
 not be realized.
 
     Meridian will be filing a proxy statement and other relevant documents
 concerning the transaction with the Securities and Exchange Commission (the
 "SEC").  STOCKHOLDERS AND INVESTORS ARE URGED TO READ THE PROXY STATEMENT AND
 ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC BECAUSE THEY CONTAIN IMPORTANT
 INFORMATION.  Investors will be able to obtain the documents free of charge at
 the SEC's website, http://www.sec.gov.  In addition, documents filed with the
 SEC by Meridian will be available free of charge from Meridian's Manager,
 Investor Relations & Corporate Communications, Lenny Santiago, 10240 Old
 Columbia Road, Columbia, MD 21046 (tel. no. (443) 259-7842).  READ THE PROXY
 STATEMENT CAREFULLY BEFORE MAKING A DECISION CONCERNING THE MERGER.
 
     Information regarding the identity of the persons who may, under SEC
 rules, be deemed to be participants in the solicitation of stockholders of
 Meridian in connection with the transaction, and their interests in the
 solicitation, is set forth in a filing made by Meridian with the SEC on the
 date of this press release.
 
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SOURCE King Pharmaceuticals, Inc.