-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Urzv9APaKVw74R6zUYOka4LtvTqmgbXJzAMGSmPPwV59a25Plrf8ZE83ScYijU5C p6OWORtJmYFnSkTcqtDOVQ== 0000893750-99-000617.txt : 19991110 0000893750-99-000617.hdr.sgml : 19991110 ACCESSION NUMBER: 0000893750-99-000617 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19991108 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19991109 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN HOME PRODUCTS CORP CENTRAL INDEX KEY: 0000005187 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 132526821 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-01225 FILM NUMBER: 99743792 BUSINESS ADDRESS: STREET 1: 5 GIRALDA FARMS CITY: MADISON STATE: NJ ZIP: 07940 BUSINESS PHONE: 9736605000 MAIL ADDRESS: STREET 1: 5 GIRALDA FARMS CITY: MADISON STATE: NJ ZIP: 07940 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 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): November 8, 1999 AMERICAN HOME PRODUCTS CORPORATION (Exact name of registrant as specified in its charter) Delaware 1-1225 13-2526821 (State or other jurisdiction (Commission File (IRS Employer of incorporation) Number) Identification No.) Five Giralda Farms, Madison, New Jersey 07940 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: 973-660-5000 Item 5. Other Events Copies of the joint American Home Products Corporation ("AHP") and Warner-Lambert Company ("Warner-Lambert") press release with respect to the meeting with analysts (the "Joint Analyst Presentation") by AHP and Warner- Lambert, and the visual portion of such presentation, are filed as Exhibits 99.1 and 99.2 hereto, respectively, and are incorporated herein by reference. Statements made in the Joint Analyst Presentation that state the intentions, beliefs, expectations or predictions of AHP, Warner-Lambert, or their respective managements for the future are forward-looking statements. It is important to note that both AHP's and Warner-Lambert's actual results could differ materially from those projected in such forward-looking statements. Information concerning factors that could cause actual results to differ materially from those in forward-looking statements is contained from time to time in the filings of each of AHP and Warner-Lambert with the U.S. Securities and Exchange Commission (the "SEC"). Copies of these filings may be obtained by contacting AHP or Warner-Lambert, as applicable, or the SEC. Investors are urged to read the joint proxy statement/prospectus including any amendments or supplements thereto (the "Joint Proxy Statement/Prospectus") which will be prepared by AHP, Wolverine Sub Corp., a Delaware corporation and a wholly owned subsidiary of AHP, and Warner-Lambert in connection with the transactions contemplated by the Agreement and Plan of Merger, dated as of November 3, 1999, among AHP, Wolverine Sub Corp. and Warner-Lambert. Investors are urged to read the Joint Proxy Statement/Prospectus because it will contain important information to investors. When completed, the Joint Proxy Statement/Prospectus will be mailed to the stockholders of each company. Copies of the Joint Proxy Statement/Prospectus may be obtained for free by contacting Warner-Lambert or AHP and at the SEC's web site www.sec.gov. Item 7. Financial Statements and Exhibits (c) Exhibits (99.1) Press Release, dated November 8, 1999, with respect to the Joint Analyst Presentation (99.2) Joint Analyst Presentation 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. -2- AMERICAN HOME PRODUCTS CORPORATION By: /s/ Paul J. Jones ------------------------------------------ Name: Paul J. Jones Title: Vice President and Comptroller (Duly Authorized Signatory and Chief Accounting Officer) Dated: November 9, 1999 -3- EXHIBIT INDEX (99.1) Press Release, dated November 8, 1999, with respect to the Joint Analyst Presentation (99.2) Joint Analyst Presentation -4- EX-99.1 2 FOR IMMEDIATE RELEASE Media Contact: Media Contact: Lowell Weiner Carol Goodrich American Home Products Warner-Lambert (973) 660-5013 (973) 540-3320 Investor Contact: Investor Contact: Thomas Cavanagh George Shields American Home Products Warner-Lambert (973) 660-5706 (973) 540-6916 George Sard/Paul Verbinnen/David Reno Fred Spar/Roy Winnick Sard Verbinnen & Company Kekst & Company (212) 687-8080 (212) 521-4800 AMERICAN HOME PRODUCTS AND WARNER-LAMBERT OUTLINE POWERFUL GROWTH STORY FOR AMERICANWARNER Madison, N.J. and Morris Plains, N.J., November 8, 1999 -At an analyst presentation, the managements of American Home Products (NYSE:AHP) and Warner-Lambert Company (NYSE:WLA) reaffirmed their commitment to their announced strategic business combination and outlined the following key details of a powerful growth story for AmericanWarner Inc.: - - Accelerated bottom-line growth and strong potential for accelerating top-line growth and P/E multiple expansion - - Cost synergies: $1.2 billion in annual savings fully captured by the third year - - Sustainable revenue growth: 11% Compound Annual Growth Rate (CAGR) through 2002 (estimated $29.7 billion in 2000 grows to $36.1 billion in 2002) - - Sustainable net income growth: 20% CAGR through 2002 (estimated $4.8 billion in 2000 grows to $6.8 billion in 2002) - - Strong late-stage pipeline and recent launches: ReFacto, Sonata, Rapamune, Meningitec, Lipitor (Japan) and new product growth expected from Pregabalin, Zenarestat, Prinomastat, Prevenar (21 launches from 1999 through 2002) - - Broad therapeutic area leadership and diverse product portfolio with less dependence on Lipitor - - Broadest technology capability in the industry (e.g., proteins, vaccines, structure-based-drug design, small molecules) - - #1 position worldwide in over-the-counter with $4.9 billion in combined 2000 sales - - Enhanced market presence and penetration; increased sales potential for existing and new products; significant scale in major international markets; and more attractive in-licensing platform - - Substantial momentum based on "best-of-the-best" merger philosophy - - Minimal patent exposure in the near term "It's clear that our friendly merger with Warner-Lambert is strategically and financially compelling and that it will create enormous near and long-term value for the shareholders of Warner-Lambert and American Home Products," said John R. Stafford, Chairman, President and Chief Executive Officer, American Home Products. Lodewijk J.R. de Vink, Warner-Lambert's Chairman, President and Chief Executive Officer, said, "Our merger with American Home Products is an ideal strategic combination of two strong and compatible world-class companies that will create exceptional long-term growth and value for our shareholders. -2- With a strong and committed leadership team, AmericanWarner will benefit from substantial momentum and be well-positioned to take full advantage of extraordinary growth opportunities on a global scale." American Home Products Corporation is one of the world's largest research-based pharmaceutical and health care products companies. It is a leader in the discovery, development, manufacturing and marketing of prescription drugs and over-the-counter medications. It is also a global leader in vaccines, biotechnology, agricultural products and animal health care. In 1999, its revenues are expected to approach $14 billion and the Company will invest $1.8 billion in research and development. It employs 52,000 people worldwide. Warner-Lambert is a global company devoted to discovering, developing, manufacturing and marketing quality pharmaceutical, consumer health care, and confectionery products. Its central research focus is on heart disease, diabetes, infectious diseases, disorders of the central nervous system and women's health care. In 1999, its revenues are expected to exceed $12 billion and the company will invest more than $1.2 billion in research and development. It employs more than 43,000 people worldwide. Statements made in this press release that state "we will," "we expect," or otherwise state the companies' predictions for the future are forward-looking statements. Actual results might differ materially from those projected in the forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in each Company's annual report on Form 10K-A for the year ended December 31, 1998 filed with the U.S. Securities and Exchange Commission. For a copy of these filings, call the media contacts listed on this press release. -3- EX-99.2 3 AmericanWarner, Inc. ----------------------- Leadership and Momentum in Pharmaceuticals and Consumer Healthcare ----------------------- Statements made in this presentation that state either companies' or managements' intentions, beliefs, expectations or predictions for the future are forward-looking statements. It is important to note that both companies' actual results could differ materially from those projected in such forward-looking statements. Information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in each company's filings with the Securities and Exchange Commission ("SEC"). Copies of these filings may be obtained by contacting AHP, Warner-Lambert or the SEC. -2- TRANSACTION HIGHLIGHTS . Merger of equals . Clear strategic direction and organizational structure . Pooling of interests . Tax-free . Exchange ratio - 1 share of WLA - 1.4919 shares of AmericanWarner - 1 share of AHP - 1.0000 share of AmericanWarner . Significant synergies - Revenue upside - Cost savings of $1.2 billion -3- AMERICANWARNER: LEADERSHIP GROWTH RATES
1999E 2000E 2001E 2002E CAGR ('99-'02) ----- ----- ----- ----- -------------- Revenues $26.3Bn $29.7Bn $32.8Bn $36.1Bn 11% Pharma 17.2 19.7 22.0 24.5 13% Consumer 4.4 4.9 5.3 5.7 9% Net Income 3.9 4.8 5.7 6.8 20% EPS 1.48 1.79 2.15 2.55 20%
20% Net income growth with $1.2 billion in cost synergies -4- SUBSTANTIAL VALUE CREATION Opportunity for significant multiple expansion . Significant new product growth -- 21 launches (1999-2002) . Broadest technology capability in industry (e.g., proteins, vaccines, structure based drug design, small molecules) . Diverse product portfolio (with less dependence on Lipitor) . Leadership in OTC . Significant synergy and strategic opportunities - revenue acceleration - cost synergies - strategic moves . Substantial momentum based on "best-of-the-best" merger philosophy Leadership growth rates -5- PHARMACEUTICALS: NEAR-TERM PIPELINE Estimated Launch Dates
1999 2000 2001 2002 ----------------- ------------------- ------------------- ------------------- Femhrt* - HRT for Lipitor (Japan) - HMG Pregabalin - Zenarestat - aldose osteoporosis $100-200 million CoA reductase inhibitor for Gabapentanoid/anti-convulsant reductase inhibitor for cholesterol reduction for epilepsy diabetic neuropathy $400- $800-1,000 million $1,000-2,000 million 500 million Refacto* - advanced Relpax* - Migraine therapy AG-3340 - MMPI for prostate Igmesine - anti-depressant recombinant Factor VIII (co-promotion with Pfizer) and non-small-cell lung $500-800 million formulation for hemophilia $300-1,000 million cancer $800-1,000 million $300-800 million Sonata* - for insomnia Trimegestone - new progestin AG-1549 - NNRTI for HIV/AIDS Remume - immuno-therapy for $400-600 million $400-500 million $250-300 million HIV/AIDS $500-700 million Rapamune* - immuno- FluMist - vaccine for CMA-676 - cytotoxic CCI-779 - cytostatic for suppressant for organ influenza immunoconjugate for AML solid tumors $200-300 transplants $900+ million $100-200 million million Meningitec - for immunization Protonix* - proton pump Recombinant Human Bone Low dose PremPro - against meningitis $200 inhibitor for ulcers Morphogenic Protein 2 - for osteoporosis/menopause million $250-500 million bone repair $500-1,000 $300-600 million million Prevenar - vaccine for 7 most common strains of pneumococci $500-1,000 million
* Approved/Approvable Peak year sales estimates from analyst reports Steady stream of innovative new products -6- A ROBUST PRODUCT PIPELINE Number of Compounds Under Development
Pre- IND Tract Phase I Phase II Phase III registration Total --------- ------- --------- --------- ------------ ----- AHP 7 9 13 14 7 50 WLA 6 2 9 7 6 30 American Warner 13 11 22 21 13 80
-7- POWERFUL COMBINATION OF COMPLEMENTARY TECHNOLOGY PLATFORMS graphic illustrating that complementary platforms of small molecules; structure based drug design and combinatorial chemistry afford new opportunities for innovation in small molecule mimetics for proteins (small molecule mimetics for proteins, e.g., Factor VIII) graphic illustrating protein therapeutics afford new opportunities for innovation (e.g., bone morphogenic proteins) graphic illustrating that complementary platforms of protein therapeutics; vaccines design and gene therapy afford new opportunities for innovation in therapeutic vaccines (e.g., conjugate and DNA vaccines for cancer and anti-virals) -8- BIOTECH CAPABILITIES
AMERICAN WARNER --------------- Strong network of biotechs Genetics with outstanding Agouron Institute Immunex capabilities [Right arrow] Proven ability to maintain Key current entrepreneurial culture and to and pipeline Viracept Refacto successfully integrate scientists products AG 3340 BMP-2 Enbrel and compounds
-9- AMERICANWARNER: LEADING PHARMACEUTICALS
Warner-Lambert Top Drugs American Home Products Top Drugs - ---------------------------------------------------- -------------------------------------------- 2000 2000 Indication Sales Indication Sales - ---------------------------------------------------- -------------------------------------------- Lipitor Dyslipidemia $4,750MM Premarin family Osteoporosis $1,925MM Neurontin Epilepsy 825 Effexor Depression 1,000 Accupril Hypertension 650 OCs Contraception 700 Viracept HIV 525 Enbrel Rheumatoid 500 arthritis Prevenar Vaccine 450 Zosyn/Tazocin Infection 400
Strong combined portfolio with $12 billion in major products -10- DIVERSE PORTFOLIO OF PHARMACEUTICAL PRODUCTS - 2000 SALES [pie chart containing the following information:] Warner-Lambert $8.7Bn - --------------------- Neurontin - 9% Accupril - 7% Viracept - 6% Other - 23% Lipitor - 55% [pie chart containing the following information:] American Home Products $11.0Bn - ------------------------------ Other - 63% Premarin family - 18% Oral Contraceptives - 6% Effexor - 9% Prevenar - 4% [pie chart containing the following information:] AmericanWarner $19.7Bn - ------------------------- Other - 57%Lipitor - 24% Premarin family - 10% Effexor - 5% Neurontin - 4% A combination with less dependence on a single product -11- THERAPEUTIC AREA LEADERSHIP THERAPEUTIC AREA BASIS OF LEADERSHIP Cardiovascular . Lipitor . Accupril . Cordarone IV Women's Health . Premarin family . Oral contraceptives CNS . Effexor . Neurontin . Pregabalin . Dilantin . Sonata Virology . Viracept . Rescriptor Immunology . Rapamune . Enbrel Vaccines . Prevenar . Meningitec Leadership in multiple major categories -12- CONSUMER HEALTHCARE: WORLD-CLASS BRANDS
Warner-Lambert American Home Products - ------------------------------------------------ --------------------------------------------- Category 1999 Sales Category 1999 Sales - ------------------------------------------------ --------------------------------------------- Listerine Oral $475MM Advil Analgesics $500MM Sudafed Cough/cold 175 Centrum Nutritional 500 supplements Benadryl Allergy 175 Robitussin Cough 275 Zantac 75 Heartburn 175 Dimetapp Liquid cough 150 Lubriderm Skin care 125 Caltrate Calcium 125 supplement Neosporin Anti-infectants 100 Preparation H Other 100 Suppositories World Leader in OTC
-13- LEADERSHIP IN OTC . #1 position worldwide in OTC . Partner of choice . $4.9 billion in combined . Distinctive channel coverage 2000 sales . Portfolio of leading . Leadership in marketing share consumer heathcare products of voice . Significantly larger than . DTC capabilities and media nearest competitor purchase power . High potential switch opportunities (based on a proven track record) Market leadership leading to new opportunities -14- $1.2 BILLION OF COST SYNERGIES Corporate - 9% Consumer Health - 27% Pharma - 64% Percent Cost Reduction (from applicable base) - --------------------------------------------- Administration - 26% Distribution - 14% R&D - 11% Selling - 9% Marketing - 5% Manufacturing (COGs) - 4% Total - 9% $1.2 billion of annual cost synergies Fully implemented over three calendar years -15- REVENUE SYNERGY DRIVERS -- PHARMACEUTICALS Key Drivers Enhanced market presence and sales penetration Deep and broad launch capabilities (higher peak sales, faster ramp up) More attractive licensing partner Novel drug discovery opportunities Examples Greater upside in key products Accupril Effexor Faster/better launches Lipitor (Japan) Pregabalin Protonix Sonata Top market presence High profile sales identities (e.g., Wyeth-Ayerst, Lederle, Genetics Institute, Immunex, Parke-Davis, Warner-Lambert, Sankyo-Parke Davis, Agouron) Combined global salesforce of ~ 14,500 Combined U.S. sales force of ~ 5,500 Significant upside from complementary capabilities -16- REVENUE SYNERGY DRIVERS--OTC Key Drivers Examples ----------- -------- Category leadership Preferred retail relationships with global players (e.g., Walmart) Retail globalization Strength in nutritionals Enhanced nutritionals lineup Solgar Centrum Quanterra Enhanced switch capabilities -17- THE AMERICANWARNER COMBINATION: LEADERSHIP GROWTH RATES WITH FURTHER UPSIDE
1999E 2000E 2001E 2002E CAGR ('99-'02) -------- ------- ------- ------- -------------- Revenues $26.3Bn $29.7Bn $32.8Bn $36.1Bn 11% Pharma 17.2 19.7 22.0 24.5 13% Consumer 4.4 4.9 5.3 5.7 9% Net Income 3.9 4.8 5.7 6.8 20% 20% Net income growth with $1.2 A 1% increase in Pharma and billion in cost synergies Consumer revenues will increase net income growth by approximately 1%
-18- ILLUSTRATIVE VALUE CREATION
NEAR-TERM ($200 million in 2000E Cost Synergies) Market Capitalization ------------------------------------ AmericanWarner 2000 American Warner American Illustrative P/E Home Lambert Warner Value Creation ----------------------------------------------------------------- Pre-WSJ Article 29.6x $67 $69 $136 NA Day of WSJ Article 32.3x 74 75 149 $13 2000 P/E Range 33.0x $157 $21 35.0 166 30 37.0 176 40 39.0 185 49 LONG-TERM ($1.2 billion in 2002E Cost Synergies) Market Capitalization ---------------------------------- AmericanWarner 2000 American Warner American Illustrative P/E Home Lambert Warner Value Creation --------------------------------------------------------------- Pre-WSJ Article 29.6x $67 $69 $ 136 NA P/E Range 33.0x $ 226 $90 35.0 240 104 37.0 254 118 39.0 268 132
-19- AMERICANWARNER WOULD COMMAND A STRONG MARKET PRESENCE - - #1 company in pharmaceutical sales - Diversified product portfolio (i.e., less dependence on Lipitor) - Full late-stage and early-stage pipeline - Superior technology platforms including vaccines, recombinant proteins, hormone therapeutics and gene therapy - Broad therapeutic area presence (e.g., women's health, cardiovascular, oncology, inflammation, CNS) - - #1 company in OTC sales - Category leadership (e.g., nutritionals, cough/cold) - Enhanced global reach -20- -----END PRIVACY-ENHANCED MESSAGE-----