-----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, HwuqZzUmZxVy/WXzJMRFw7lpkO1CrhRQ0Fneom9tdD26E7iFPFFre1Xv7PDeRwqq twr8eludIgy9+FZ/fWYz3A== 0000940180-00-000229.txt : 20000307 0000940180-00-000229.hdr.sgml : 20000307 ACCESSION NUMBER: 0000940180-00-000229 CONFORMED SUBMISSION TYPE: 425 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20000301 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ALGOS PHARMACEUTICAL CORP CENTRAL INDEX KEY: 0000924862 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 223142274 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 425 SEC ACT: SEC FILE NUMBER: 000-28844 FILM NUMBER: 558321 BUSINESS ADDRESS: STREET 1: 1333 CAMPUS PARKWAY CITY: NEPTUNE STATE: NJ ZIP: 07753 BUSINESS PHONE: 9089385959 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ALGOS PHARMACEUTICAL CORP CENTRAL INDEX KEY: 0000924862 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 223142274 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 425 BUSINESS ADDRESS: STREET 1: 1333 CAMPUS PARKWAY CITY: NEPTUNE STATE: NJ ZIP: 07753 BUSINESS PHONE: 9089385959 425 1 FORM 425 Filed by Algos Pharmaceutical Corporation 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. Commission File No. 000-28844 Subject Company: Algos Pharmaceutical Corporation ALGOS PHARMACEUTICAL CORPORATION MADE THE FOLLOWING PRESENTATION TO INVESTORS ON MARCH 1, 2000 AT AN INVESTOR CONFERENCE SPONSORED BY BB BIOTECH. Algos Pharmaceutical Corporation Endo Pharmaceuticals Inc. March 2000 2 Risk Factors This overview of Algos contains "forward-looking" statements, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended, that are based on Algos management's beliefs and assumptions, current expectations, estimates and projections. Statements that are not historical facts, including statements which are preceded by, followed by, or that include the words "believes;" "anticipates;" "plans;" "expects;" "estimates;" or similar expressions and statements about Algos are forward-looking statements. Many of the factors that will determine Algos' future results are beyond the ability of Algos to control or predict. These statements are subject to risks and uncertainties and, therefore, actual results may differ materially. The reader should not rely on any forward-looking statement. Algos undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise. The FDA review process is an uncertain one whose outcome cannot be guaranteed. There is no guarantee the FDA will accept or approve any New Drug Application. In particular, there is no guarantee that the FDA will approve the Algos MorphiDex(R) New Drug Application. Under the Prescription Drug User Fee Act, the FDA has 12 months to review an accepted application and issue an Action Letter, which could be a deficiency or an approval. A resubmission in response to a deficiency letter must be reviewed by the FDA within two or six months depending on whether or not "substantial review work" is required. There is no guarantee the FDA will grant an approval in response to a resubmission. There is no guarantee the foregoing standards and timelines will not be changed. Important factors that may affect Algos' future results include, but are not limited to, uncertainty associated with pre-clinical studies and clinical trials and regulatory approval, the effect of economic conditions, impact of competitive products and pricing, product development, changes in laws and regulations, customer demand, possible future litigation, availability of future financing, uncertainty of market acceptance of new products and private party and governmental reimbursement policies. Readers should evaluate any statements in light of these important factors. See "Risk Factors" in Algos' Annual Report on Form 10-K, preliminary proxy statement filed on Schedule 14A and Algos press releases. 3 Algos Summary On November 29, 1999, Algos entered into a definitive merger agreement with Endo Pharmaceuticals Holdings Inc., pursuant to which Algos will merge with a subsidiary of Endo and the Algos stockholders will receive shares of Endo common stock and warrants to purchase Endo common stock that become exercisable upon the FDA approval of Algos' MorphiDex(R) New Drug Application. This merger, including the direct and indirect interests of the Algos board and management in the merger, and Algos and Endo generally, are described the preliminary proxy statement of Algos filed with the SEC on Schedule 14A and the amendments thereto. Algos stockholders should read the proxy statement because it contains important information. Copies of the proxy statement and other relevant documents are available to the public from commercial document retrieval services and at the Internet world wide web site maintained by the Securities and Exchange Commission at www.sec.gov and may also be obtained from Algos by calling Gary Anthony at (732) 938-5959 or from Endo by calling Osagie Imasogie at (610) 558-9800. 4 Algos Summary . Focus on fast-growing, billion dollar Pain Management markets Patented NMDA technology provides superior pain relief . Eight analgesic, anesthetic and addiction treatment products in late-stage development . Solid Phase II and Phase III clinical data . Definitive merger agreement signed with Endo in November 1999 5 Recent Developments . FDA meeting held December 1999 to resolve MorphiDex(R) NDA deficiencies . Two additional large MorphiDex(R) post-operative pain studies underway . MorphiDex(R) refiling preparation underway 6 NMDA-Enhanced Analgesia . Opioid analgesics activate Mu receptors, triggering an intracellular response from NMDA (N-methyl-D-aspartate) receptors in the brain and spinal cord. . NMDA receptors activate the enzyme PKC, which desensitizes Mu receptors, resulting in reduced analgesia. . Dextromethorphan, an NMDA-receptor antagonist, prevents the activation of PKC. . Combining dextromethorphan with an opioid analgesic prevents the desensitization of the Mu receptor, increasing analgesia. 7 Single Opioid Pain Management Market Graph describing the growth of the Single Opioid Pain Management Market between 1997 and 1999. The graph shows approximate sales figures in the following amounts for the following years: 1997 between $400 and $600 million; 1998 between $600 and $800 million; 1999 between $1 Billion and $1.2 Billion. 8 Results of MorphiDex(R) Chronic Use Study 013 Treatment Variable Period N MS:DM MS Difference P-Value - ------------------------------------------------------------------------------- __ Average Morphine 1 89 76.2 163.7 87.6 less than 0.001 Daily Dose (mg) 2 77 84.0 160.3 76.3 less than 0.001 Combined 77 80.3 161.5 81.2 less than 0.0001 - ------------------------------------------------------------------------------- __ Number of 1 8 4 Drop-outs 2 1 6 Combined 9 10 9 Average Daily Dose of Morphine as MorphiDex(R) Over Time - Study 018 Graph describing a ten month study, indicating that during the study the approximate Mean Morphine Dosage did not exceed 150 milligrams. 10 Month Patients (N=116) Mean Morphine Dose (mg/day) 10 Merger Summary . Algos will merge with and into a subsidiary of Endo . Algos shareholders will receive one share of Endo common stock and one Endo warrant exercisable on MorphiDex(R) approval . Endo common stock received will be publicly traded . Endo warrants will be, if elected, publicly traded . Carol A. Ammon named President and CEO and John W. Lyle named Chairman of the Board 11 Merger Summary Endo Endo Achieves Does Not Achieve Cash Gross Cash Gross MorphiDex(R) Approved by: Profit Target Profit Target - -------------------------------------------------------------------------------- 12/01 35% 40% 1/02 to 6/02 30% 35% 7/02 to 12/02 25% 30% MorphiDex(R) not 15% 20% approved by 12/02 12 Endo Pharmaceuticals Inc. Formed in August 1997: An innovative, therapeutically-focused pharmaceuticals company with a strong brand presence and market share in acute and chronic pain management 13 Endo's Marketing Strategy for Existing Brands . Capitalize on strong brand equity inherent in each product . Revitalize existing brands through increased marketing directly to prescription writers . Focus on promotionally sensitive products which have not been marketed in many years preparing market for future products . Build Franchise - line extensions, novel new technology and new chemical entities 14 Leading Brand Names . Endo(R) name has been in existence since 1935 and has a reputation for quality and customer focus. . Percocet(R) and Percodan(R) are considered "gold standards" in the pain management products segment. 15 Pain Management: Key Drivers of Market Growth . Demographics . Increase in number of surgical procedures . Changing attitudes towards pain management . Introduction of new forms of pain medications 16 Overview of Endo . Manufacturing: All manufacturing is contracted with third parties including: . DuPont Pharmaceuticals, Merck, Teikoku Seiyaku Co. Ltd. . Sales Force: Contract force of 300 individuals solely dedicated to Endo. Partnership with Ventiv Health, Inc. (formerly Snyder Healthcare Sales). 17 Overview of Endo . Sales and marketing driven culture . Focused, effective research and development . Flexible cost structure . Management expertise 18 Growth Through New Products . Percocet(R) Franchise: . Percocet(R) 10.0/650 . Percocet(R) 7.5/500 . Percocet(R) 5.0/325 . Percocet(R) 2.5/325 . "Gold Standard" . Supported by prescribing patterns of physicians 19 Growth Through New Products . Zydone(R) . Competes in $1 Billion (branded) Hydrocodone/Acetaminophen Market . No generic competition 20 Growth Through New Products . Lidoderm(R) . 200,000 Post-Herpetic Neuralgia Patients . Orphan Status granted by FDA through March 2006 21 Net Sales (in millions) 1998 $108.4 million 1999 $138.5 million 2000 $220.6 million (f) (f) = Forecast 22 Gross Profit* (in millions) 1998 $53.6 million 1999 $80.3 million 2000 $154.3 million (f) (f) = Forecast * as determined by generally accepted accounting principles 23 Cash Gross Profit* (in millions) 1998 $72.2 million 1999 $99.5 million 2000 $174.8 million (f) (f) = Forecast *as defined in the merger agreement 24 Consolidated EBITDA* (in millions) 1998 $40.7 million 1999 $47.2 million 2000 $100.3 million (f) (f) = Forecast *as defined by Credit Facility 25 Strategic Rationale . Combined company becomes a US leader in Pain Management with brand equity and novel proprietary technology . Marriage of established specialty pharmaceutical Company with a broad technology development Company . Significant growth potential through: . Existing marketed products . Newly launched branded products . Pipeline of late stage development products 26 Strategic Rationale . Focus on large, fast-growing Pain Management markets . Accelerated market penetration of Algos' patented technology through existing Endo sales force . Potential to maximize OxycoDex(TM) sales through Percocet(R) brand 27 Strategic Rationale . Complementary Strengths: . Management Team . Product Formulation and Manufacturing . Existing Sales Force . Distribution Network . Clinical Development . Regulatory 28 Broad and Deep Portfolio Moderate Moderately Severe Severe
Existing Brands: Nubain(R) Percocet(R) 5.0, Percodan(R), Percolone(R) Numorphan(R) New Brands: Lidoderm(R) Percocet(R) 2.5 Percocet(R) 7.5, Percocet(R) 10 Zydone(R) 5, Zydone(R) 7.5, Zydone(R) 10 Pipeline Brands: EN3222 EN3212 Numorphan(R) IR and CR Patent Protected HydrocoDex(TM) OxycoDex(TM) MorphiDex(R) Brands EN3215 LidoDex(TM) NS NeuroDex(TM) EN3216
29 These communications include "forward-looking" statements, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended, that are based on Algos management's beliefs and assumptions, current expectations, estimates and projections. Statements that arc not historical facts, including statements which are preceded by, followed by, or that include the words "believes;" "anticipates;" "plans;" "expects;" "estimates;" or similar expressions and statements about Algos are forward-looking statements. Many of the factors that will determine Algos' future results are beyond the ability of Algos to control or predict. These statements arc subject to risks and uncertainties and, therefore, actual results may differ materially. The reader should not rely on any forward-looking statement. Algos undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise, In addition, the FDA review process is an uncertain one whose outcome cannot be guaranteed. There is no guarantee the FDA will accept or approve any New Drug Application. In particular, there is no guarantee that the FDA will approve the Algos MurphiDex(R) New Drug Application. Under the Prescription Drug User Fee Act, the FDA has 12 months to review an accepted application and issue at) Action Letter, which could be a deficiency or an approval. A resubmission in response to a deficiency letter must be reviewed by the FDA within two or six months depending on whether or not "substantial review work" is required. There is no guarantee the FDA will grant an approval in response to a resubmission. There is no guarantee the foregoing standards and timelines will not be changed. Important factors that may affect Algos' future results include, but are not limited to uncertainty associated with pre-clinical studies and clinical trials and regulatory approval, the effect of economic conditions, impact of competitive products and pricing, product development, changes in laws and regulations, customer demand, possible future litigation, availability of future financing, uncertainty of market acceptance of new products and private party and governmental reimbursement policies. Readers should evaluate any statements in light of these important factors. See "Risk Factors" in Algos' Annual Report on Form 10-K, preliminary proxy statement riled on Schedule 14A and Algos press releases. 30 On November 29, 1999, Algos entered into a definitive merger agreement with Endo Pharmaceuticals Holdings Inc., pursuant to which Algos will merge with a subsidiary of Endo and the Algos stockholders will receive shares ur Endo common stock and warrants to purchase Endo common stock that become exercisable upon the FDA approval of Algos' MorphiDex(R) New Drug Application. This merger, including the direct and indirect interests of the Algos board and management in the merger, and Algos and Endo generally, are described the preliminary proxy statement of Algos filed with the SEC on Schedule 14A and the amendments thereto. Algos stockholders should read the proxy statement because it contains important information. Copies of the pmxy statement and other relevant documents are available to the public from cornmercial document rctrieval services and at the biternet world wide web site maintained by the Securities and Exchange Commission at www.sec.gov and may also be obtained from Algos by calling Gary Anthony at (732) 938-5959 or from Endo by calling Osagie Imasogie at (610) 558-9800. 31 -----END PRIVACY-ENHANCED MESSAGE-----