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[WARNER CHILCOTT LABORATORIES LOGO]
NEWS RELEASE
Craigavon, Northern Ireland/Rockaway, NJ September 27, 2000
IRISH HIGH COURT GRANTS FINAL APPROVAL FOR SCHEME OF ARRANGEMENT
GALEN HOLDINGS ACQUISITION OF WARNER CHILCOTT TO BE EFFECTIVE
SEPTEMBER 29, 2000
Craigavon, Northern Ireland/Rockaway, NJ...September 27, 2000...Galen Holdings,
plc (LSE:GAL.L) and Warner Chilcott, plc (NASDAQ:WCRX) today announced that the
Irish High Court has approved the Scheme of Arrangement under which Galen will
acquire Warner Chilcott.
The transaction is intended to be effective as of September 29, 2000 when Warner
Chilcott will become a wholly owned subsidiary of Galen Holdings, plc. Galen
ordinary shares will continue to be traded on the London and Irish Stock
Exchanges. Additionally, it is expected that, effective September 29, 2000 Galen
American Depositary Receipts ("ADRs") will commence trading on the Nasdaq
National Market under the symbol GALN. Each Galen ADR will be the equivalent of
four Galen ordinary shares. At that time, Warner Chilcott ADRs will cease
trading on, and be delisted from, the Nasdaq National Market after the close of
trading on Thursday, September 28, 2000. As previously announced, all Warner
Chilcott ADRs will be exchanged for Galen ordinary shares at a ratio of one to
2.5 and then converted into ADRs, each comprised of four Galen Shares.
Therefore, each Warner Chilcott ADR will convert into .625 of a Galen ADR;
however, no fractional shares will be issued. For example, if you hold 100
Warner Chilcott ADRs, after the conversion you will own 63 Galen ADRs. The
transaction will be tax free to Warner Chilcott's US, UK and Republic of Ireland
ordinary shareholders and ADR holders.
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One Warner Chilcott ADR = 1 WC ADR= 2.5 GAL shares = .625 Galen ADR
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1 GAL ADR = 4 GAL shares
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The Transaction will create a significant international specialty pharmaceutical
products and services group with combined pro forma revenues of $233.2 million
(Pound Sterling143.1 million). Based on the closing market price per Galen share
of Pound Sterling8.13 ($11.89) on September 26, 2000, the terms of the
transaction value each Warner Chilcott share at $29.72 and the total current
issued
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share capital of Warner Chilcott at approximately $439 million on a fully
diluted basis. The pro forma market capitalization of the combined group would
be approximately $1.8 billion.
Major benefits of the combination include:
- Strengthened women's healthcare portfolio. The combined entity will
benefit from the combination of Galen's pipeline of proprietary women's
healthcare products and Warner Chilcott's women's healthcare focused
sales and marketing organization in the US. In particular, the
transaction will enable Galen both to commercialize its intravaginal ring
drug delivery system ("IVR"), and, by retaining the distribution margin,
to achieve a greater economic stake in any future success of products
using the IVR platform technology. The strength of Warner Chilcott's US
sales and marketing organization will be improved by Galen's pipeline of
proprietary products, enhanced product development capability and current
GMP (good manufacturing practice) manufacturing capacity.
- Greater opportunities for growth and acquisitions. With its greater scale
and profitability, the combined entity expects to pursue acquisitions
both in the UK and the US as well as to seek selective in-licensing
opportunities from the pharmaceutical industry.
- An international management team with extensive pharmaceutical expertise.
The executive management of the combined entity, which will be continue
to be called Galen Holdings plc, will consist of two members each from
Galen and Warner Chilcott. Dr. John King will be Chairman of the Board,
Roger Boissonneault will be Chief Executive Officer, Geoffrey Elliott
will be Chief Financial Officer and Paul Herendeen will be Executive Vice
President and Director of Business Development. All four executives will
serve on the Board of Directors.
- Increased investor profile and enhanced liquidity. The combined entity
will have listings on the London and Irish Stock Exchanges and in the US
on Nasdaq National Market. This will offer investors an opportunity to
invest in a larger company with a growing international presence and
geographical reach.
Commenting on the transaction, Dr. John King, Chief Executive Officer of Galen,
said:
"This transaction is a major step in internationalizing the Galen business and
provides Galen with immediate product marketing and distribution strength in the
US, the world's largest
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pharmaceutical market. The combination will allow us to geographically expand
the distribution of our women's healthcare portfolio, including our IVR product,
within Galen without having to give away value from out-licensing deals. The
enlarged group will have a larger therapeutic and geographic base with
significant combined sales forces in the US, UK and Ireland providing a strong
platform to take the enlarged business forward."
Roger Boissonneault, President and Chief Operating Officer of Warner Chilcott,
who will be joining the Galen Board, added:
"The most exciting element of this transaction is the opportunity to combine the
complementary strengths of our management teams. With the scale to be
competitive in segments of both the UK and the US markets we will have access to
a broad range of initiatives and the strength to capitalize on those we choose
to pursue. Our entire senior management team is looking forward to developing
the business as a combined entity."
GALEN HOLDINGS, PLC
Galen is an integrated pharmaceutical company, based in Northern Ireland. The
company was founded in 1968 and was listed on the London Stock Exchange in 1997.
Galen develops and manufactures branded prescription pharmaceutical products,
which are promoted by its 65 person sales and marketing organization in the
United Kingdom and Ireland. Galen's Pharmaceutical Services division supplies
and distributes clinical trial materials internationally, operates a drug
reconciliation business and uses computer-based interactive voice response
systems to permit the more efficient management of the clinical trial process.
The Services division also provides a 'bench-to-pilot-scale' specialist chemical
synthesis service for the research-based pharmaceutical industry.
Galen's research and development activity focuses on the development of
proprietary drug delivery applications and technologies. Galen has a solid
pipeline of proprietary products in development for the women's healthcare
market including an intravaginal ring drug delivery system (IVR) that is
designed to deliver a consistent dose of a wide range of medicines over extended
periods of time. Galen has lodged its first marketing authorization application
in the UK, for the estradiol-based IVR for hormone replacement therapy (HRT),
and anticipates the UK launch of the product within the next six to nine months,
with the European launch expected to follow. A phase III trial for the estrogen
IVR for HRT is in process in the U.S.
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WARNER CHILCOTT, PLC
Warner Chilcott is a developer and marketer of prescription pharmaceutical
products in the United States, primarily focused on the women's health
therapeutic category. Through its national sales force of over 220
representatives, Warner Chilcott markets branded pharmaceutical products,
including prenatal vitamins, urinary tract analgesics, oral contraceptives, and
hormone replacement therapy products, directly to physician specialists across
the country, particularly obstetrician/gynecologists and urologists. The
Company's principal offices are in Dublin, Ireland and Rockaway, New Jersey.
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COMPANY CONTACT:
WARNER CHILCOTT
Diane M. Cady, Senior Vice President, Investor Relations & Corporate
Communications
(973) 442-3327 or (800) 521-8813
