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
January 26, 1999
Date of Report (Date of earliest event reported)
WARNER-LAMBERT COMPANY
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
1-3608 22-1598912
(Commission File Number) (IRS Employer Identification No.)
201 Tabor Road, Morris Plains, New Jersey 07950-2693
(Address of principal executive offices) (Zip Code)
(973) 540-2895
(Registrant's telephone number, including area code)
Item 5. Other Events.
Warner-Lambert Company, a Delaware corporation (the
"registrant" or "Warner-Lambert"), WLC Acquisition Corporation, a
California corporation and a wholly-owned subsidiary of Warner-
Lambert ("Merger Sub"), and Agouron Pharmaceuticals, Inc., a
California corporation ("Agouron"), have entered into an
Agreement and Plan of Merger, dated as of January 26, 1999 (the
"Merger Agreement"), whereby Merger Sub will be merged with and
into Agouron, with Agouron as the surviving entity (the
"Merger").
As a result of the Merger, each outstanding share of
Agouron Common Stock will be converted into shares of common
stock, par value $1.00 per share, of Warner-Lambert ("Warner-
Lambert Common Stock") at an exchange rate equal to $60.00
divided by the average of the closing sales prices of Warner-
Lambert Common Stock on the New York Stock Exchange Composite
Transactions Tape on each of the 10 consecutive trading days up
to and including the second immediately preceding trading day
prior to the date of Agouron's Stockholders Meeting. In no event
will the exchange rate be more than .9300, or less than .8108, of
a share of Warner-Lambert Common Stock for each share of Agouron
Common Stock. Each outstanding option for shares of Agouron
Common Stock will be converted into options for the number of
shares of Warner-Lambert Common Stock that would have been
received if such options and warrants had been exercised
immediately prior to the Merger.
The closing of the Merger is subject to certain
conditions, including the approval of the common stockholders of
Agouron and the receipt of customary antitrust clearance.
Concurrently with the execution and delivery of the
Merger Agreement, Agouron and the registrant entered into a Stock
Option Agreement (the "Stock Option Agreement"). Under the Stock
Option Agreement, Warner-Lambert does not have the right to
acquire any shares of Agouron Common Stock unless certain
specified events occur. If the Option were to become
exercisable, Warner-Lambert would be entitled to purchase upon
exercise of the Option (subject to receipt of any necessary
regulatory approvals) up to approximately 19.9% of the
outstanding shares of Agouron Common Stock. The Stock Option
Agreement provides Warner-Lambert with the right, in certain
circumstances, to require Agouron to repurchase the option and
any shares acquired by exercise of the option and with the right
to require Agouron to register the Agouron Common Stock acquired
by or issuable upon exercise of the option under the Securities
Act of 1933, as amended.
In connection with the Merger Agreement, Agouron's
Board of Directors has resolved to amend its Amended and Restated
Rights Agreement dated as of November 10, 1998 in order to render
the rights issued thereunder inapplicable to the Merger
Agreement, the Stock Option Agreement and the transactions
contemplated thereby.
A copy of the press release, dated January 26, 1999,
issued jointly by Warner-Lambert and Agouron, relating to the
above-described transaction is attached as an exhibit to this
report and is incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits.
The following exhibit is filed with this report:
Exhibit Number Description
99 Press release of the registrant
and Agouron, issued January 26,
1999, regarding the Merger.
SIGNATURE
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.
WARNER-LAMBERT COMPANY
Joseph E. Lynch
By: -----------------------
Name: Joseph E. Lynch
Title: Vice President and
Controller
Dated: January 28, 1999
EXHIBIT INDEX
Exhibit
Number
Description
Page
99
Press release of the registrant and
Agouron, issued January 26, 1999,
regarding the Merger.
EXHIBIT 99
FOR IMMEDIATE RELEASE:
Warner-Lambert
Media Contact: Investor Relations Contact:
Carol Goodrich (973) 540-3620 George Shields (973) 540-6916
John Howarth (973) 540-4874
Agouron
Media and Investor Relations Contact
Donna Nichols (619) 622-3009
WARNER-LAMBERT TO ACQUIRE AGOURON
FOR $2.1 BILLION IN STOCK
Two Industry Leaders to Build Complementary Capabilities in Drug
Discovery
MORRIS PLAINS, NJ, January 26, 1999 -- Warner-Lambert Company
(NYSE: WLA) today announced a definitive agreement to acquire
Agouron Pharmaceuticals, Inc. (Nasdaq: AGPH), an integrated
pharmaceutical company committed to the discovery and development
of innovative therapeutic products for treatment of cancer, AIDS
and other serious diseases. Agouron achieved total revenues of
$467 million for the fiscal year ended June 30, 1998.
Under the terms of the agreement, which is valued at
approximately $2.1 billion, each share of Agouron stock will be
exchanged for approximately $60 worth of Warner-Lambert stock
within a range of .8108 to .93 shares of Warner-Lambert common
stock for each share of Agouron common stock. The exact exchange
rate will be based on the average price of Warner-Lambert stock
prior to closing. The transaction will be accounted for as a
pooling of interests and is intended to qualify as a tax-free
exchange. It will require the approval of Agouron's shareholders
and the customary regulatory approvals. The transaction will not
require Warner-Lambert shareholder approval and is expected to be
non-dilutive to the Company's future earnings. Under certain
circumstances, if the merger agreement is terminated, Warner-
Lambert has the option to purchase up to 19.9 percent of
Agouron's common stock and has the right to a fee of at least $60
million.
Melvin R. Goodes, Warner-Lambert chairman and chief
executive officer, said, "The acquisition of Agouron is
consistent with our long-term strategy to supplement our
internally generated growth with alliances, acquisitions,
licensing agreements and other creative partnerships. In taking
this action, we believe we have strategically enhanced our
prospects for long-term growth without sacrificing our ability to
meet expectations of superior near-term earnings performance. We
believe that by concentrating our resources and expanding into
important new therapeutic categories, we will be well-positioned
to continue our impressive growth in the pharmaceutical sector,
even in the face of challenging market conditions and an
increasingly global business environment."
Peter Johnson, Agouron president and chief executive
officer, said, "This is a carefully considered strategic move to
maximize Agouron's long-term ability to bring forward new drugs
for patients confronted by cancer, viral infections, and diseases
of the eye and, at the same time, to contribute its scientific
strengths to Warner-Lambert's efforts to discover innovative
drugs in other important therapeutic fields. Our Board
unanimously concluded that this transaction is in the best
interests of shareholders, as it should provide prospects for
further value enhancement based on Warner-Lambert's impressive
performance record."
Through this transaction, Warner-Lambert will markedly
augment its new product pipeline and will significantly expand
its presence in important therapeutic areas such as anti-virals
and oncology. In addition to gaining access to several promising
late-stage compounds, the acquisition immediately provides
Warner-Lambert with the market leading product for the treatment
of HIV in adults and children. VIRACEPT(R) (nelfinavir
mesylate), Agouron's first commercial product, is an HIV protease
inhibitor that received marketing clearance from the U.S. Food
and Drug Administration in 1997.
"Warner-Lambert's acquisition of Agouron is another
demonstration of our commitment to sustain our position among the
fastest growing companies in the pharmaceutical industry. We
have already made significant progress by more than doubling our
worldwide pharmaceutical business in less than two years. In
1996, our worldwide pharmaceutical revenues totaled $2.5 billion.
By the end of 1999, we expect they will exceed $7 billion. This
merger is intended to strengthen our research and
development capabilities through access to complementary
technologies such as
structure-based drug design," said Anthony H. Wild, president,
pharmaceutical sector of Warner-Lambert.
Warner-Lambert and Agouron agreed that this transaction will
enhance both companies' capabilities in drug discovery. Agouron
will gain global reach in development and commercial
infrastructure, which is of particular importance with several
new product launches anticipated in the next few years. Agouron
will also benefit from additional resources that will permit it
to expand its innovative approach to rational drug design.
Agouron, based in La Jolla, California, is an integrated
pharmaceutical company engaged in the discovery, development and
commercialization of drugs for treatment of cancer, viral
diseases, and diseases of the eye. The Company is distinguished
as an innovator and leader in the design of novel synthetic drugs
based upon the molecular structures of target proteins that play
key roles in human disease. It has integrated this technology
with high-throughput screening of combinatorial chemical
libraries. Agouron's anti-HIV drug, VIRACEPT, marketed in North
America by the Company's own commercial organization, is the
market leader of drugs for treatment of HIV infection and AIDS in
the United States. The company employs more than 1000 people of
whom approximately 700 are engaged in research and development.
Warner-Lambert is a worldwide company devoted to
discovering, developing, manufacturing, and marketing quality
pharmaceutical, consumer health care, and confectionery products.
Warner-Lambert employs more than 40,000 people worldwide.
Statements made in this press release that state "we
believe," or otherwise state the Company's 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 the Company's Annual
Report on Form 10K for the year ended December 31, 1997 filed
with the U.S. Securities and Exchange Commission. For a copy of
this filing, please call the media or investor relations contacts
listed on this press release.
Note to Editors: Warner-Lambert's news releases can be found
on our Web site at www.warner-lambert.com or through Business
Wire at www.businesswire.com/cnn/wla/htm. Agouron's news
releases can be found on the Company's Web site at
www.agouron.com.
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