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
<PAGE>
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.
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<PAGE>
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-
<PAGE>
EXHIBIT INDEX
(99.1) Press Release, dated November 8, 1999, with respect to
the Joint Analyst Presentation
(99.2) Joint Analyst Presentation
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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)
<PAGE>
- - 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-
<PAGE>
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-
AmericanWarner, Inc.
-----------------------
Leadership and Momentum
in Pharmaceuticals
and
Consumer Healthcare
-----------------------
<PAGE>
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-
<PAGE>
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-
<PAGE>
AMERICANWARNER: LEADERSHIP GROWTH RATES
<TABLE>
<CAPTION>
1999E 2000E 2001E 2002E CAGR ('99-'02)
----- ----- ----- ----- --------------
<S> <C> <C> <C> <C> <C>
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%
</TABLE>
20% Net income growth with $1.2
billion in cost synergies
-4-
<PAGE>
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-
<PAGE>
PHARMACEUTICALS: NEAR-TERM PIPELINE
Estimated Launch Dates
<TABLE>
<CAPTION>
1999 2000 2001 2002
----------------- ------------------- ------------------- -------------------
<S> <C> <C> <C>
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
</TABLE>
* Approved/Approvable
Peak year sales estimates from analyst reports
Steady stream of innovative new products
-6-
<PAGE>
A ROBUST PRODUCT PIPELINE
Number of Compounds Under Development
<TABLE>
<CAPTION>
Pre-
IND Tract Phase I Phase II Phase III registration Total
--------- ------- --------- --------- ------------ -----
<S> <C> <C> <C> <C> <C> <C>
AHP 7 9 13 14 7 50
WLA 6 2 9 7 6 30
American Warner 13 11 22 21 13 80
</TABLE>
-7-
<PAGE>
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-
<PAGE>
BIOTECH CAPABILITIES
<TABLE>
<CAPTION>
AMERICAN WARNER
---------------
Strong network of biotechs
Genetics with outstanding
Agouron Institute Immunex capabilities
<S> <C> <C> <C> [Right arrow] <C>
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
</TABLE>
-9-
<PAGE>
AMERICANWARNER: LEADING PHARMACEUTICALS
<TABLE><CAPTION>
Warner-Lambert Top Drugs American Home Products Top Drugs
- ---------------------------------------------------- --------------------------------------------
<S> <C> <C> <C> <C> <C>
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
</TABLE>
Strong combined portfolio with $12 billion in major products
-10-
<PAGE>
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-
<PAGE>
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-
<PAGE>
CONSUMER HEALTHCARE: WORLD-CLASS BRANDS
<TABLE>
<CAPTION>
Warner-Lambert American Home Products
- ------------------------------------------------ ---------------------------------------------
Category 1999 Sales Category 1999 Sales
- ------------------------------------------------ ---------------------------------------------
<S> <C> <C> <C> <C> <C>
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
</TABLE>
-13-
<PAGE>
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-
<PAGE>
$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-
<PAGE>
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-
<PAGE>
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-
<PAGE>
THE AMERICANWARNER COMBINATION: LEADERSHIP GROWTH RATES WITH FURTHER
UPSIDE
<TABLE>
<CAPTION>
1999E 2000E 2001E 2002E CAGR ('99-'02)
-------- ------- ------- ------- --------------
<S> <C> <C> <C> <C> <C>
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%
</TABLE>
-18-
<PAGE>
ILLUSTRATIVE VALUE CREATION
<TABLE>
<CAPTION>
NEAR-TERM
($200 million in 2000E Cost Synergies)
Market Capitalization
------------------------------------
AmericanWarner
2000 American Warner American Illustrative
P/E Home Lambert Warner Value Creation
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
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
</TABLE>
-19-
<PAGE>
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-
