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Contact: Kathy Galante Burns McClellan
Corporate Communications Raj Punwaney, M.D. (investors)
(516) 222-0023 Kathy Jones, Ph.D. (media)
[email protected] (212) 213-0006
OSI PHARMACEUTICALS, INC. ADOPTS
A NEW SHAREHOLDER RIGHTS PLAN AND REDEEMS
THE RIGHTS OUTSTANDING UNDER ITS
EXISTING SHAREHOLDER RIGHTS PLAN
UNIONDALE, NEW YORK--September 27, 2000--OSI Pharmaceuticals, Inc.
(Nasdaq:OSIP) announced today that the Board of Directors of OSI
Pharmaceuticals, Inc., a Delaware corporation, adopted a new shareholder rights
plan, declared a dividend distribution of one Series SRPA Junior Participating
Preferred Stock Purchase Right on each outstanding share of its common stock,
and authorized the redemption of the rights issued pursuant to the Company's
existing shareholder rights plan. These actions were taken to ensure that all of
the Company's shareholders continue to have the fullest protection offered by a
shareholder rights plan.
The market price of the Company's common stock has increased
substantially in the past twelve months, so that the exercise price of the
existing rights is less than the recent market price of the Company's common
stock. Although the existing rights could not be exercised without the
occurrence of a triggering event (such as the announcement by a potential
acquirer of the intention to initiate a tender offer that would result in the
acquisition of 17.5% or more of the outstanding shares of the Company), the
triggering of the existing rights might cause an arbitrage opportunity that
would be disadvantageous to the Company's shareholders.
The new shareholder rights plan was not adopted in response to any
specific proposal or inquiry to acquire control of the Company, and the
Company's directors are not aware of any such contemplated takeover activity.
The Company will distribute new rights to all shareholders of record at
the close of business on September 27, 2000, the record date. As with the
existing rights, the new rights are exercisable only if: (1) any individual,
entity or group (each a "person") acquires 17.5% or more of the Company's common
stock other than through an offer for all shares of the common stock at a price
and on terms determined by the Board of Directors to be fair to all
shareholders, or (2) a person commences a tender or exchange offer for 17.5% or
more of the Company's common stock.
If a person should acquire 17.5% or more of the Company's common stock,
the new rights will be modified automatically to entitle the rightsholders
(other than the acquiring person) to purchase shares of the Company's common
stock at a 50% discount to the then market value of the common stock ("flip-in"
rights). In addition, if the Company is acquired in a merger or other
transaction after a person has acquired 17.5% or more of the Company's common
stock, the rightsholders (other than such person) will be entitled to purchase
shares of common stock of the surviving company at the same discount to market
value ("flip-over" rights).
Initially, the new rights will be represented by the Company's
existing stock certificates. Should the new rights become exercisable, the
Company will issue separate rights certificates to all holders.
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The Company can redeem the new rights at any time before (but not
after) a person has acquired 17.5% or more of the Company's common stock as
described above. The rights will expire on August 31, 2010 if not redeemed
prior to such date.
The existing rights issued and outstanding at the close of business on
the record date will be redeemed with the redemption price of $0.001 per
existing right payable on October 4, 2000. The existing rights plan will be
terminated upon the redemption of the existing rights.
A Form 8-K describing the new rights plan, redemption of the existing
rights and termination of the existing rights plan will be filed with the
Securities and Exchange Commission. A Registration Statement on Form 8-A will be
filed to register the new rights pursuant to the Securities Exchange Act of
1934, as amended. The Form 8-A will include a copy of the new rights plan
containing the full terms of the new rights plan as an exhibit. A detailed
summary of the terms of the new rights plan will be mailed on October 4, 2000 to
each shareholder of record on September 27, 2000.
OSI Pharmaceuticals is a leading drug discovery company with a
substantial portfolio of product opportunities for commercialization with the
pharmaceutical industry. OSI's research programs are focused in the areas of
cancer therapeutics, respiratory diseases, diabetes, and cosmeceuticals. OSI
utilizes a comprehensive drug discovery and development capability to facilitate
the rapid and cost-effective discovery and development of novel, small molecule
compounds against more than 40 gene targets.
This news release contains forward looking statements. These
statements are subject to known and unknown risks and uncertainties that may
cause actual future experience and results to differ materially from the
statements made. Factors that might cause such a difference include, among
others, uncertainties related to the identification of lead compounds, the
successful pre-clinical development thereof, the completion of clinical trials,
the FDA review process and other governmental regulation, pharmaceutical
collaborators' competition from other pharmaceutical companies, product pricing
and third party reimbursement, and other factors described in OSI
Pharmaceuticals' filings with the Securities and Exchange Commission.
Additional information on OSI Pharmaceuticals is available on the
World Wide Web at:
http://www.osip.com
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