SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported): FEBRUARY 28, 1998
WATSON PHARMACEUTICALS, INC.
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(Exact name of registrant as specified in its charter)
NEVADA 0-20045 95-3872914
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File number) Identification No.)
311 BONNIE CIRCLE
CORONA, CA 91720
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (909) 270-1400
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Former name or former address, if changed since last report
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ITEM 2. Acquisition or Disposition of Assets.
On February 27, 1998, Watson Pharmaceuticals, Inc. (the "Registrant") and
Hoechst Marion Roussel ("HMR") finalized an agreement under which the Registrant
acquired all of the outstanding stock of The Rugby Group, Inc. ("Rugby"), HMR's
U.S. off-patent drug subsidiary. The transaction also included terms whereby HMR
will manufacture certain off-patent products for the Registrant. The acquisition
was accounted for as a purchase, and the results of Rugby from the date of
acquisition forward will be recorded in the Registrants consolidated financial
statements. Immediately after the acquisition, Rugby became a wholly owned
subsidiary of the Registrant.
The consideration paid by the Registrant in connection with the acquisition
consisted of an initial cash payment of $67.5 million, future royalty payments
on sales of certain Rugby products and a contingent upside-sharing payment based
on future operating results. The initial cash payment was made from cash on
hand. The Registrant expects to make future contingent payments from a
combination of cash on hand and future operating cash flows. The Registrant
acquired Rugby and its subsidiaries, including Chelsea Laboratories, Rugby's
product development group. Major assets obtained in the acquisition include
Rugby's approximately 35 owned products, licenses of several HMR generic
products, and sales and marketing capabilities for pharmaceutical products.
The material agreements entered into by the Registrant in connection with this
transaction were filed as Exhibits 10.27, 10.27(a), 10.27(b), 10.28 and 10.29 to
the Registrant's 1997 Annual Report on Form 10-K on March 16, 1998. A copy of
the joint press release of the Registrant and HMR, dated March 2, 1998 is
attached hereto as Exhibit 99.1.
ITEM 7. Exhibits.
(c) Exhibits
10.1 Stock Purchase Agreement among the Registrant, Hoechst, Marion
Roussel, Inc. and Marisub, Inc. dated August 25, 1997, filed as
Exhibit 10.27 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1997 and hereby incorporated by
reference.
10.2 Amendment to Stock Purchase Agreement among the Registrant, Hoechst,
Marion Roussel, Inc. and Marisub, Inc. dated November 26, 1997,
filed as Exhibit 10.27(a) to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1997 and hereby
incorporated by reference.
10.3 Second Amendment to Stock Purchase Agreement by and among the
Registrant, Hoechst, Marion Roussel, Inc. and Marisub, Inc. dated
February 27, 1998, filed as Exhibit 10.27(b) to the Registrant's
Annual Report on Form 10-K for the fiscal year ended December 31,
1997 and hereby incorporated by reference.
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10.4 Supply and License Agreement by and between Hoechst, Marion Roussel,
Inc. and The Rugby Group, Inc. dated February 27, 1998, filed as
Exhibit 10.28 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1997 and hereby incorporated by
reference.
10.5 Contract Manufacturing Agreement by and between Hoechst, Marion
Roussel, Inc. and The Rugby Group, Inc. dated February 27, 1998,
filed as Exhibit 10.29 to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1997 and hereby
incorporated by reference.
99.1 Joint Press Release of Watson Pharmaceuticals, Inc. and Hoechst
Marion Roussel relating to the acquisition by the Registrant of all
outstanding stock of The Rugby Group, Inc.
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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 thereunto duly authorized.
Dated: March 16, 1998 WATSON PHARMACEUTICALS, INC.
By: /s/ ALLEN CHAO
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Name: Allen Chao, Ph.D
Title: Chairman and Chief Executive
Officer
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WATSON PHARMACEUTICALS, INC.
EXHIBIT INDEX
FORM 8-K
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT PAGE
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99.1 Joint Press Release of Watson Pharmaceuticals, Inc. and
Hoechst Marion Roussel relating to the acquisition by
Watson of all outstanding stock of The Rugby Group, Inc.
EXHIBIT 99.1
FOR: WATSON PHARMACEUTICALS, INC. AND HOECHST MARION ROUSSEL
APPROVED BY: Allen Chao, Ph.D.
Chairman and Chief Executive Officer
Watson Pharmaceuticals, Inc.
(909) 270-1400
CONTACTS: Hoeschst Marion Roussel
Charles F. Rouse III
(816) 966-4052
Morgan-Walke Associates, Inc.
Carolyn Bass, Jim Byers, Doug Sherk
(415) 296-7383
FOR IMMEDIATE RELEASE Sandra Badurina, Deborah Szajngarten
(212) 850-5600
WATSON PHARMACEUTICALS COMPLETES
ACQUISITION OF THE RUGBY GROUP
Acquisition to Complement Watson's Off-Patent Product Line
CORONA, Calif, and KANSAS CITY, Mo., March 2, 1998-- Watson
Pharmaceuticals, Inc. (NYSE:WPI) and Hoechst Marion Roussel, the pharmaceutical
company of Hoechst AG (NYSE:HOE), today jointly announced that Watson has
completed its acquisition of The Rugby Group, Inc. Hoeschst Marion Roussel's
U.S. generic drug subsidiary.
Full financials details were not disclosed; however, the agreement
included an initial payment of $67.5 million, contingent payments on certain
products and an upside-sharing payment based on certain future operating
results. The agreement also included terms whereby Hoechst Marion Roussel will
manufacture off-patent products for Watson.
Under the terms of the agreement, Watson acquired Rugby and its
subsidiaries, including Chelsea Laboratories, Rugby's product development group.
Major assets obtained by Watson in the acquisition include Rugby's approximately
35 owned products, license of several Hoechst Marion Roussel generic products,
and sales and marketing capabilities for pharmaceutical products.
-continued-
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"The acquisition of Rugby is consistent with one of our key strategies
of expanding our off-patent product line. Rugby's numerous owned and licensed
products provide a strong complement to Watson's existing product line, "stated
Dr. Allen Chao, Chairman and Chief Executive Officer of Watson. "The combination
of Rugby's existing product line, its product development pipeline, and its
well-established sales and telemarketing capability enhances Watson's position
in the pharmaceutical industry."
The Securities and Exchange Commission (SEC) encourages companies to
disclose forward looking information so that investors can better understand a
company's future prospects and make informed investment decisions. Due to
changing market conditions, product competition, the nature of product
development and regulatory approval processes, the achievement of
forward-looking statements contained in this press release are subject to risks
and uncertainties. For further details and a discussion of these risks and
uncertainties, see Watson's SEC filings, including its 1996 annual report on
Form 10-K.
Hoechst Marion Roussel USA is a leader in pharmaceutical-based health
care, dedicated to moving BEYOND MEDICINE TO HEALTH (TM) through the discovery
and delivery of prescription drugs and the provision of value-added patient
support programs. The global headquarters of Hoechst Marion Roussel is in
Frankfurt, Germany, and the North American Headquarters is in Kansas City, Mo.
Watson Pharmaceuticals, Inc. headquartered in Corona, CA, is engaged in
the development, manufacture and sale of off-patent and proprietary
pharmaceutical products.
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This and past press releases of Watson Pharmaceuticals, Inc. are available
through PR Newswire's Company News On-Call fax service at (800) 758-5804,
extension 112856 and on the internet at www.prnewswire.com.
