King Pharmaceuticals, Inc.
UNITED STATES
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): July 5, 2006
King Pharmaceuticals, Inc.
(Exact name of registrant as specified in its charter)
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Tennessee
(State or other jurisdiction
of incorporation)
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001-15875
(Commission File Number)
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54-1684963
(I.R.S. Employer Identification No.) |
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501 Fifth Street, Bristol, Tennessee
(Address of principal executive offices)
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37620
(Zip Code) |
Registrants telephone number, including area code: (423) 989-8000
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
TABLE OF CONTENTS
ITEM 1.01 Entry into a Material Definitive Agreement.
On July 5, 2006, King Pharmaceuticals, Inc. (the Company) entered into an Amended and
Restated Copromotion Agreement (the Amended Agreement), effective January 1, 2006, with
Wyeth, acting through
its Wyeth Pharmaceuticals Division (Wyeth), related to the promotion and marketing of the
Companys Altace® (ramipril) product. Altace® is an angiotensin converting enzyme, or ACE,
inhibitor that significantly reduces the rates of stroke, myocardial infarction (heart attack) and
death from cardiovascular causes in a broad range of high-risk cardiovascular patients.
The
Amended Agreement amends and restates the Copromotion Agreement that the parties entered into,
effective June 22, 2000 (the Prior Agreement), pursuant to which the Company and Wyeth
have been jointly marketing Altace® in the United States, its
territories and possessions, the District of Columbia and the
Commonwealth of Puerto Rico
(the Territory). The Amended Agreement provides for an orderly wind-down of Wyeths
involvement in the promotion and marketing of Altace®. Effective January 1, 2007, in accordance
with the terms and conditions of the Amended Agreement, the Company will assume full
responsibility for selling, marketing and promoting Altace®. For the remainder of 2006, Wyeths sales force
will continue to promote Altace® with the Company in the Territory.
For 2006, the Company will pay Wyeth a copromotion fee based on a percentage of Altace® net sales
in 2006 as follows: (i) 15% of Altace® net sales that are less than or equal to $165 million; (ii)
42.5% of Altace® net sales that are in excess of $165 million and less than or equal to $465
million; and (iii) 52.5% of Altace® net sales that are in excess of $465 million and less than or
equal to $585 million. Accordingly, the maximum copromotion fee the Company would pay Wyeth for
2006 totals $215 million. For years following 2006, until the Agreement expires in 2010, the
Company will pay Wyeth a restructured annual fee based on a percentage of Altace® net sales,
subject to annual payment limits, as set forth in the following table.
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Percentage of Altace® Net |
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Year Ending |
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Sales on which the Annual Fee |
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December 31, |
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is Based |
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Annual Fee Cap |
2007 |
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30 |
% |
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$178.5 million |
2008 |
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22.5 |
% |
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$134.0 million |
2009 |
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14.2 |
% |
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$84.5 million |
2010 |
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25 |
% |
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$5.0 million |
For purposes of calculating the annual fee, Altace® net sales will not include any Altace®
combination products but will include all formulations of Altace®
having ramipril as the sole active ingredient. Wyeth will continue to pay its share of marketing expenses for the remainder
of 2006. In addition, Wyeth will pay the Company a $20 million milestone fee if a specified net
sales threshold is achieved in 2008.
The
Company will continue to be responsible for the manufacture and distribution of Altace®. Each party will
bear all of its own personnel costs.
Further, completion of any additional studies of Altace® which are or may be required to obtain
pediatric labeling in the Territory are to be performed at the
Companys sole discretion and expense. The
costs of any studies performed pursuant to the Prior Agreement which
were approved by both parties shall be shared equally between the parties.
The
Amended Agreement also forever releases and discharges all disputes
between the parties prior to the execution of the Amended Agreement,
notwithstanding certain rights and obligations of the parties under
the Amended Agreement, and it obligates them to dismiss with prejudice the case between the parties
currently pending in the United States District Court for the Eastern District of New York.
A copy of the press release issued in connection with the parties announcement of their entrance
into the Amended Agreement is being furnished pursuant to this Item 1.01 as Exhibit 99.1 to this
Current Report on Form 8-K.
ITEM 8.01 Other Events.
As a
result of the Companys assuming, effective January 1, 2007, full responsibility for selling
and marketing Altace® under the Amended Agreement, the Company plans to establish an 88-person specialty
cardiovascular sales force to assist its existing
commercial team in pursuing and building on the Companys marketing
strategy. The Company expects to incur additional expenses in
connection with transition activities and to make higher levels of
investment in marketing.
ITEM 9.01 Financial Statements and Exhibits.
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Exhibit |
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Number |
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Description |
99.1 |
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Press release issued jointly by King Pharmaceuticals, Inc. and Wyeth dated July 6, 2006. |
The press release is being furnished pursuant to Item 1.01 of this Current Report on Form 8-K and
shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as
amended (the Exchange Act) or otherwise subject to the liabilities of that Section, nor
shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as
amended, or the Exchange Act.
SIGNATURES
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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King Pharmaceuticals, Inc.
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By: |
/s/ Brian A. Markison
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Brian A. Markison |
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President and Chief Executive Officer |
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Date: July 7, 2006
EXHIBIT INDEX
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Exhibit |
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Number |
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Description |
99.1 |
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Press release issued jointly by King Pharmaceuticals, Inc. and Wyeth dated July 6, 2006. |