Transcept Pharmaceuticals, Inc. Adopts Tax Benefit Preservation Plan

     Transcept Pharmaceuticals, Inc. Adopts Tax Benefit Preservation Plan

PR Newswire

POINT RICHMOND, Calif., Sept. 13, 2013

POINT RICHMOND, Calif., Sept. 13, 2013 /PRNewswire/ --Transcept
Pharmaceuticals, Inc. (NASDAQ: TSPT) announced today that its Board of
Directors has adopted a tax benefit preservation plan to help preserve the
value of its net operating losses and other deferred tax benefits. As of
December 31, 2012, Transcept had cumulative net operating loss carryforwards
of approximately $78 million, which can be utilized in certain circumstances
to offset future U.S. taxable income.

Adoption of the tax benefit preservation plan is among multiple actions the
company is taking to ensure Transcept is positioned to achieve its strategic
objectives. These actions also include continuing discussions with Purdue
Pharma L.P., our U.S. marketing partner for Intermezzo, regarding strategies
to maximize the performance and value of the product.

The tax benefit preservation plan was adopted to protect an important
Transcept asset that may have meaningful value to all Transcept stockholders.
The value of these tax benefits would be substantially limited if it were to
experience an "ownership change" as defined under Section 382 of the Internal
Revenue Code. In general, an ownership change would occur if stockholders that
own (or are deemed to own) at least five percent or more of the outstanding
Transcept common stock increased their cumulative ownership in Transcept by
more than 50 percentage points over their lowest ownership percentage within a
rolling three-year period. The tax benefit preservation plan reduces the
likelihood that changes in the Transcept investor base would limit future use
of its tax benefits, which would significantly impair the value of the
benefits to all stockholders. Transcept believes that no ownership change as
defined in Section 382 has occurred as of the date of this press release.

The Board of Directors adopted the tax benefit preservation plan after
considering, among other matters, the estimated value of the tax benefits, the
potential for diminution upon an ownership change and the risk of an ownership
change occurring.

As part of the plan, the Transcept Board of Directors declared a dividend of
one preferred stock purchase right, which are referred to as "rights," for
each outstanding share of Transcept common stock. The dividend will be
payable to holders of record as of the close of business on September 27,
2013. Any shares of Transcept common stock issued after the record date will
be issued together with the rights.

The rights will be exercisable if a person or group, without the approval of
the Transcept Board, acquires, or obtains the right to acquire, beneficial
ownership of 4.99 percent or more of the Transcept common stock. The rights
also will be exercisable if a person or group that already beneficially owns
4.99 percent or more of the Transcept common stock, without Board approval,
acquires additional shares (other than as a result of a dividend or a stock
split). Existing Transcept stockholders that, as of September 13, 2013,
beneficially own in excess of 4.99 percent of the common stock will be
"grandfathered in" at their current ownership level. If the rights become
exercisable, all holders of rights, other than the person or group triggering
the rights, will be entitled to purchase Transcept common stock at a 50
percent discount. Rights held by the person or group triggering the rights
will become void and will not be exercisable.

Beneficial ownership of shares is calculated under the plan in accordance with
the applicable rules of Section 382 of the Internal Revenue Code. The
calculations are complex, and stockholders should contact Transcept if they
have any questions regarding their ownership, the 4.99 percent trigger amount
or any other matters related to the plan.

The Board of Directors has established procedures by which it will consider
requests by stockholders to exempt certain acquisitions of Transcept common
stock from the plan if the Board determines that doing so would not limit or
impair the availability of the tax benefits or is otherwise in the best
interests of Transcept.

The rights will expire on September 12, 2014, unless Transcept stockholders
approve the plan prior to that date, in which case the rights will expire on
September 12, 2016. The rights may also expire on an earlier date upon the
occurrence of certain events, including a determination by the Board that the
tax plan is no longer needed to preserve the tax benefits because of
legislative changes or if the Board determines that the tax benefits have been
fully used or are no longer available under Section 382 or that an ownership
change would not materially impair or limit the tax benefits. The plan was not
adopted as an anti-takeover measure and once the deferred tax assets have been
fully used, the Board of Directors intends to terminate the plan. The rights
may also be redeemed, exchanged or  terminated prior to their expiration.

The distribution of the rights is not taxable to stockholders. The rights will
initially trade together with Transcept common stock and the Transcept Board
may terminate the plan or redeem the rights prior to the time the rights are
triggered. Further details about the plan will be contained in a Form 8-K to
be filed with the Securities and Exchange Commission by Transcept.

Leerink Swann LLC is acting as financial advisor to Transcept with respect to
the adoption of the tax benefit preservation plan.

About Transcept, Inc.
Transcept Pharmaceuticals, Inc. is a specialty pharmaceutical company focused
on the development and commercialization of proprietary products that address
important therapeutic needs in the field of neuroscience. Intermezzo®
(zolpidem tartrate) sublingual tablet C-IV is the first FDA approved Transcept
product. Purdue holds commercialization and development rights for Intermezzo
in the United States. For further information about Transcept, please visit For information about Intermezzo, please visit

Forward Looking Statements
This press release contains forward-looking statements that involve
substantial risks and uncertainties. All statements, other than statements of
historical facts, included in this press release regarding our strategy,
future operations, future financial position, future revenues, projected
expenses, prospects, plans and objectives of management are forward-looking
statements. Examples of such statements include, but are not limited to,
statements relating to the following: the potential value of Transcept's net
operating loss carryforwards and the ability of the net operating loss
carryforwards to be utilized; our expectations regarding Intermezzo's
commercial potential; and Purdue's plans to commercialize Intermezzo,
including our discussions with Purdue regarding strategies to maximize the
performance and value of Intermezzo;. Transcept may not actually achieve the
plans, carry out the intentions or meet the expectations or projections
disclosed in our forward-looking statements and you should not place undue
reliance on these forward-looking statements. Actual results or events could
differ materially from the plans, intentions, expectations and projections
disclosed in the forward-looking statements. Various important factors could
cause actual results or events to differ materially from the forward-looking
statements that Transcept makes, including the following: achieving acceptance
of Intermezzo by physicians, patients and third party payors; our dependence
on our collaboration with Purdue; supplying sufficient quantities of
Intermezzo from third party manufacturers and suppliers to meet anticipated
market demand; the impact of competitive products and the market for
Intermezzo generally; obtaining, maintaining and protecting regulatory
exclusivity and intellectual property protection for Intermezzo; and the
ability of Transcept to obtain additional funding, if needed, to support its
business activities. These and other risks are described in greater detail
in the "Risk Factors" section of Transcept periodic reports filed with the
SEC. Forward-looking statements do not reflect the potential impact of any
future in-licensing, collaborations, acquisitions, mergers, dispositions,
joint ventures, or investments Transcept may enter into or make. Transcept
does not assume any obligation to update any forward-looking statements,
except as required by law.


Transcept Pharmaceuticals, Inc.
Leone Patterson
Vice President, Chief Financial Officer
(510) 215-3500

SOURCE Transcept Pharmaceuticals, Inc.

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