Retrophin Proposes Acquisition of Transcept for $4.00 Per Share
NEW YORK -- September 18, 2013
Retrophin, Inc. (OTCQB:RTRX) today announced that it has made a proposal to
the Board of Directors of Transcept Pharmaceuticals, Inc. (Nasdaq:TSPT) to
acquire all of the shares of Transcept common stock that Retrophin does not
own for $4.00 per share in cash. Retrophin’s proposal is conditioned on the
completion of cursory due diligence and other customary provisions.
Retrophin’s proposal is not subject to a financing condition.
Last week, Retrophin delivered a letter to Transcept’s Board of Directors
proposing to acquire all of the outstanding common stock of Transcept for
$3.50 per share in cash. Transcept’s Board of Directors rejected Retrophin’s
proposal and adopted a Tax Benefit Preservation Plan (a/k/a a “Poison Pill”)
that prevents stockholders from acquiring more than 4.99% of Transcept. In
recent weeks, three of Transcept’s major stockholders have publicly stated
their disapproval of Transcept’s current strategy. Retrophin’s proposed
all-cash offer would provide an immediate exit for Transcept’s stockholders at
a 20% premium to Transcept’s current stock price.
Retrophin expressed its disappointment that the Board of Directors and
management of Transcept have not been willing to engage with Retrophin to
ascertain the benefits of the proposal. “Our proposal represents an attractive
premium to Transcept’s trading performance, and we believe that the proposal
offers a compelling opportunity for Transcept’s stockholders, particularly in
light of Transcept’s risky and controversial acquisition strategy,” stated
Martin Shkreli, Chief Executive Officer of Retrophin. “We hope that
Transcept’s Board of Directors will respect its stockholders’ wishes and
quickly commence discussions with us regarding the proposed transaction.”
Retrophin’s letter called on the Board of Directors of Transcept to engage in
discussions with Retrophin and to provide it with access to selected due
diligence in order to enter into a transaction no later than September 30,
2013 (see letter attached).
Retrophin is a pharmaceutical company focused on the discovery and development
of drugs for the treatment of debilitating and often life-threatening diseases
for which there are currently no viable patient options. The Company is
currently focused on several catastrophic diseases affecting children,
including Focal Segmental Glomerulosclerosis (FSGS), Pantothenate
Kinase-Associated Neurodegeneration (PKAN), Duchenne Muscular Dystrophy and
others. Retrophin’s lead compound, RE-021, is scheduled to begin enrollment in
a potentially pivotal Phase 2 clinical trial for FSGS during 2013. For
additional information, please visit www.retrophin.com.
This press release contains “forward-looking statements” as that term is
defined in the Private Securities Litigation Reform Act of 1995, regarding the
research, development and commercialization of pharmaceutical products. Such
forward-looking statements are based on current expectations and involve
inherent risks and uncertainties, including factors that could delay, divert
or change any of them, and could cause actual outcomes and results to differ
materially from current expectations. No forward-looking statement can be
guaranteed. Forward-looking statements in the press release should be
evaluated together with the many uncertainties that affect the Company’s
business. The Company undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information, future
events, or otherwise.
777 Third Avenue, 22^nd Floor
New York, NY 10017
September 18, 2013
The Board of Directors
Transcept Pharmaceuticals, Inc.
1003 W. Cutting Blvd., Suite #110
Point Richmond, California 94804
Members of the Board:
I am writing on behalf of Retrophin, Inc. (“Retrophin”) to express our
disappointment that the Board of Directors of Transcept Pharmaceuticals, Inc.
(“Transcept”), rejected our all-cash proposal to acquire all of Transcept’s
outstanding common stock at a price of $3.50 per share, that was outlined in
our September 10^th letter to you. Rather than discuss our proposal or attempt
to negotiate for a greater premium for Transcept’s stockholders, Transcept’s
Board of Directors approved a Tax Benefit Preservation Plan, a/k/a a “Poison
Pill”. We are puzzled by that decision, particularly due to (i) the 20%
premium to Transcept’s current market price that our proposal represents and
(ii) the opposition expressed by Transcept’s stockholders to Transcept’s risky
and highly speculative stated strategy to grow Transcept through acquisitions.
Although Transcept rejected our initial proposal, we are formally proposing to
Transcept’s Board of Directors that Retrophin acquire all of the outstanding
shares of common stock of Transcept for $4.00 per share in cash.
Notwithstanding Transcept’s lack of engagement with us and the implementation
of its Poison Pill, we and our advisors have continued to analyze Transcept’s
publicly available information and assess the potential benefits of an
acquisition of Transcept. As we mentioned in our September 10^th letter, due
to the significant value that we believe that Transcept represents, we may be
willing to further increase our proposed purchase price if (i) we are allowed
the opportunity to conduct due diligence and such diligence validates certain
understandings about Transcept and its prospects and (ii) we are able to
negotiate a definitive acquisition agreement containing customary
representations, warranties, covenants and closing conditions. We and our
advisors are prepared to begin the due diligence process immediately.
Additionally, we continue to support, and are willing to participate in, an
open and efficient auction process managed by Transcept’s financial advisor.
Despite public and private protests from Transcept’s largest stockholders,
Transcept’s Board of Directors continues to pursue a strategy of searching for
an acquisition to revitalize Transcept. Our proposed all-cash offer provides
an immediate exit for Transcept stockholders at an attractive premium. As a
stockholder of Transcept, we believe that our proposed transaction properly
recognizes the true value of Transcept.
If Transcept is interested in pursuing our proposal in order to benefit its
stockholders, we and our representatives are prepared to move quickly towards
definitive documentation. Our proposal will remain open until September 30,
2013, which we believe to be an adequate time to perform due diligence and
enter into an agreement if Transcept is willing to engage itself and commit
the necessary resources.
We intend to make this proposal public promptly after the delivery of this
letter because we believe that Transcept’s stockholders have the right to
consider this improved proposal, to learn about the refusal of Transcept’s
Board of Directors to engage us, and to understand that the Board of Directors
is placing our proposal at risk by refusing to engage with us on a timely
We continue to stand ready to meet with the Board of Directors and its
advisors immediately to discuss our proposal and to devote all necessary
resources to work to consummate this transaction by November 1, 2013.
Very truly yours,
/s/ Martin Shkreli
Chief Executive Officer
Marc Panoff, 917-261-3684
Rx Communications Group
Paula Schwartz, 917-322-2216
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