SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT UNDER SECTION 14(D)(4)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 8)
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RIBAPHARM INC.
(Name of Subject Company)
RIBAPHARM INC.
(Name of Person(s) Filing Statement)
Common Stock, par value $.01 per share
(Title of Class of Securities)
762537108
(CUSIP Number of Class of Securities)
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Daniel J. Paracka
Chairman of the Board
Ribapharm Inc.
3300 Hyland Avenue
Costa Mesa, California 92626
(714) 427-6236
With copies to:
Esteban A. Ferrer, Esq.
Paul, Hastings, Janofsky & Walker LLP
1055 Washington Boulevard
Stamford, Connecticut 06901
(203) 961-7400
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of the Person(s) Filing Statement)
|_| Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
This Amendment No. 8 amends and supplements the Schedule 14D-9 filed
with the Securities and Exchange Commission (the "SEC") on June 23, 2003 and as
subsequently amended (the "Schedule 14D-9") by Ribapharm Inc., a Delaware
corporation ("Ribapharm" or the "Company"), relating to the tender offer by Rx
Acquisition Corporation, a Delaware corporation ("Purchaser"), and a
wholly-owned subsidiary of ICN Pharmaceuticals, Inc., a Delaware corporation
("ICN"), to purchase all of the outstanding shares of Ribapharm's common stock,
par value $.01 per share, which are not currently owned by ICN and its
subsidiaries (the "Publicly Held Shares"), at a purchase price of $5.60 per
share (the "Offer Price"), net to the seller in cash, without interest thereon,
upon the terms and subject to the conditions set forth in Purchaser's Offer to
Purchase, dated June 10, 2003 (the "Offer to Purchase"), and in the related
Letter of Transmittal (which together with the Offer to Purchase and any
amendments or supplements thereto collectively constitute the "Offer"). The
Offer is disclosed on a Tender Offer Statement and Rule 13e-3 Transaction
Statement filed under cover of Schedule TO with the SEC on June 10, 2003 by ICN
and as subsequently amended (the "Schedule TO"). Capitalized terms used herein
and not otherwise defined have the meanings ascribed to them in the Schedule
14D-9.
Item 9. Exhibits.
Item 9 is hereby amended and supplemented by adding the following
thereto:
(a) (6) Press Release, dated July 31, 2003.
(a) (7) Press Release, dated July 31, 2003.
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
RIBAPHARM INC.
By: /s/ Daniel J. Paracka
----------------------------------------
Name: Daniel J. Paracka
Title: Chairman of the Board of Directors
Dated: July 31, 2003
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Exhibit (a)(6)
[RIBAPHARM LOGO]
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3300 Hyland Avenue Telephone: (714) 427-6236
Costa Mesa, California 92626 Fax: (714) 641-7215
CONTACTS:
Arthur Crozier (Investor inquiries)
Innisfree M&A Incorporated
212-750-5837
acrozier@innisfreema.com
Jennifer Barfoot (Media inquiries)
Hill & Knowlton
323-966-5786
jbarfoot@hillandknowlton.com
Ribapharm Board Acknowledges Extension of ICN Tender Offer
COSTA MESA, Calif., July 31, 2003 - The Board of Directors of Ribapharm Inc.
(NYSE: RNA), acknowledged today the decision announced on July 30 by ICN
Pharmaceuticals, Inc. (NYSE: ICN) to extend the expiration date of its
unsolicited tender offer for shares of Ribapharm it does not already own to 5
p.m. (EDT) this Friday, August 1, 2003. In a press release issued on July 30,
and in related SEC filings, ICN also stated that stockholders "should not
expect" an increase in the tender offer price of $5.60 per share, and that ICN
"intends" to terminate the tender offer if an "adequate" number of shares are
not tendered by that time. On June 20, 2003, in the face of ICN's unsolicited
tender offer, the Ribapharm Board adopted a stockholder rights plan for the
purpose of preserving for Ribapharm's public stockholders Ribapharm's true
long-term value, determined that the ICN unsolicited tender offer was
inadequate, and recommended that Ribapharm's public stockholders not tender
their shares. This determination and recommendation were reaffirmed on July 20,
2003, the same date that the Board's financial advisor, Morgan Stanley & Co.
Incorporated, reiterated its opinion (subject to and based on the assumptions
and conditions set forth therein) that the $5.60 per share tender offer price
was inadequate from a financial point of view to holders of shares of Ribapharm
stock other than ICN and its affiliates.
In a statement issued today, Daniel J. Paracka, Chairman of the Board of
Ribapharm, said "The Board of Ribapharm continues to believe that the proposed
ICN tender offer price of $5.60 is inadequate, and continues to recommend that
stockholders not tender their shares at this price. The Board currently has no
plans to remove the stockholder rights plan. The Board remains willing to
negotiate with ICN for an increase in the tender offer price that adequately
reflects the value of Ribapharm. If the Board were to consider
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making the stockholder rights plan inoperative as to ICN's tender offer, it
would not do so without first providing our public stockholders with advance
notice, so that all of our public stockholders are given an opportunity to
consider the Board's decision before deciding whether or not to tender their
shares."
Where to Find More Information
------------------------------
In connection with ICN's unsolicited tender offer, Ribapharm has filed materials
with the Securities and Exchange Commission, including a Solicitation/
Recommendation Statement on Schedule 14D-9. STOCKHOLDERS ARE URGED TO READ THE
SOLICITATION/RECOMMENDATION STATEMENT, AS IT MAY BE AMENDED FROM TIME TO TIME,
BECAUSE IT CONTAINS IMPORTANT INFORMATION. Investors can obtain a free copy of
the Solicitation/Recommendation Statement and other materials filed by Ribapharm
with the Securities and Exchange Commission at the SEC's Web site at
www.sec.gov.
In addition, these materials may be obtained for free from Ribapharm by
directing a request to Innisfree M&A Incorporated at 888-750-5834, or via e-mail
at info@innisfreema.com.
Forward-Looking Statements
--------------------------
Certain matters in this press release may constitute forward-looking statements.
Forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or achievements of
the Company to be materially different from any future results, performance or
achievements expressed or implied by forward-looking statements. Investors are
cautioned that forward-looking statements are not guarantees of future
performance and that undue reliance should not be placed on such statements. Any
forward-looking statements contained in this news release are based on current
information and assumptions and represent management's best judgment at the
present time. Expressions of future goals and similar expressions, including,
without limitation, "may," "will," "should," "could," "expects," "does not
currently expect," "plans," "anticipates," "believes," "estimates," "predicts,"
"potential," "targets" or "continue," reflecting something other than historical
fact, are intended to identify forward-looking statements. The following
factors, among others, could cause the Company's actual results to differ
materially from those described in the forward-looking statements: a loss of or
decrease in revenues from our license agreement with Schering-Plough; adverse
changes in the Company's relationship with our majority stockholder, ICN
Pharmaceuticals, Inc.; the risk of potential claims against certain of the
Company's research compounds; the Company's ability to successfully develop and
commercialize future products; the limited protection afforded by the patents
relating to ribavirin, and possibly on future drugs, techniques, processes or
products the Company may develop or acquire; the results of lawsuits or the
outcome of investigations pending against ICN Pharmaceuticals, Inc. and the
Company; the Company's potential product liability exposure and lack of any
insurance coverage thereof; government regulation of
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the pharmaceutical industry (including review and approval for new
pharmaceutical products by the FDA in the United States and comparable agencies
in other countries); disruption to the Company's business caused by ICN's
pending tender offer; the outcome of litigation regarding ICN's unsolicited
tender offer and Ribapharm's stockholder rights plan; the effects of increased
competition; and the ability to attract and retain qualified personnel. For a
detailed discussion of these and other factors that could cause the Company's
actual results to differ materially from those described in the forward-looking
statements, please refer to the Company's filings with the Securities and
Exchange Commission, including especially the Company's annual report on Form
10-K for the year ended December 31, 2002. Unless required by law, the Company
undertakes no obligation to update publicly any forward-looking statements,
whether as a result of new information, future events or otherwise.
# # #
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Exhibit (a)(7)
[RIBAPHARM LOGO]
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3300 Hyland Avenue Telephone: (714) 427-6236
Costa Mesa, California 92626 Fax: (714) 641-7215
Investor Contact:
-----------------
Jennifer Barfoot
(323) 966-5786
jbarfoot@hillandknowlton.com
RIBAPHARM INC. ANNOUNCES SECOND QUARTER 2003 RESULTS
o Company reports net income of $0.17 per diluted share for the
quarter
o Board reaffirms view on ICN tender offer
o Research and development activities remain on track
Costa Mesa, Calif., July 31, 2003 - Ribapharm Inc. (NYSE: RNA) today
announced second quarter 2003 net income of $25.8 million, or $0.17 per diluted
share, compared with $21.0 million or $0.14 per diluted share in the first
quarter 2003, a 22.9% increase, and $31.1 million or $0.21 per diluted share in
the second quarter 2002, a 17.1% decrease.
Second quarter 2003 revenues were $52.0 million, up 7.0% compared with
$48.6 million in the first quarter 2003, and down 21.3% compared with $66.0
million in the second quarter 2002. All of Ribapharm's revenues were in the form
of royalty revenues derived from sales of ribavirin, a drug that Schering-Plough
Ltd. and F. Hoffmann-La Roche Ltd. currently market under license from
Ribapharm.
The Company also announced today a favorable decision in the Company's
arbitration proceeding with Schering-Plough with respect to accrued royalties
relating to Schering-Plough's indigent patient marketing program. The
arbitration decision does not impact the Company's current income statements as
Ribapharm previously recognized a significant majority of the disputed amount as
income and recorded it as a receivable on its balance sheet.
"Our financial results during the quarter were impacted by several
factors, including the effects of increasing competition between Schering-Plough
and F. Hoffmann-La Roche Ltd., who entered the market in January 2003," said Kim
D. Lamon, M.D., Ph.D., president and chief executive officer of Ribapharm.
"Royalty revenues in the second quarter 2003 also were negatively and materially
impacted by Schering-Plough's provision for estimated rebates on its U.S. sales
of ribavirin and changes in trade inventory levels, as reported to us by
Schering-Plough. We have no information with regard to the basis for the rebate
provision."
Dr. Lamon added, "More importantly in terms of drivers of shareholder
value, our research and development on Viramidine(TM) and other products in our
pipeline have progressed well ahead of internal schedules. We have a September
3, 2003 meeting with the FDA to discuss preliminary Phase 2 data of Viramidine
and to discuss the potential of early commencement and design of Phase 3
clinical trials in the U.S. and Europe."
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Dan Paracka, Chairman of the Board of the Company, said, "The Ribapharm
Board anticipated the second quarter 2003 results and such results were taken
into account in its analysis when it concluded that the ICN tender offer price
of $5.60 per share was inadequate, and consequently recommended that our public
stockholders not tender their shares to ICN at that price. Therefore, that
recommendation is unaffected by the results being announced."
Operating income for the second quarter 2003 was $37.3 million, compared
with $33.5 million in first quarter 2003, an 11.3% increase, and $50.4 million
in the second quarter 2002, a decrease of 26.0%.
Research and development expenses of $9.8 million in the second quarter
2003 increased 4.3% from $9.4 million in first quarter 2003, and decreased 28.5%
from $13.6 million in the second quarter 2002. The year over year decrease is
primarily attributable to the timing of costs associated with the clinical
trials of Viramidine(TM) and Hepavir B(TM). It is expected that costs will
increase during the second half of 2003 as progress continues with the clinical
trials of Viramidine and Hepavir B.
General and administrative expenses were $4.9 million in the second
quarter 2003, compared with $5.6 million in the first quarter 2003 and $2.0
million in the second quarter 2002. General and administrative expenses were up
year over year primarily due to an increase of approximately $1.9 million in
legal costs incurred in the second quarter 2003 to defend patents against
generic pharmaceutical companies, to represent the Company and its Board of
Directors in connection with ICN's unsolicited tender offer and related
litigation, and to provide general business services. The remainder of the
increase is attributable to the existence of certain administrative departments
and public company costs, including Directors and Officers Insurance premiums,
that did not exist in the second quarter 2002 prior to the Company's initial
public offering in April 2002.
The income tax rate decreased from 38% in the second quarter 2002 to 31.3%
in the second quarter 2003. The decrease is primarily attributable to an
adjustment in the second quarter 2003 to give effect to the decrease in the
Company's revised estimate of the 2003 annual effective tax rate from 37% to 34%
resulting from an expected increase in R&D tax credits.
Net income for the six months ended June 30, 2003, was $46.8 million or
$0.31 per diluted share, compared with $61.1 million or $0.41 per diluted share
for the six months ended June 30, 2002, a 23.3% decrease. Royalty revenues for
the six months ended June 30, 2003 were $100.5 million, a decrease of $22.5
million or 18.3% from $123.0 million reported for the six months ended June 30,
2002.
For the first six months of 2003, operating income was $70.8 million
compared to $98.7 million for the same period in 2002, a decrease of $27.9
million or 28.3%. Research and development expenses for the six months ended
June 30, 2003 were $19.2 million, down $1.0 million or 5.1% from $20.2 million
in 2002.
General and administrative expenses for the six months ended June 30, 2003
and 2002 were $10.5 million and $4.1 million, respectively, for an increase of
$6.4 million. The increase is
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primarily attributable to a $4.1 million increase in legal costs to defend
patents against generic pharmaceutical companies, to represent the Company and
its Board of Directors in connection with ICN's unsolicited tender offer and
related litigation, and to provide general business services. The remainder of
the increase is attributable to the existence of certain of administrative
departments and public company costs that did not exist in 2002 prior to the
Company's initial public offering in April 2002.
Second Quarter 2003 Conference Call
Ribapharm will host an investor conference call to discuss its second
quarter 2003 results today at 5:30 p.m. EDT (2:30 p.m. PDT). To participate on
the call, please dial (877) 857-0923 or (706) 643-0175, and reference pass code
1839500. A webcast of the live call will be available on the Investor Relations
section of the company's Web site located at www.ribapharm.com. Participants
should allow approximately five minutes prior to the call's start time to visit
the site and download any streaming media software needed to listen to the
webcast.
An audio replay of the call will be available by 8:30 p.m. EDT (5:30 p.m.
PDT) on July 31, 2003, and can be accessed through August 7, 2003, by dialing
(800) 642-1687 or (706) 645-9291 and referencing pass code 1839500. An online
archive of the webcast will be available approximately four hours following the
end of the live call and will be archived on Ribapharm's Web site until August
7, 2003.
About Ribapharm
Ribapharm is a biopharmaceutical company that seeks to discover, develop,
acquire and commercialize innovative products for the treatment of significant
unmet medical needs, principally in the antiviral and anticancer areas.
Certain matters in this press release may constitute forward-looking
statements. Forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results, performance
or achievements of the Company to be materially different from any future
results, performance or achievements expressed or implied by forward-looking
statements. Investors are cautioned that forward-looking statements are not
guarantees of future performance and that undue reliance should not be placed on
such statements. Any forward-looking statements contained in this news release
are based on current information and assumptions and represent management's best
judgment at the present time. Expressions of future goals and similar
expressions including, without limitation, "may," "will," "should," "could,"
"expects," "does not currently expect," "plans," "anticipates," "believes,"
"estimates," "predicts," "potential," "targets," or "continue," reflecting
something other than historical fact, are intended to identify forward-looking
statements. The following factors, among others, could cause the Company's
actual results to differ materially from those described in the forward-looking
statements: a loss of or decrease in revenues from our license agreement with
Schering-Plough; adverse changes in the Company's relationship with our majority
stockholder, ICN Pharmaceuticals, Inc.; the risk of potential claims against
certain of the Company's research compounds; the Company's ability to
successfully develop and commercialize future products; the limited protection
afforded by the patents relating to ribavirin, and possibly on future drugs,
techniques, processes or products the Company may develop or acquire; the
results of lawsuits or the outcome of investigations pending against ICN
Pharmaceuticals, Inc. and the Company; the Company's potential product liability
exposure and lack of any insurance coverage thereof; government regulation of
the pharmaceutical industry (including review and approval for new
pharmaceutical products by the FDA in the United States and comparable agencies
in other countries); disruption to the Company's business caused by ICN's
unsolicited tender offer; the outcome of litigation regarding ICN's unsolicited
tender offer and Ribapharm's stockholder rights plan; the effects of increased
competition; and the ability to attract and retain qualified personnel. For a
detailed discussion of these and other factors that could cause the Company's
actual results to differ materially from those described in the forward-looking
statements, please refer to the Company's filings with the Securities and
Exchange Commission, including especially
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the Company's annual report on Form 10-K for the year ended December 31, 2002.
Unless required by law, the Company undertakes no obligation to update publicly
any forward-looking statements, whether as a result of new information, future
events or otherwise.
Condensed Statements of Income
For the three and six months ended June 30, 2003 and 2002
Three Months Six Months
Ended June 30, Ended June 30,
------------------- ------------------
2003 2002 2003 2002
---- ---- ---- ----
Revenues...................................... $ 51,955 $ 66,000 $100,538 $123,001
-------- -------- -------- --------
Operating expenses:
Research and development................. 9,753 13,646 19,193 20,223
General and administrative............... 4,936 2,000 10,536 4,077
-------- -------- -------- --------
Total operating expenses............. 14,689 15,646 29,729 24,300
-------- -------- -------- --------
Income from operations............... 37,266 50,354 70,809 98,701
Interest, net................................. (299) 161 (147) 161
-------- -------- -------- --------
Income before provision
for income taxes..................... 37,565 50,193 70,956 98,540
Provision for income taxes.................... 11,770 19,073 24,125 37,445
-------- -------- -------- --------
Net income........................... $ 25,795 $ 31,120 $ 46,831 $ 61,095
======== ======== ======== ========
Basic earnings per share...................... $ 0.17 $ 0.21 $ 0.31 $ 0.41
======== ======== ======== ========
Shares used in basic earnings per share
computation................................ 150,001 150,000 150,000 150,000
======== ======== ======== ========
Diluted earnings per share.................... $ 0.17 $ 0.21 $ 0.31 $ 0.41
======== ======== ======== ========
Shares used in diluted earnings per share
computation................................ 150,077 150,014 150,081 150,007
======== ======== ======== ========
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