aaiPharma And CIMA Announce Merger To Create A Leading Science-Based, Specialty Pharmaceutical Company

08-Aug-2003

Creating a more powerful science-based, specialty pharmaceutical company with established proprietary products and technologies, aaiPharma and CIMA announced that they have signed a definitive merger agreement. aaiPharma has a strong branded product portfolio and pipeline. aaiPharma's revenue growth is driven by the development, acquisition and commercialization of products. CIMA has a leading position in orally disintegrating tablet (ODT) drug delivery technologies, product development and manufacturing competencies and a strong partner portfolio. Together both companies can more effectively create value-added new products, particularly in the pain management and gastrointestinal categories, utilizing their combined scientific and development skills. We expect that these activities will drive revenue growth and increase the value of the companies beyond what could be achieved separately. The merger will create a more powerful science-based, specialty pharmaceutical company with: - Combined revenue and income from operations for the twelve months ended June 30, 2003 of $321 million and $83 million, respectively - Combined capitalization of $907 million, based on the August 4, 2003 closing market prices for the shares of both companies - Well-recognized pharmaceutical brands and proven, patented drug delivery technologies - Robust pipeline of near and long term proprietary products in development - Strong financial position - Leading drug development services business - Experienced pharmaceutical management team - Enhanced R&D capabilities with an expected budget of more than $30 million in 2004 - Expanded manufacturing capabilities with sterile and non-sterile production, including 1 billion blister tablet manufacturing capacity in 2004, and 950 million bottle tablet manufacturing capacity expected to be operational by 2004 - Dedicated pharmaceutical product marketing and field sales force of 150 professionals - Approximately 1500 employees "This merger creates a specialty pharmaceutical company with substantial intellectual property and R&D capabilities," said Dr. Philip S. Tabbiner, President and CEO of aaiPharma. "By combining with CIMA, we are building upon our science base by adding attractive proprietary technologies that we believe can be applied to our acquired brands to accelerate pipeline development and drive organic revenue growth. At the same time, with a strengthened balance sheet, the combined company will be well-positioned to take advantage of strategic brand acquisitions in the near term." Steven B. Ratoff, Chairman and Interim CEO of CIMA stated, "This combination fuels our strategy to create a portfolio of proprietary brands and will lead to a more integrated specialty pharmaceutical company. By joining now with a complementary science-based company with development and marketing and sales expertise, a portfolio of branded products, and an experienced management team, this merger will allow us to expedite our proprietary product strategy as well as continue to provide our ODT technologies to others." "We believe this merger will allow both companies to accelerate their goals of maximizing a strong science base to develop, enhance and commercialize proprietary pharmaceutical brands, which we expect to drive revenue growth and increase the shareholder value of the companies, surpassing what could be achieved independently," said Frederick D. Sancilio, Ph.D, Chairman of aaiPharma.

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