PORT WASHINGTON, N.Y., Dec. 15, 2016 (GLOBE NEWSWIRE) -- ACETO Corporation (NASDAQ:ACET) commented today on recent announcements impacting the generic pharmaceuticals industry. The State of Connecticut announced today that it and nineteen other states have filed a civil complaint against six generic drug manufacturers or suppliers, including Citron Pharma LLC, alleging violations of the antitrust laws relating to the sale of two drugs, doxycycline hyclate delayed release (“Doxy DR”) and glyburide. Yesterday, the Department of Justice (“DOJ”) announced that it has brought criminal charges against two executives of Heritage Pharmaceuticals in connection with the pricing of doxycycline hyclate and glyburide.
ACETO has no reason to believe that it is involved in the reported matters or that any of its products are among the products covered in these proceedings.
As previously announced, on November 2, 2016, ACETO entered into a definitive agreement to acquire certain generic products and related assets from Citron and Lucid Pharma LLC. Prior to execution of the definitive agreement, Citron advised ACETO that Citron and certain of its employees received grand jury subpoenas from the DOJ relating to the marketing, pricing and sale of four products, one of which Citron never sold and three of which (including glyburide) accounted in the aggregate for less than 1% of Citron’s net sales for the six-months ended June 30, 2016. Citron discontinued marketing glyburide in early 2015 due to lack of sales. Citron has advised ACETO that it never marketed the Doxy DR (generic to DORYX) that was mentioned in the civil complaint filed by the State of Connecticut; and doxycycline hyclate and Doxy DR were not referenced in the subpoenas received by Citron or its employees.
The definitive agreement was structured as a purchase of assets, with ACETO buying certain agreed-upon products and not the entire Citron business and with ACETO assuming only specified liabilities. All other liabilities, including liabilities, if any, associated with the DOJ matter and the States’ civil suit, have been retained by Citron, which has indemnified ACETO for the liabilities that it has retained.
The products identified in the DOJ matter and the States’ civil complaint themselves are not inherently unlawful, but instead, the conduct around the pricing of those products is under scrutiny. Citron has advised ACETO that it acted in full compliance with all applicable laws and regulations. Citron will remain an independent stand-alone entity following the product acquisition by ACETO. ACETO is not acquiring the Citron entity that is the subject of the DOJ investigation or the civil complaint. Subsequent to closing of the pending acquisition, Citron will continue to be independently owned by its current shareholders.
ACETO maintains rigorous policies, procedures and training programs in order to facilitate compliance with applicable laws throughout its organization. Following the closing of the pending product acquisition, ACETO will sell the acquired products to customers using the same high standards of compliance and integrity with which it currently conducts its existing business.
ACETO remains confident in its pending acquisition of products from Citron and looks forward to consummating the transaction later this month or in early 2017. The DOJ investigation of Citron was fully disclosed to ACETO’s financing sources in connection with the transaction prior to entering into the commitment letter for that financing.
ACETO Corporation, incorporated in 1947 and with offices and operations in 10 countries, is engaged in the development, marketing, sale and distribution of Human Health products (finished dosage form generics and nutraceuticals), Pharmaceutical Ingredients (pharmaceutical intermediates and active pharmaceutical ingredients) and Performance Chemicals (specialty chemicals and agricultural protection products).
This news release contains forward-looking statements as that term is defined in the federal securities laws. The events described in forward-looking statements contained in this news release may not occur. Generally, these statements relate to ACETO’s business plans and strategies, projected or anticipated benefits or other consequences of ACETO’s plans or strategies, financing plans, projected or anticipated benefits from acquisitions that ACETO may make, including the proposed acquisition, or a projection involving anticipated revenues, earnings or other aspects of ACETO’s operating results or financial position, and the outcome of any contingencies. Any such forward-looking statements are based on current expectations, estimates and projections of management. ACETO intends for these forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements. Words such as “may,” “will,” “expect,” “believe,” “anticipate,” “project,” “plan,” “intend,” “estimate,” and “continue,” and their opposites and similar expressions are intended to identify forward-looking statements. Statements made herein and elsewhere regarding the proposed acquisition, the financing thereof and the pending legal proceedings are also forward-looking statements. ACETO cautions you that these statements are not guarantees of future performance or events and are subject to a number of uncertainties, risks and other influences, many of which are beyond ACETO’s control, which may influence the accuracy of the statements and the projections upon which the statements are based. These uncertainties, risks and other influences include, but are not limited to, risks related to: the parties’ ability to satisfy closing conditions in the anticipated time frame or at all; obtaining regulatory approval, including the risk that any approval may be on terms, or subject to conditions, that are not anticipated; the possibility that the proposed acquisition does not close; ACETO’s ability to realize expected benefits and synergies from the acquisition; disruption from the proposed acquisition making it more difficult to maintain relationships with customers, employees or suppliers; the diversion of management time on acquisition-related issues; any negative effects that this announcement or the consummation of the acquisition may have on the market price of ACETO’s common stock; unexpected costs, charges or expenses relating to the proposed acquisition; unknown liabilities; litigation and/or regulatory actions related to the proposed acquisition and the disclosed investigation; and ACETO’s indebtedness incurred to acquire the purchased products and related assets. Factors that could cause actual results to differ materially from those set forth or implied by any forward-looking statement also include, but are not limited to, risks and uncertainties discussed in ACETO’s reports filed with the Securities and Exchange Commission, including, but not limited to, ACETO’s Annual Report on Form 10-K for the fiscal year ended June 30, 2016, and other filings. Copies of these filings are available at www.sec.gov. Any one or more of these uncertainties, risks and other influences could materially affect ACETO’s results of operations and whether forward-looking statements made by ACETO ultimately prove to be accurate. ACETO’s actual results, performance and achievements could differ materially from those expressed or implied in these forward-looking statements. ACETO undertakes no obligation to publicly update or revise any forward-looking statements, whether from new information, future events or otherwise.
Investor Relations Contact: LHA Jody Burfening firstname.lastname@example.org (212) 838-3777