PDL BioPharma proposes to acquire Neos Therapeutics

PDL BioPharma announced that it has submitted a proposal to acquire Neos Therapeutics for $10.25per share in cash. This all-cash transaction represents a premium of 40% to the closing price of Neos shares on October 25, 2017 and a premium of 41% to Neos’ share price prior to PDL’s initial proposal on June 23, 2017. The PDL proposal is not subject to any financing conditions.

The acquisition of Neos is consistent with PDL’s stated strategy for growth and is a logical next step in the execution of its strategic plan. In particular, the Company believes that this acquisition would create an attractive pediatric platform and foundation for future growth.

Based on its due diligence, PDL’s Board of Directors strongly believes that PDL’s backing and substantial financial resources would greatly augment the performance of the Neos product portfolio and allow more patients to benefit from Neos’ products. PDL has high regard for Neos’ organization and sales force and believes that the addition of PDL’s greater resources will add substantial value to currently marketed treatments over a shorter period of time as well as accelerate the development of additional products.

PDL first approached the Neos Board of Directors in early June of 2017 in an effort to privately negotiate a mutually beneficial transaction. On June 23, 2017, PDL formally proposed to acquire Neos for $10.25 per share, a proposal the Neos Board promptly rejected. PDL notes that three days after Neos’ Board rejected PDL’s proposal, Neos announced a significantly dilutive financing at a substantially lower price, selling shares at a net price of $6.25 per share.

Following Neos’ dilutive financing at $6.25 per share, PDL maintained its $10.25 proposal to the Board, an increase in the total transaction size given the dilution of the financing. As a result of the Board’s recent rejection of PDL’s latest proposal—and in light of the Board’s refusal to negotiate in good faith toward a transaction in the best interests of Neos shareholders—PDL’s Board and management are now making its proposal to the Neos Board public so that Neos shareholders can decide what is in their best interest.

The Neos Board has had approximately four months since PDL’s first proposal, therefore PDL expects the Neos Board to have sufficient information to make its public response to this proposal quickly. The PDL proposal will remain outstanding for a period of fourteen (14) days. The proposal does not create any binding obligation on Neos, PDL or any of their respective affiliates. With appropriate engagement from Neos’ management, PDL is ready to finalize diligence and conclude the transaction within a short time.

PDL currently owns common stock of Neos amounting to less than 5% of Neos’ outstanding shares. If Neos is unable to complete this transaction, PDL reserves the right to sell any and all of these shares at any time.