SAN DIEGO, June 25, 2002 (PRIMEZONE) -- Women First HealthCare, Inc. (Nasdaq:WFHC) announced today that it acquired exclusive worldwide rights and title to VANIQA(r) (eflornithine hydrochloride) Cream, 13.9% from a joint venture formed by Bristol-Myers Squibb Company (NYSE:BMY) and The Gillette Company (NYSE:G). VANIQA (pronounced VAN-i-ka) is a topical cream clinically proven to slow the growth of unwanted facial hair in women. VANIQA was approved for marketing by the U.S. Food and Drug Administration in July 2000 and is the only prescription pharmaceutical available for this prevalent condition. VANIQA also has been granted regulatory approval in 25 international markets including the European Union, Canada and major Latin American countries.
Unwanted facial hair, which can be caused by hereditary factors, hormonal changes and medical conditions involving androgen excess, is a common and significant condition that affects women of all races and ethnicities from puberty through post-menopause. Market research conducted to support the initial launch of VANIQA indicated more than 22 million women in the U.S. alone remove unwanted facial hair (excluding eyebrows) at least once each week.
Women First paid $38.5 million in cash to acquire product rights, inventory, regulatory filings and patent rights associated with VANIQA from the joint venture parties. Women First also secured the right to pursue an over-the-counter strategy and to develop enhanced formulations of VANIQA. Bristol-Myers Squibb will continue to manufacture VANIQA for three years following the acquisition.
The Company financed the acquisition through the issuance of $28 million of senior secured notes (the "Notes") and $13 million of convertible preferred stock (the "Preferred Stock"). The Notes mature in September 2005 and are callable by the Company at any time. The purchasers of the Notes received warrants exercisable into 1.7 million shares of Common Stock at an exercise price of $5.50 per share. The Preferred Stock is redeemable by the Company in December 2005, or at the option of the Company once the Common Stock trades at a certain price level, and is convertible into shares of Common Stock at $6.35 per share. The financing was provided by CIBC Capital Partners and Whitney & Co.
"VANIQA represents a perfect acquisition opportunity for Women First," expressed Edward F. Calesa, chairman, president and CEO of the Company. "This acquisition is consistent with our strategy of identifying products that will solidify our position in the women's health sector. VANIQA is a totally unique, patented prescription product with customary high margins, which can be sold through our existing distribution channels to the OB/GYN community. The market opportunity for VANIQA is significant based on an estimated 22 million women in the U.S. who currently treat unwanted facial hair and are, therefore, potential VANIQA users. We expect to leverage the experience and promotional expense from the initial launch. Furthermore, we expect the acquisition will be accretive to earnings beginning this year. Finally, we believe there will be substantial upside opportunity to expand the market for VANIQA by introducing the product outside the United States."
Vice president and CFO, Charles M. Caporale commented on the acquisition and the impact it is expected to have on the Company's financial performance, saying: "We acquired this product at what we believe is a very reasonable price. We expect that VANIQA will have an immediate positive impact on the financial performance of the Company. As such, we are increasing our 2002 revenue guidance to between $46 million and $50 million. We expect cash earnings to be significantly higher than GAAP earnings as a result of the non-cash charges resulting from accounting for the acquisition and financing. We are increasing our earnings per share guidance to $0.21 to $0.24. We believe VANIQA will increase revenue for 2003 by $13 million to $15 million and earnings per share by $0.04 to $0.05. The accounting treatment of the transaction will require us to take a one-time charge in the second quarter of approximately $1.0 million."
CIBC World Markets acted as financial advisor and placement agent for Women First in connection with the transaction.
Women First has scheduled a conference call for Wednesday, June 26, 2002 at 11:00 a.m. EDT to discuss the acquisition. The June 26 conference call will be broadcast live on the Internet and will be accessible at womenfirst.com, Investor Relations, Conference Calls, http://www.irconnect.com/wfhc/pages/conference.html and at CCBN's www.companyboardroom.com. Windows Media Player is the required software plug-in and can be downloaded at no cost from both Web sites.
The conference call will be archived and available on the above Web sites for two weeks beginning at approximately 1:00 p.m. EDT, Wednesday, June 26, through 5:00 p.m. EDT, Wednesday, July 10. A telephone replay of the call will also be available during this same timeframe and will be accessible by calling (800) 642-1687 (domestic) or (706) 645-9291 (international), conference code No. 4716893.
About VANIQA(r) (eflornithine hydrochloride) Cream, 13.9%
VANIQA(r) is indicated for the reduction of unwanted facial hair in women. VANIQA has been shown to retard the rate of hair growth in non-clinical and clinical studies. VANIQA has only been studied on the face and adjacent involved areas under the chin of affected individuals. Usage should be limited to these areas of involvement. In controlled trials, VANIQA provided clinically meaningful and statistically significant improvement in the reduction of facial hair growth around the lips and under the chin for nearly 60% of women using VANIQA. VANIQA is not a hair remover but complements other current methods of hair removal such as electrolysis, shaving, depilatories, waxing, and tweezing. The patient should continue to use hair removal techniques as needed in conjunction with VANIQA. Improvement in the condition may be noticed within four to eight weeks of starting therapy. Continued treatment may result in further improvement and is necessary to maintain beneficial effects. The condition may return to pre-treatment levels within eight weeks following discontinuation of treatment. The most frequent adverse events related to treatment with VANIQA were skin-related adverse events.
Women First HealthCare, Inc. (Nasdaq:WFHC) is a San Diego-based specialty pharmaceutical company. Founded in 1996, its mission is to help midlife women make informed choices regarding their health care and to provide pharmaceutical products -- the Company's primary emphasis -- and lifestyle products to meet their needs. Women First HealthCare is specifically targeted to women age 40+ and their clinicians. Further information about Women First HealthCare can be found online at www.womenfirst.com, About Us and Investor Relations.
This press release may contain certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to various risks, and Women First HealthCare, Inc. cautions you that any forward-looking information is not a guarantee of future performance. Women First HealthCare, Inc. disclaims any intent or obligation to update these forward-looking statements. Actual results could differ materially due to a number of factors, including (i) we have incurred significant losses since we were founded in November 1996, and if midlife women do not use, and their clinicians do not recommend, the products we offer, we will experience losses in the future; (ii) there is a limited market awareness of our Company and the products and services we offer; (iii) we may not be able to identify appropriate acquisition, licensing, or co-promotion candidates in the future or to take advantage of the opportunities we identify; (iv) we and our products face significant competition; (v) if we do not successfully manage any growth we experience, we may experience increased expenses without corresponding revenue increases; (vi) we are dependent on single sources of supply for all of the products we offer; (vii) reduced consumer confidence could adversely affect sales by our Consumer Business Division; (viii) we have incurred significant debt obligations which will require us to make debt service payments in the future; and (ix) additional factors set forth in the Company's Securities and Exchange Commission filings including its Annual Report on Form 10-K for the period ended December 31, 2001 and its Form 10-Q for the period ended March 31, 2002.