King Pharmaceuticals Inc announced the Company's acquisition of the rights to three branded prescription pharmaceutical products from Aventis. The products include the rights in the United States, Puerto Rico, and Canada to Intal (cromolyn sodium) and Tilade (nedocromil sodium), inhaled anti-inflammatory agents for the management of asthma, and worldwide rights, excluding Japan, to Synercid (dalfopristin and quinupristin), an injectable antibiotic indicated for treatment of vancomycin-resistant Enterococcal faecium (VREF) and treatment of complicated skin and skin structure infections. Total upfront cash consideration paid by King for the three branded pharmaceutical products equals $199.5 million. Net sales of Intal and Tilade in the United States, Puerto Rico, and Canada and net sales of Synercid worldwide totaled approximately $66 million during the twelve months ending September 30, 2002.

Jefferson J. Gregory, Chairman and Chief Executive Officer of King, stated, "Our acquisition of the rights to Intal, Tilade and Synercid continues the successful execution of King's strategy to selectively acquire rights to exclusive branded prescription pharmaceutical products that we believe should significantly benefit from focused promotion and marketing, and product life-cycle management. With the application of our well-established sales and marketing capabilities, we believe Intal and Tilade, in particular, offer excellent opportunities for growth."

Intal and Tilade are non-steroidal anti-inflammatory, non-beta-2 agonist agents for the treatment of asthma. Intal is administered with either an inhaler or a nebulizer and is indicated for the long-term treatment of bronchial asthma in adults and children. Tilade is administered with an inhaler and is indicated for the long-term treatment of bronchial asthma and associated chronic cough in adults. A new Intal inhaler formulation utilizing hydrofluoroalkane (HFA), an environmentally friendly propellant, is currently under review by the U.S. Food and Drug Administration (FDA). The HFA formulation of Intal is patented in the United States until September 2017. Tilade has a composition of matter patent in the United States until October 2006. In addition to patent protection, the delivery system of the inhaler products lessens the potential for generic competition. Net sales of Intal and Tilade in the United States, Puerto Rico, and Canada totaled approximately $39 million during the twelve months ending September 30, 2002. Sales of Tilade during the second half of 2002 were affected by lack of available product due to scheduled refurbishment of the product's production facilities. The manufacture of Tilade resumed during the fourth quarter of 2002 and product produced is awaiting validation.

Synercid is an injectable antibiotic indicated for treatment of VREF and treatment of complicated skin and skin structure infections caused by Staphylococcus aureus (methicillin susceptible) or Streptococcus pyogenes. Synercid, which is primarily administered in hospitals, has a formulation patent in the United States until November 2017. As additional consideration to Aventis for Synercid, King has agreed to potential milestone payments totaling $75.1 million. King will potentially pay Aventis milestone payments totaling $50.1 million over the next three years, payable in annual installments of $10.3 million, $21.2 million, and $18.6 million beginning on December 31, 2003, which relate to the indication for the treatment of VREF. The remaining $25 million milestone is payable to Aventis if Synercid should receive FDA approval to treat methicillin resistant Staphylococcus aureus (MRSA), or King will pay Aventis a one-time payment of $5 million the first time during any twelve-month period net sales of Synercid exceed $60 million, and a one-time payment of $20 million the first time during any twelve-month period net sales of Synercid exceed $75 million. Net sales of Synercid worldwide during the twelve months ending September 30, 2002 totaled approximately $27 million.

As part of the transaction, King is entering into license, option, manufacturing, and supply agreements with Aventis. Pursuant to the manufacturing and supply agreements, Aventis will manufacture Intal, Tilade, and Synercid, and supply King's requirements for those products for an initial term of five years. Based on the terms of the manufacturing and supply agreements, King expects to realize combined gross margins on the products consistent with typical branded prescription pharmaceutical products.