Noven Pharmaceuticals, Inc. has agreed to acquire JDS Pharmaceuticals, LLC for approximately $125 million cash at closing plus the assumption of approximately $10 million in net liabilities. Based in New York City, JDS is a privately-held specialty pharmaceutical company that currently markets two branded prescription psychiatry products through a targeted sales force and is advancing a significant pipeline of high-potential products in psychiatry and women's health.

The acquisition provides Noven with substantial immediate, mid-term and long-term benefits, including: A self-supporting, leveragable marketing/sales infrastructure, with two high-margin marketed products and substantial expertise in the psychiatry category; A next-generation psychiatry pipeline that includes one pending New Drug Application (NDA) and one product in phase 3 trials; A non-hormonal product entering phase 3 for vasomotor symptoms (hot flashes/night sweats) associated with menopause that is highly complementary with Noven's existing expertise in women's health; Greater control over the success of its products and improved gross margin potential; and An annual sales opportunity from JDS's products in excess of $500 million beginning in 2012 (assuming development and FDA approval on current schedules).

Closing of the transaction is expected to occur by early August and is subject to expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions.

"This is a transformational acquisition that expands our business model," said Robert C Strauss, Noven's president, CEO & chairman. "The transaction advances Noven from a leading drug delivery company to a broader-based, fully-integrated specialty pharmaceutical company. We believe it will increase Noven's growth rate over the longer term, as well as greatly improve the visibility of our pipeline and financial goals."

"We will now have the products, infrastructure and category expertise necessary to market and sell products ourselves," said Strauss. "This will provide greater control over the success of our products, and should result in the retention of greater financial benefits. In addition, through our Novogyne joint venture we have expertise and a track record of success in targeted selling against larger market participants, and we plan to apply that expertise in the psychiatry category."

"The transaction also significantly expands our pipeline opportunities," said Strauss. "JDS's development pipeline includes high-margin, high-potential psychiatry products, as well as a women's health product called Mesafem entering phase 3 trials. Mesafem has substantial commercial value independent of the psychiatry business, and fits perfectly with our existing expertise in the development and sale of products to treat the symptoms of menopause."

Phillip M. Satow, chief executive officer and co-founder of JDS, added: "At JDS, we have assembled a highly-experienced management team, a solid sales force with two marketed products, and a valuable new product pipeline. By joining with the expertise and resources of Noven, we believe we can accelerate development of our psychiatry business, independently develop Mesafem in women's health, and more rapidly achieve the vision that we have been working toward at JDS."

Following closing, Satow is expected to join Noven's board of directors. After 15 years with Pfizer and three years as vice president and general manager of the Carter Wallace pharmaceutical business, Satow served as executive vice president of Forest Laboratories and President of its Forest Pharmaceuticals subsidiary. He established the marketing and sales departments at Forest, which he led for 14 years through the launch of the highly-successful antidepressant Celexa. JDS was founded in August 2004 by Satow and his son, Michael Satow, JDS president & chief operating officer.