Par Pharmaceutical Companies Inc has completed the closing of its acquisition of Kali Laboratories Inc for $135 million in cash and warrants, a company statement said.

The Kali owners may be entitled to up to an additional $10 million based upon certain product-related performance criteria. Earlier, on April 13, 2004, Par announced a definitive agreement to acquire Kali.

With 55 employees in Kali's R&D group, the acquisition more than doubles the size of Par's existing R&D organization. Par now has 35 Abbreviated New Drug Applications (ANDAs) currently awaiting approval by the US Food and Drug Administration (FDA). With more than 60 products now in development, Par expects to submit, or license, 23 ANDAs in 2004.

"The successful completion of this acquisition provides further evidence of our commitment to maintain Par's position among the fastest growing companies in the generic pharmaceutical industry," said Scott Tarriff, president and chief executive officer. "The acquisition of Kali is consistent with our long-term strategy to supplement our internally generated growth with acquisitions, joint ventures, and product licensing agreements," he added.

Of Kali's 14 ANDAs currently awaiting FDA approval, three are for products that Par plans to market. Among the 14 pending ANDAs, four are believed to represent first-to-file opportunities entitling Kali, or its strategic partner, to up to 180 days of marketing exclusivity. These products include metaxalone 400 mg tablets (Skelaxin), tramadol hydrochloride (HCl) and acetaminophen tablets (Ultracet), ondansetron HCl orally disintegrating tablets (Zofran ODT), and mirtazapine orally disintegrating 45 mg tablets (RemeronSolTab). Except for tramadol HCl and acetaminophen tablets, each of these three products are already subject to licensing agreements with partners other than Par. Therefore, Par will receive royalty income from any sale of these products.

Kali is also working on approximately 12 R&D projects that are not currently out-licensed to marketing partners. These products, if successfully developed, will be marketed by Par.

Par, or its marketing partners, expects to launch a total of at least 36 new products in 2004 and 2005. This represents approximately half the total number of products marketed by Par at the beginning of 2004. Depending on whether Kali gains timely regulatory approval of certain new products, most notably the generic version of Ultracet, Par believes that the acquisition of Kali may add approximately $1.00 to earnings per share through 2005.

Kali Laboratories, Inc. submitted an ANDA containing a paragraph IV certification to the FDA in August 2002 seeking marketing clearance for tramadol HCl and acetaminophen tablets. Johnson & Johnson currently markets 37.5 mg tramadol HCl/325 mg acetaminophen tablets under the brand name Ultracet. The product is indicated for the short-term (five days or less) management of acute pain and achieved US sales of approximately $270 million in 2003.

Kali is currently litigating the patent held by Johnson & Johnson. On May 28, 2004, Kali served summary judgment motions in these proceedings. Summary judgement motions are planned to be fully briefed with the US District Court of New Jersey, by August 11, 2004.

Kali is a generic pharmaceutical research and development (R&D) company located in Somerset, New Jersey.