Under the amended merger agreement, FHC issued two million shares of common stock and 546,756 shares of FHC Class A Preferred Stock - Series 4 to the APP shareholders. Each share of preferred stock will automatically convert into 40 common shares at a future date, contingent upon subsequent shareholder approval of such conversion by the affirmative vote of the majority of votes cast, and subsequent shareholder approval of an amendment to FHC's articles of incorporation to increase the number of authorized shares of common stock by the affirmative vote of at least two-thirds of the shares of common stock outstanding at that time. Consummation of the merger did not require current shareholder approval.As of October 14, 2016, nearly 80 percent of all votes cast, and approximately 65 percent of all outstanding shares, had voted FOR the three remaining proposals requiring supermajority approval (66 and 2/3 percent), with over 17 percent or approximately five million of FHC's outstanding shares still having not voted. While the significant majority of U.S. public corporations have a majority vote standard for such proposals, a standard which would have resulted in approval of all of the proposals by the original date of the Special Meeting on September 20, FHC is subject to a two-thirds vote requirement due to a provision of Wisconsin law applying to corporations organized before January 1, 1973. FHC's Board of Directors received an updated opinion from FHC's financial advisor stating that, as of the date of such opinion, the modified merger consideration pursuant to the amended and restated merger agreement was fair to FHC from a financial point of view. The 546,756 shares of FHC Class A Preferred Stock - Series 4 will have only one vote per share and will generally vote with FHC common shares on a one share to one share basis. On an as converted basis, which is wholly dependent upon future shareholder approval as described above, APP shareholders will own approximately 23,870,000 FHC common shares, constituting approximately 45% of the outstanding common shares as of the closing date.
FHC remains a Wisconsin corporation and the corporate name of the combined company remains The Female Health Company, but the combined company will do business as Veru Healthcare with regard to pharmaceuticals and consumer health and as The Female Health Company with regard to public health. Shares of FHC will continue to trade on NASDAQ under the same trading symbol "FHCO."Management and Governance The combined company's Board of Directors is comprised of the following nine members: Elgar Peerschke, who will serve as Chairman, O.B. Parrish, who will serve as Vice Chairman, David R. Bethune, Mario Eisenberger, M.D., Harry Fisch, M.D., Mary Margaret Frank, Ph.D., Lucy Lu, M.D., Georges Makhoul and Mitchell S. Steiner, M.D. Andy Love will serve as Board Observer. The Combined Female Health Company The combined company will be organized as follows: Veru Healthcare will manage the Pharmaceuticals and Medical Devices and Consumer Health divisions and The Female Health Company will manage the global Public Health sector FC2 business. Pharmaceuticals and Medical Devices will include:
- Tamsulosin DRS, a novel oral formulation for men with benign prostatic hyperplasia (BPH) and swallowing difficulties. U.S. market for alpha blockers to treat BPH is estimated to be $4.5 billion annually per IMS. 505(b)(2) product candidate. Plan to file FDA new drug application (NDA) in 2017.
- MSS-722, being developed as the first oral agent for the treatment of idiopathic male infertility. Orphan drug status pending. U.S. market is estimated to be $700 million annually. 505(b)(2) product candidate.
- APP-944, an oral drug being developed for the treatment of hot flashes caused by prostate cancer hormone therapies. U.S. market is estimated to be $600 million annually. 505(b)(2) product candidate.
- APP-111, a novel new chemical entity (NCE) being developed as a first-in-class oral chemotherapeutic agent that targets tubulin in men with advanced prostate cancer, U.S. market is estimated to be $5 billion annually. Also a novel NCE being developed as a first-in-class oral anti-tubulin targeting chemotherapy for women with advanced breast or ovarian cancer. (Will initiate NCE drug development for advanced breast or ovarian cancer after lead indication for advanced prostate cancer in men.)
- APP-112, NCE, oral drug being developed for treatment of acute gout flares that has the potential to have a better safety profile than the currently used colchicine. U.S. market is estimated to be $725 million annually.
- Disposable Contraceptive Device, FC2 Female Condom ® (FC2), currently the only available female condom that is approved by the FDA for marketing in the U.S. and cleared by the World Health Organization (WHO). FC2 provides dual protection against unintended pregnancy and sexually transmitted infections (STIs), including HIV/AIDS and the Zika virus.
- FC2 Female Condom ® (FC2) for consumer markets.
- PREBOOST ™ , OTC medicated individual wipes for reducing the incidence of premature ejaculation. U.S. premature ejaculation market is estimated to be $500 million annually per IMS. FDA OTC drug monograph compliant.
- FC2 Female Condom ® (FC2) for global public sector markets.
Contacts: Michele Greco312.595.9742Mitchell Steiner, MD901.581.5872