J&J WILL END UP WITH DISTRIBUTION RIGHTS TO MEDCHEM's AMVISC
J&J WILL END UP WITH DISTRIBUTION RIGHTS TO MEDCHEM's AMVISC hyaluronic acid product under a proposed agreement involving Revlon, J&J, Frigitronics and MedChem. In an Aug. 28 announcement that it has withdrawn its offer to purchase certain assets of Frigitronics in light of Revlon's tender offer, MedChem reported that Revlon "has also entered into an agreement with Johnson & Johnson under which Johnson & Johnson will purchase certain assets of Frigitronics' subsidiary, Precision-Cosmet," the exclusive distributor of MedChem's primary product AMVISC. "One of the major assets of Precision-Cosmet being acquired by J&J is the distribution rights to AMVISC and related hyaluronic acid products," MedChem said. "It is expected that MedChem and J&J will amend the current distribution agreement and extend its term through 1996." MedChem's announcement followed Revlon's same-day report that it has "signed an agreement with J&J pursuant to which J&J would purchase for $100 mil. the intraocular lens business . . . of Frigitronics," if Revlon wins control of Frigitronics in its current hostile tender offer. The transaction includes the purchase of 500,000 Frigitronics-held shares of MedChem by J&J. J&J has also agreed to reimburse MedChem for any expenses related to the transactions. "In contrast to the structure of MedChem's original Frigitronics proposal, no additional shares of MedChem common stock will be issued in connection with the J&J transaction," MedChem said. The 500,000 MedChem shares will represent about a 22% stake in the firm. MedChem's AMVISC hyaluronic acid business fits nicely with J&J's Iolab subsidiary. MedChem Chairman David Swann said, "We have accomplished what we wanted in securing a new distribution relationship with J&J. J&J's subsidiary, Iolab, is a leading manufacturer and distributor of intraocular lenses worldwide." Completion of the Revlon tender offer and the J&J acquisition is contingent upon receipt of required regulatory approvals, including authorization under the Hart-Scott-Rodino Antitrust Act. Drexel Burnham is acting as dealer manager in connection with the offer. First Boston is financial advisor to J&J.
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