KANSAS CITY, MO. and RESEARCH TRIANGLE PARK, N.C. - January 5, 1999 - Hoechst Marion Roussel, Inc., the global pharmaceutical company of Hoechst AG, and Quintiles Transnational Corp. (Nasdaq: QTRN), the leading provider of product development services to the pharmaceutical industry, today announced the completion of Quintiles' acquisition of substantial assets of Hoechst Marion Roussel's Kansas City-based Drug Innovation and Approval (DI&A) facility and the opening of a contract research facility in Kansas City, Mo. The agreement also includes the employment by Quintiles of approximately 500 former Hoechst Marion Roussel employees based in Kansas City.
The previously announced transaction, which became effective Jan. 1, 1999, guarantees Quintiles revenues of $436 million over five years for continued support and completion of ongoing Hoechst Marion Roussel development projects. This arrangement provides substantial cost savings for Hoechst Marion Roussel from what it had planned to spend in Kansas City on the operation of the DI&A facility. Beyond the guaranteed revenue, Hoechst Marion Roussel will offer Quintiles the opportunity to provide all U.S. outsourcing services up to an additional $144 million over the same period. Hoechst Marion Roussel also will grant Quintiles preferred status as a contract research organization (CRO) partner for other projects as available.
Quintiles is purchasing and has assumed management of the DI&A facility in Kansas City, consisting primarily of 540,000 square feet of modern office buildings, laboratories and related equipment, for approximately $93 million in cash, most of which is expected to be payable in the second half of 1999, when the acquisition of the physical facility is completed. Lehman Brothers advised both companies in the transaction.
The addition of the facility and its staff substantially expands Quintiles' resources and expertise in pre-clinical and clinical drug development. Quintiles has taken over daily management of the Hoechst Marion Roussel development projects currently under way in Kansas City. The DI&A facility and its employees, now part of the Quintiles CRO service group, also will take on projects for pharmaceutical customers worldwide. The new Quintiles group in Kansas City will offer a wide range of services focused on regulatory approval and product support, including preclinical activities, clinical phases II-IV, data management, biostatistics and regulatory services.
The DI&A facility in Kansas City, capable of accommodating up to 1,400 employees, is now utilizing about 40 percent of its capacity. Quintiles anticipates expanding operations at the Kansas City site as business conditions warrant. In particular, the addition of the DI&A group's preclinical, packaging and distribution capabilities significantly increases Quintiles' ability to serve customers in the Americas and mirror the company's existing facilities and services in Europe.
Information in this press release is qualified by the description of the transaction contained in Form 8-K filed by Quintiles Transnational with the Securities and Exchange Commission.
About Hoechst Marion Roussel, Inc.
Hoechst Marion Roussel, a world leader in pharmaceutical-based health care, is dedicated to extending and enhancing human life through the discovery, development, manufacture and sale of pharmaceutical products. The company's major products are among the world's leading therapies for allergic, metabolic and central nervous system disorders and cardiovascular and infectious diseases. Based in Frankfurt, Germany, Hoechst Marion Roussel is the pharmaceutical company of Hoechst AG, an international company that focuses on life sciences. The company's North America headquarters is in Kansas City, Mo.
Statements in this news release other than historical information are forward-looking statements subject to risks and uncertainties. Actual results could differ materially depending on factors such as the availability of resources, the timing and effects of regulatory actions, the strength of competition, the outcome of litigation and the effectiveness of patent protection. Additional information regarding risks and uncertainties is set forth in the 1997 Hoechst AG Annual Report on Form 20-F and other documents of Hoechst AG on file with the Securities and Exchange Commission.
About Quintiles Transnational Corp.
Quintiles Transnational Corp. is the market leader in providing a full range of integrated product development and marketing services to the pharmaceutical, biotechnology and medical device industries. Quintiles also provides healthcare policy consulting and health information management services to healthcare and governmental organizations worldwide. Quintiles is headquartered near Research Triangle Park, North Carolina. Quintiles operates through specialized work groups dedicated to meeting customers' individual needs and has more than 14,000 employees worldwide and offices in 30 countries.
Information in this press release contains "forward-looking statements." These statements involve risks and uncertainties that could cause actual results to differ materially, including without limitation, the ability of the assets acquired to be integrated with Quintiles' current operations, actual operating performance and utilization of the new facility, the ability to maintain large client contracts or to enter into new contracts, and the actual costs of combining the businesses. Additional factors that could cause actual results to differ materially are discussed in the company's recent filings with the Securities and Exchange Commission, including but not limited to its S-3 and S-4 Registration Statements, its Annual Report on Form 10-K, its Form 8-Ks, and its other periodic reports, including Form 10-Q, exhibit 99.01