In a great victory for the reverse merger world and Form 10 shells, as reported in the Reverse Merger Report, Cougar Biotechnology was sold recently to Johnson & Johnson through a tender offer for $1 billion! OK, maybe that doesn’t seem like much compared to Obama’s stimulus package, but it is! Cougar was backed by Paramount Biosciences guru Dr. Lindsay Rosenwald and reverse merged in 2006 with a Form 10 shell provided by affiliates of Richard Rappaport’s WestPark Capital in LA. Disclaimer: affiliates of both Paramount and WestPark are or have been clients. Our firm set up the Form 10 shell that was used and we worked on the merger on behalf of the shell.
Cougar’s stock price has risen 145% since it began trading after the reverse merger. At the time of the merger it was also somewhat historical as a pre-arranged $50 million financing took place contemporaneous with the reverse merger. That was a staggeringly high number at the time (and still frankly is). Rappaport indicated in the article that the Form 10s have use in the right circumstances. Rosenwald said he was frustrated by the lack of an IPO market, and that Cougar could never have completed an IPO at the time.
So yes, I would put this one on the list of most successful reverse mergers, along with the likes of Berkshire Hathaway, Texas Instruments, Occidental Petroleum, Blockbuster Entertainment, Tandy Corp. (Radio Shack), Turner Broadcasting and many others. Well done, guys.