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UCB to acquire Zogenix

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Brussels (Belgium) and Emeryville, CA (USA), 19 January 2022 - Regulated information – Inside information – UCB (Euronext: UCB) and Zogenix (NASDAQ: ZGNX) announced today that the companies have entered into a definitive agreement under which UCB would acquire Zogenix, Inc., a global biopharmaceutical company commercializing and developing therapies for rare diseases. Under the terms of the agreement, UCB will commence a tender offer to purchase all outstanding shares of Zogenix for a purchase price per share of US$ 26.00 in cash at closing, plus a contingent value right (CVR) for a potential cash payment of US$ 2.00 upon EU approval by December 31, 2023, of FINTEPLA® as an orphan medicine for treatment of Lennox-Gastaut syndrome (LGS). The upfront consideration represents a 72% premium to Zogenix shares based on the 30-day volume weighted average closing stock price of Zogenix prior to signing. The total transaction is valued at up to approximately US$ 1.9 billion / € 1.7 billion.

The board of directors of both companies have unanimously approved the transaction, the closing of which remains subject to the tender of shares representing at least a majority of the total number of Zogenix’s outstanding shares, receipt of required antitrust clearances, and other customary conditions.

The transaction will broaden and build upon UCB’s role as a leader in, and our continued commitment to, addressing unmet needs of people living with specific or rare forms of epilepsy, in particular, adding FINTEPLA® to UCB’s existing product line. FINTEPLA® has been approved by the U.S. Food and Drug Administration (FDA)1 and the European Medicines Agency (EMA)2 and is under regulatory review in Japan3, for the treatment of seizures associated with Dravet syndrome in patients two years of age and older. Zogenix is also pursuing indications for the use of FINTEPLA® in the treatment of seizures associated with additional rare epilepsies, Lennox-Gastaut syndrome (LGS) and CDKL5 Deficiency Disorder (CDD)4. Zogenix has submitted a Type II Variation Application to the EMA5, and the U.S. FDA recently accepted for filing Zogenix’s supplemental New Drug Application (sNDA)6, granting Priority Review, for LGS. Beginning in childhood, Dravet syndrome and Lennox-Gastaut syndrome are two of the most devastating and life-long forms of epilepsy 7,8,9,10.

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“The proposed acquisition of Zogenix reinforces UCB’s sustainable patient value strategy and continued commitment to addressing unmet needs of people living with epilepsy with an increasing focus on those living with specific or rare forms of epilepsy, where few options exist. Complementing UCB’s existing therapeutic offerings, the Zogenix acquisition provides UCB with an approved medicine for a life-threatening, rare infant- and childhood-onset epilepsy marked by frequent and severe treatment-resistant seizures, that are particularly challenging to treat,” said Charl van Zyl, Executive Vice President, Neurology & Head of Europe/International Markets, UCB. “Utilizing our deep expertise, experience and global capabilities, we plan to accelerate access for patients to the treatment. We look forward to welcoming the Zogenix team to UCB, benefiting from their insights and working together to maximize the reach and impact of their medicines for the benefit of as many people as possible.”

“We are delighted to announce UCB’s proposed acquisition of Zogenix, recognizing the value of our lead medicine, both for the important role it has already begun to play for Dravet patients and their caregivers, and for its potential to help many others in the future,” said Stephen J. Farr, PhD, President and Chief Executive Officer of Zogenix. “We are excited for the potential opportunities ahead of us, working together to accelerate our mission and progress to improve the care of patients in need of new therapies. We believe this transaction is in the best interests of both patients and our shareholders.”

Strategic Benefits

Builds on UCB’s continued epilepsy ambitions: Acquisition provides medicine that complements UCB’s existing symptomatic treatments, bringing significant and differentiated value to patients suffering from Dravet syndrome and, if approved, from seizures associated with Lennox-Gastaut syndrome and potentially other rare epilepsies.

Expands benefits for patients globally: UCB brings an established global footprint, together with deep research and development, commercial, medical, and regulatory expertise in epilepsy, which will be utilized to rapidly advance and optimize the availability of these new treatments and reach additional patients.

Enhances future epilepsy pipeline and strategic priorities in rare/orphan diseases: Zogenix’s pipeline will add to UCB’s short-term and long-term epilepsy pipeline, as well as provide critical learnings in rare/orphan disease health ecosystems.

Enhances UCB’s top-line growth: FINTEPLA® was launched in the U.S. and Europe in 2020 and has significant potential for usage in other seizure types. It is expected that the proposed acquisition, if completed, will contribute to UCB’s revenue growth upon closing and will be accretive to UCB’s earnings in 2023.

Transaction Terms, Approvals and Time to Closing

Under the terms of the acquisition agreement, UCB, through a wholly-owned subsidiary, Zinc Merger Sub, Inc., will initiate a tender offer to acquire all outstanding shares of Zogenix for a purchase price of US$ 26.00 per share in cash, plus one non-tradeable CVR. The CVR will entitle holders to an additional cash payment of US$ 2.00 per share if a regulatory milestone related to approval of FINTEPLA® for treatment of seizures associated with Lennox-Gastaut syndrome (LGS) is achieved by or before December 31, 2023. The closing of the tender offer will be subject to certain conditions, including the tender of shares representing at least a majority of the total number of Zogenix’s outstanding shares, receipt of required antitrust clearances, and other customary conditions. Upon the successful completion of the tender offer, UCB’s acquisition subsidiary will be merged into Zogenix, and any remaining shares of common stock of Zogenix will be cancelled and converted into the right to receive the same consideration per share offered in the tender offer. The transaction is expected to close by the end of the second quarter of 2022. There can be no assurance any payments will be made with respect to the CVR.

Financing and Guidance

The acquisition of Zogenix will be financed by a combination of available cash resources and a new term loan. The transaction is not subject to any financing condition. In addition to contributing to UCB’s revenue growth after closing, the acquisition of Zogenix is expected to be accretive to UCB’s earnings from 2023 onwards.

Advisors

Lazard and Barclays are acting as financial advisors to UCB in relation to the transaction. Covington & Burling LLP is acting as legal advisor to UCB on this transaction.

BofA Securities and SVB Leerink are acting as financial advisors to Zogenix on this transaction. Latham & Watkins LLP is acting as legal advisor to Zogenix on this transaction.

UCB Conference call

UCB hosts a Capital Markets Call 19th January 2022, at 08:30am EST / 13:30 GMT / 14:30 CET. Please register via the UCB Investor Relations website: www.ucb.com/investors

About Dravet Syndrome

Dravet syndrome is a rare, devastating and life-long form of epilepsy that generally begins in infancy and is marked by frequent, treatment-resistant seizures, significant developmental, motor, and behavioral impairments, and an increased risk of sudden unexpected death in epilepsy (SUDEP). Affecting one in 15,700 live births in the U.S. and approximately one in 20,000 to 40,000 live births in Europe, most patients follow a course of developmental delay with cognitive, motor and behavioral deficits that persist into adulthood. Dravet syndrome severely impacts quality of life for patients, families, and caregivers due to the high physical, emotional, caregiving, and financial burden associated with the disease7,8,9.

About FINTEPLA® (fenfluramine) C-IV

FINTEPLA® (fenfluramine) oral solution is a prescription medication used to treat seizures associated with Dravet syndrome in patients two years of age and older 11, 12. FINTEPLA possesses dual activities to inhibit seizures: as a serotonergic agent, acting as a potent 5-HT releaser with agonist activity at 5-HT1D, 2A, and 2C receptors, and as a positive modulator of Sigma1R. FINTEPLA is approved in the U.S. and Europe, and under regulatory review in Japan, for the treatment of seizures associated with Dravet syndrome. The U.S. Food and Drug Administration (FDA) has accepted for filing the company’s supplemental New Drug Application (sNDA) and granted Priority Review for the use of FINTEPLA for the treatment of seizures associated with Lennox-Gastaut syndrome (LGS).

In the United States, FINTEPLA is available only through a restricted distribution program called the FINTEPLA REMS program. FINTEPLA is available in Europe under a controlled access program requested by the European Medicines Agency to prevent off-label use for weight management and to confirm that prescribing physicians have been informed of the need for periodic cardiac monitoring in patients taking FINTEPLA. Further information is available at www.FinteplaREMS.com or by telephone at +1 877 964 3649.

Please see full Prescribing Information, including Boxed Warning, for additional important information on FINTEPLA.

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