EXHIBIT (a)(3)
PHARMAINVEST, L.L.C.
August 21, 1997
OFFER TO PURCHASE AT $240,000 PER CCPR IN CASH
Dear CCPR Holder:
PharmaInvest, L.L.C., a Delaware limited liability company (the
"Purchaser"), is offering to purchase up to 160 outstanding contractual
contingent payment rights arising from the purchase of Class A Interests of
Amgen Clinical Partners, L.P. (the "CCPRs"), for cash consideration per CCPR of
$240,000 (the "Purchase Price") upon the terms and subject to the conditions set
forth in this Offer to Purchase and the related Letter of Transmittal (which,
together with any amendments or supplements hereto or thereto, collectively
constitute the "Offer"). This Offer is made to all current holders of CCPRs
(each a "Holder"). IT IS IMPORTANT THAT YOU READ THE ENCLOSED MATERIAL
CAREFULLY IN ORDER TO EVALUATE THE OFFER.
Following are some important features of the Offer:
- OPPORTUNITY FOR LIQUIDITY. The Offer provides a Holder an opportunity to
liquidate his or her investment without transaction costs or commissions.
Although there are some limited resale mechanisms available to a Holder,
there is no formal trading market for the CCPRs and there can be no
assurance that one will develop.
- POSSIBLE TAX BENEFIT. A substantial portion of the Purchase Price should
be treated as a capital gain to the extent that the Purchase Price exceeds
such Holder's basis. The Taxpayer Relief Act of 1997 enacted into law on
August 5, 1997, generally reduces the maximum rate of tax on capital gain
for individuals, estates and trusts from 28% to 20%, subject to a minimum
holding period of 18 months. THE PURCHASER IS NOT EXPRESSING AN OPINION AS
TO THE TAX CONSEQUENCES OF TENDERING CCPRS. INVESTORS ARE STRONGLY ADVISED
TO CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES OF
ACCEPTING THE OFFER.
- ANTICIPATED SLOWER GROWTH IN NEUPOGEN SALES. Sales of Neupogen grew
rapidly following the product's launch in 1991, reaching $1,016 million in
1996. There can be no assurance, however, that sales will continue to grow
at a rate comparable to historical growth rates. According to the June 30,
1997 Form 10-Q of Amgen, "...worldwide Neupogen sales for 1997 are expected
to grow at a rate lower than the 1996 growth rate. Future Neupogen sales
increases are dependent primarily upon further penetration of existing
markets, the timing and nature of additional indications for which the
product may be approved and the effects of competitive products. Although
not approved or promoted for use in Amgen's domestic or foreign markets,
except for Australia, the Company believes that approximately 10% of its
worldwide Neupogen sales are from off-label use as a supportive therapy in
various AIDS-related treatments. Changes in AIDS therapies, including
therapies that may be less myelosuppressive, are believed to have adversely
affected and are expected to continue to adversely affect such sales.
Neupogen usage is expected to continue to be affected by cost containment
pressures on health care providers worldwide. In addition, international
Neupogen sales will continue to be subject to changes in foreign currency
exchange rates and government budgets."
- 25% REDUCTION IN PAYMENTS UNTIL ADVANCE PAYMENT IS RECOUPED. Quarterly
payments to Holders will be reduced by 25% beginning with the August 1997
payment (related to Neupogen sales made during the 2nd quarter of 1997)
until the $25,000 Advance Payment per CCPR has been recouped. Over the
last year, payments per quarter have averaged approximately $16,000 per
CCPR. As a result, based on the current payment rate, Purchaser estimates
that future payments per CCPR will be reduced by approximately $4,000 per
quarter for 6-7 quarters.
- VALUE OF THE CCPRs DEPENDENT ON ONE PRODUCT. The value of the CCPRs
depends exclusively on the right to receive cash payments based on the
future sales of Neupogen. Accordingly, any factor which adversely affects
sales of Neupogen could adversely affect the amount of the cash payments on
CCPRs.
▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
TEL: (▇▇▇)▇▇▇-▇▇▇▇ OR (▇▇▇)▇▇▇-▇▇▇▇ FAX: (▇▇▇)▇▇▇-▇▇▇▇ OR (▇▇▇)▇▇▇-▇▇▇▇
- CURRENT REALIZATION OF VALUE OF CCPRs. Quarterly payments on the CCPRs
will cease after the payment related to Neupogen sales in the fourth
quarter of 2005, after which Holders of CCPRs will no longer be entitled to
receive payments. The Offer provides an opportunity for Holders currently
to realize their investment in CCPRs. In the alternative, a Holder may
need to wait an additional 8 years to realize the full value of the CCPR.
- ESTATE PLANNING PURPOSES. The sale of a CCPR in connection with this Offer
provides current cash proceeds.
The Purchaser is engaged in a long-term investment program to create a
diversified portfolio of assets that derive cash flow from the sales of
biotechnology and pharmaceutical drugs. The Purchaser's financial structure and
strategic plan are geared to address risk factors such as illiquidity, single
product-risk, competition, and other factors which affect the value of assets
such as the CCPR, and its financial returns are largely dependent on the success
of its overall program, rather than any individual investment.
Please review the enclosed Offer to Purchase carefully. As this Offer is
available for a limited period of time, we urge you to tender your CCPRs
promptly by completing and signing page 2 of the Letter of Transmittal and
returning the Letter of Transmittal in the enclosed postage-paid envelope or by
facsimile to the information agent. The Offer will expire at 12:00 midnight,
New York City time, September 18, 1997.
If you have any questions or need assistance, please call the ▇▇▇▇▇▇ Group
at (▇▇▇) ▇▇▇-▇▇▇▇, or call PharmaInvest, L.L.C. at (▇▇▇) ▇▇▇-▇▇▇▇.
Sincerely,
PHARMAINVEST, L.L.C.
