UNITED
STATED
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
6-K
REPORT
OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE
SECURITIES
EXCHANGE ACT OF 1934
For
the month of December, 2009
Commission
File Number 000-22286
Taro
Pharmaceutical Industries Ltd.
(Translation
of registrant’s name into English)
Italy
House, Euro Park, Yakum 60972, Israel
(Address
of principal executive office)
Indicate
by check mark whether the registrant files or will file annual reports under
cover of Form 20-F or Form 40-F.
Form
20-F x
Form 40-F ¨
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(1): _____
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(7): _____
Indicate
by check mark whether the registrant by furnishing the information contained in
this Form is also thereby furnishing the information to the Commission pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of
1934. Yes ¨
No x
If
“Yes” is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82-_____.
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December 10,
2009
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Dear
Fellow Shareholder:
Taro's
Annual General Meeting, scheduled for December 31, 2009, is fast
approaching. Please immediately
sign, date and return the enclosed form of proxy, or vote by telephone or
Internet if you have not done so already. Every vote is important,
regardless of the number of shares you own.
Why
Is Your Vote So Important?
Last
week, we reported to you on Taro’s continuing financial and operating
progress. We also detailed the efforts of Sun Pharmaceutical
Industries Ltd. to seize control of your company at a price that is not only
below current market prices, but also below what Sun has paid to acquire shares
from certain large holders of Taro shares. We believe Sun's actions
are not in your best interests, and we urge you to resist them by keeping your
current Board in office.
In
addition to the financially inadequate price Sun is offering, you should be
aware of the serious corporate governance and legal controversies facing Sun as
a result of its stewardship of Caraco Pharmaceutical Laboratories, Ltd., a U.S.
based company in which Sun controls a majority of the shares.
We
believe that Sun's conduct at Caraco raises serious questions about what may
happen to minority shareholders of Taro if Sun is able to gain control of your
company.
Since
Sun acquired its majority interest in Caraco, it has acted in Sun’s best
interests, not the best interests of the other Caraco
shareholders. To start with, Sun appointed a majority of Caraco's
directors. On their
watch, Caraco's margins and profits have declined, and Sun has entered into
arrangements with Caraco on terms that are beneficial to Sun. As a result of
these and other actions, the value of Caraco has deteriorated
significantly. In the last eighteen months, Caraco's stock price has
declined over 65 percent, from $17.22 as of May 30, 2008 to $5.89 as
of December 10, 2009, and lawsuits by unhappy Caraco shareholders
ensued.
Perhaps
most disturbingly, Caraco’s operations have been seriously
compromised. Recently, the U.S. Food and
Drug Administration has taken the extraordinary step of seizing Caraco's
inventories and effectively closing down its manufacturing operations as
a result of the continuing failure by Caraco to comply with FDA
standards. In a media briefing called to discuss the seizure, an FDA
spokesperson said “…we also observed poor decisions being made by the company’s
[Caraco’s] management who are responsible for the quality of the drug products
being manufactured.”
The FDA
is not Sun’s only critic. Georges Ugeux, the Chairman of Caraco’s
independent directors’ committee, resigned from the Caraco Board, stating in a
letter filed with the Securities and Exchange Commission: “…as I have reiterated consistently…,
the basis for my disagreement is [Caraco’s] management’s and the majority
shareholder’s [Sun’s] absolute refusal to permit a focused independent look at
corporate governance matters to determine if they contributed to the
events leading up to the FDA seizure.” (Emphasis added)
How has Sun addressed the continuing
operational failures at Caraco?
Sun has
made public statements about possibly moving Caraco’s
manufacturing to India. Yet even this “home field advantage” may
prove to be illusory: Sun has now also run afoul of India’s own domestic
regulator. In October 2009, India’s Drugs Technical Advisory Board,
its highest body on technical matters pertaining to the pharmaceutical industry,
said it would investigate whether appropriate approval procedures were followed
in allowing Sun to market the cancer
drug letrozole as a treatment for infertility, on the basis of clinical
trials involving a study of only 55 women. Femara®, the branded form
of letrozole, states in its package insert that “You should not take Femara® if
you are premenopausal … as it may cause harm to
an unborn child.”1 (Emphasis
added)
_____________________________
1
Femara’s® package insert states: “You should not take
Femara® if you are premenopausal. Your doctor should discuss
the need for adequate birth control if you have the potential to become
pregnant, if you are not sure of your postmenopausal status, or if you recently
became postmenopausal. Femara® is only indicated in
postmenopausal women.…You should not take Femara® if you are
pregnant as it may cause harm to an unborn child….”
Taro
Pharmaceutical Industries Ltd.
How
Did Sun Deal With This Serious Issue?
Despite
the serious concerns reflected by the Indian regulators' investigation
announcement, Sun continues to market this drug as an infertility treatment for
premenopausal women in India, on the basis of Sun’s own clinical studies, the
adequacy of which is now being questioned. Outside of India, the drug is
approved ONLY as a breast cancer treatment in postmenopausal
women.
The
Bottom Line: Sun Has Been Bad for Caraco and Sun Could Be a Disaster for Your
Investment in Taro
We urge all Taro shareholders to ask
themselves, if this is how Sun has behaved since gaining control of Caraco, will
it treat Taro and its shareholders any differently if it succeeds in gaining
control of your company?
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Will
Sun cause Taro to run afoul of FDA regulations and encounter the kind of
serious regulatory failures that have occurred during Sun's ownership of
Caraco?
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Will
it operate Taro to maximize profits for minority shareholders, or will it
cause Taro to enter into one-sided agreements that are beneficial only to
Sun?
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Will
you ever have the opportunity to realize a full and fair price for your
Taro shares, if Sun is in a position to appoint a majority of Taro's board
of directors?
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What
Should You Do Now?
As we
explained in our last letter to you, Taro has been performing well under the
guidance of your current Board, five of whose eight members are independent of
management. The Board supports the strategic business plan that your
management is pursuing, which has produced strong and improving cash flows, a
reduction in the level of outstanding debt, and solid progress in Taro’s product
line, including some exciting new developments with T2000, as reported in our
last letter to you.
We
urge you to keep your current Board in place. Please execute and
return the enclosed proxy card to show your support for Taro’s nominees and the
future of an independent and successful Taro.
Sincerely,
/s/
Barrie Levitt, M.D.
Barrie
Levitt, M.D.
Chairman
If
you have any questions or need any assistance voting your proxy, please contact
us at taro@georgeson.com or call Georgeson Inc., our proxy solicitor, between
the hours of 9:00 am and 11:00 pm EST, Monday through Friday. U.S.
and international shareholders may call toll-free
+1-866-741-9588. Banks and brokers may call
+1-212-440-9800. European and Israeli institutional investors may
call +39-06-421-71-777.
SAFE
HARBOR
Certain statements in this letter
may be considered forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, including statements regarding the
Company’s financial turnaround, profitability, operations and
performance. Although Taro Pharmaceutical Industries Ltd. believes
the expectations reflected in such forward-looking statements to be based on
reasonable assumptions, it can give no assurance that its expectations will be
attained. Factors that could cause actual results to differ include industry and
market conditions; changes in the Company’s financial position; regulatory
actions; and, other risks detailed from time to time in the Company’s SEC
reports, including its Annual Reports on Form 20-F. Forward-looking statements speak
only as of the date on which they are made. The Company undertakes no obligation
to update, change or revise any forward-looking statements, whether as a result
of new information, additional or subsequent developments or
otherwise.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Date: December
10, 2009
TARO
PHARMACEUTICAL INDUSTRIES LTD.
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By:
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/s/ Tal
Levitt
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Name: Tal
Levitt
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Title: Director
and Secretary
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