Progen reiterates support for merger with Avexa

By Jennifer Chiou

New York, Jan. 30 - The directors of Progen Pharmaceuticals Ltd. said that they confirm their unanimous recommendation for the proposed merger with Avexa Ltd.

The board added that it believes that the current merger proposal with Avexa has the potential to deliver value in excess of A$1.35 per share and is in the best interests of shareholders as a whole.

According to a news release, since July 2008, Progen has been assessing many different opportunities for the company to expand its portfolio to once again include later-stage, closer-to-market drug candidates, and the Avexa merger represents an excellent opportunity for Progen to do this.

Avexa's lead compound is apricitabine, an anti-HIV drug that is currently in a phase 3 trial and has been granted accelerated review and fast track status by the Food and Drug Administration, the company said, adding that Avexa expects to release initial week-16 data results shortly after merger completion and week-24 data results in late 2010.

Progen said that its shareholders will receive extensive information in early February on the proposed buyback offer and the proposed merger and the advantages and risks associated with the proposed merger.

A general meeting of Progen will be scheduled for the first week in March to consider the merger and approval of the proposed buyback, the company added.

Progen said that it expects the merger to be fully implemented by mid-April, assuming court approval.

Progen added that its shareholders may:

• Maintain their shareholding in the merged company to be called Avexa Pharmaceuticals Ltd. with the implied per-share value of the merged group to Progen shareholders at A$1.35;

• Sell their shares into the buyback at a price of A$1.10 per share; or

• Sell part of their shares into the buyback and maintain part of their shareholding in the merged company.

The board said that capping the proposed off-market share buyback at A$20 million, equating to 18.18 million shares or just under one-third of Progen's current shares on issue, balances the desire of shareholders for a significant cash return while providing sufficient cash in the merged entity to progress the combined portfolio.

Merger alternatives

Progen noted that it has received a number of enquiries as to the intentions of the board if the merger with Avexa does not proceed.

The company said that at its 2008 general meeting, its board indicated that if no merger transaction is deemed able to deliver a value to shareholders in excess of A$1.10 per share through its strategic review by mid-January, then it would be the intention of the board to recommend that the entire capital of the company be returned to shareholders.

If the Avexa merger does not proceed for any reason, the Progen board added that it will be obliged to again consider all available options, including a transaction with another biotechnology company.

Brisbane, Australia-based Progen is a biotechnology company committed to the discovery, development and commercialization of small molecule pharmaceuticals primarily for the treatment of cancer.

Avexa is a Melbourne-based biotechnology company with a focus on discovery, development and commercialization of small molecules for the treatment of infectious diseases.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.