Aviragen Therapeutics, Inc. (NASDAQ:AVIR) today announced its
financial results for the three months ended September 30,
2017.
“Earlier this week we were pleased to announce
the culmination of our strategic review process with the signing of
a definitive merger agreement with Vaxart, which we believe
complements Aviragen’s focus on infectious diseases. With recently
reported positive safety and efficacy data in both influenza and
norovirus, Vaxart is well-positioned to create both short and
long-term value for our stockholders,” said Joseph M. Patti, Ph.D.,
President and Chief Executive Officer of Aviragen
Therapeutics. “Post-merger, we believe that Vaxart will be well
funded to advance its norovirus and HPV oral tablet vaccine
programs, and together with BTA074, the combined companies are
poised to provide several meaningful value creation clinical data
readouts.”
Corporate Update:
Proposed Merger with
Vaxart:
The exchange ratio in the merger agreement was
determined by Vaxart assigning $60,000,000 in value to Aviragen for
its financial and clinical assets, and $90,000,000 in value for its
own assets. On a pro forma basis after giving effect to the number
of shares of Aviragen common stock issued to Vaxart security
holders in the merger, current Vaxart security holders will own
approximately 60% of the combined company and current Aviragen
security holders will own approximately 40% of the combined
company. The transactions have been approved by the boards of
directors of both companies. The merger is expected to close in the
first quarter of calendar year 2018, subject to the approval of the
stockholders of each company as well as other customary
conditions.
Upon closing of the transaction, the name of the
combined company will become Vaxart, Inc. and shares of the
combined company are expected to continue trading on the NASDAQ
Capital Market under the proposed ticker symbol VXRT. Wouter
Latour, M.D., will serve as Chief Executive Officer of the combined
company.
BTA074 (teslexivir):
The Phase 2 trial of BTA074, a topical antiviral
treatment for condyloma caused by human papillomavirus (HPV), is
ongoing and the Company anticipates that enrollment in the 210
patient trial will be completed in the fourth quarter of calendar
year 2017. Top-line safety and efficacy data is expected in the
second quarter of calendar year 2018.
Financial Results for the Three Month
Period Ended September 30, 2017
The Company reported a net loss of $5.3 million
for the three month period ended September 30, 2017, as compared to
a net loss of $10.0 million in the same quarter of the prior fiscal
year. Basic and diluted net loss per share was $0.14 for the three
month period ended September 30, 2017, as compared to a basic and
diluted net loss per share of $0.26 in the same period in 2016. The
major components of net loss in both periods are detailed
below.
Revenue was $0.1 million for the three month
periods ended September 30, 2017 and 2016. The 2017 revenue relates
to $0.1 million in non-cash royalty revenue related to certain
royalty rights that were sold to HealthCare Royalty Partners III,
L.P. (HCRP) in April 2016 and the cash will be passed through to
HCRP. The 2016 revenue was comprised of $0.1 million in Relenza
royalties.
Research and development expense decreased to
$2.8 million for the three month period ended September 30, 2017
from $7.6 million in the same period in 2016. The $4.8 million
decrease largely reflected reduced clinical trial activity and
manufacturing costs as two of our three Phase 2 clinical trials
finished in the third quarter of fiscal 2017.
General and administrative expense increased to
$2.3 million for the three month period ended September 30, 2017
from $2.2 million for the same period in 2016 due mostly to higher
legal fees.
The Company held $34.1 million in cash, cash
equivalents, and short-term investments as of September 30,
2017.
About Aviragen Therapeutics
Aviragen Therapeutics is focused on the
discovery and development of the next generation of direct-acting
antivirals to treat infections that have limited therapeutic
options and affect a significant number of patients globally. The
Company has three Phase 2 clinical stage compounds: BTA074
(teslexivir), an antiviral treatment for condyloma caused by human
papillomavirus types 6 & 11; vapendavir, a capsid inhibitor for
the prevention or treatment of rhinovirus (RV) upper respiratory
infections; and BTA585 (enzaplatovir), a fusion protein inhibitor
in development for the treatment of respiratory syncytial virus
infections. The Company also receives royalties from marketed
influenza products, Relenza® and Inavir®. For additional
information about the Company, please visit
www.aviragentherapeutics.com.
Aviragen Therapeutics® is a registered
trademark. Relenza® is a registered trademark of GlaxoSmithKline
Pharmaceuticals, Ltd., and Inavir® is a registered trademark of
Daiichi Sankyo Company, Ltd.
Forward-Looking Statements
This press release contains forward-looking
statements (including within the meaning of Section 21E of the
United States Securities Exchange Act of 1934, as amended, and
Section 27A of the United States Securities Act of 1933, as
amended) concerning Aviragen, Vaxart, the Merger and other
matters. These statements may discuss goals, intentions and
expectations as to future plans, trends, events, results of
operations or financial condition, or otherwise, based on current
beliefs of the management of Aviragen, as well as assumptions made
by, and information currently available to, management.
Forward-looking statements generally include statements that are
predictive in nature and depend upon or refer to future events or
conditions, and include words such as “may,” “will,” “should,”
“would,” “expect,” “anticipate,” “plan,” “likely,” “believe,”
“estimate,” “project,” “intend,” and other similar expressions
among others. Statements that are not historical facts are
forward-looking statements. Forward-looking statements are based on
current beliefs and assumptions that are subject to risks and
uncertainties and are not guarantees of future performance. Actual
results could differ materially from those contained in any
forward-looking statement as a result of various factors,
including, without limitation: the risk that the conditions to the
closing of the Merger are not satisfied, including the failure to
timely or at all obtain stockholder approval for the Merger;
uncertainties as to the timing of the consummation of the Merger
and the ability of each of Aviragen and Vaxart to consummate the
Merger; risks related to Aviragen’s ability to correctly estimate
its operating expenses and its expenses associated with the Merger;
risks related to the market price of Aviragen’s common stock
relative to the exchange ratio; the ability of Aviragen or Vaxart
to protect their respective intellectual property rights;
competitive responses to the Merger; unexpected costs, charges or
expenses resulting from the Merger; potential adverse reactions or
changes to business relationships resulting from the announcement
or completion of the Merger; provisions in certificate of
incorporation, bylaws and laws of Delaware containing provisions
that could delay or discourage a change in control of the Company;
and legislative, regulatory, political and economic developments.
The foregoing review of important factors that could cause actual
events to differ from expectations should not be construed as
exhaustive and should be read in conjunction with statements that
are included herein and elsewhere, including the risk factors
included in Aviragen’s most recent Annual Report on Form 10-K, and
Aviragen’s recent Quarterly Report on Form 10-Q and Current Reports
on Form 8-K filed with the SEC. Aviragen can give no assurance that
the conditions to the Merger will be satisfied. Except as required
by applicable law, Aviragen undertakes no obligation to revise or
update any forward-looking statement, or to make any other
forward-looking statements, whether as a result of new information,
future events or otherwise.
No Offer or Solicitation
This communication is not intended to and does
not constitute an offer to sell or the solicitation of an offer to
subscribe for or buy or an invitation to purchase or subscribe for
any securities or the solicitation of any vote in any jurisdiction
pursuant to the Merger or otherwise, nor shall there be any sale,
issuance or transfer of securities in any jurisdiction in
contravention of applicable law. No offer of securities shall
be made except by means of a prospectus meeting the requirements of
Section 10 of the United States Securities Act of 1933, as amended.
Subject to certain exceptions to be approved by the relevant
regulators or certain facts to be ascertained, the public offer
will not be made directly or indirectly, in or into any
jurisdiction where to do so would constitute a violation of the
laws of such jurisdiction, or by use of the mails or by any means
or instrumentality (including without limitation, facsimile
transmission, telephone and the internet) of interstate or foreign
commerce, or any facility of a national securities exchange, of any
such jurisdiction.
Important Additional Information Will be
Filed with the SEC
In connection with the proposed transaction
between Aviragen and Vaxart, Aviragen intends to file relevant
materials with the SEC, including a registration statement that
will contain a proxy statement and prospectus. AVIRAGEN URGES
INVESTORS AND STOCKHOLDERS TO READ THESE MATERIALS CAREFULLY AND IN
THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT AVIRAGEN, THE MERGER AND RELATED
MATTERS. Investors and shareholders will be able to obtain
free copies of the proxy statement, prospectus and other documents
filed by Aviragen with the SEC (when they become available) through
the website maintained by the SEC at www.sec.gov. In
addition, investors and shareholders will be able to obtain free
copies of the proxy statement, prospectus and other documents filed
by Aviragen with the SEC by contacting Aviragen Therapeutics, Inc.,
2500 Northwinds Parkway, Suite 100, Alpharetta, Georgia 30009,
Attention: Corporate Secretary or delivered via e-mail to
investors@aviragentherapeutics.com. Investors and
stockholders are urged to read the proxy statement, prospectus and
the other relevant materials when they become available before
making any voting or investment decision with respect to the
Merger.
Participants in the
Solicitation
Aviragen and Vaxart, and each of their
respective directors and executive officers and certain of their
other members of management and employees, may be deemed to be
participants in the solicitation of proxies in connection with the
Merger. Information about Aviragen’s directors and executive
officers is included in Aviragen’s Annual Report on Form 10-K for
the year ended June 30, 2017, filed with the SEC on September 1,
2017, and the Form 10-K/A filed with the SEC on October 20,
2017. Additional information regarding these persons and
their interests in the Merger will be included in the proxy
statement relating to the Merger when it is filed with the SEC.
These documents can be obtained free of charge from the sources
indicated above.
Contacts:
Mark ColonneseExecutive Vice President and Chief Financial
OfficerAviragen Therapeutics, Inc.(678)
221-3381mcolonnese@aviragentherapeutics.com
Beth DelGiaccoStern Investor Relations, Inc.(212)
362-1200beth@sternir.com
AVIRAGEN THERAPEUTICS, INC. |
|
CONDENSED CONSOLIDATED BALANCE
SHEETS |
|
(in millions, except per share amounts) |
|
|
September 30,2017 |
|
June 30,2017 |
|
(unaudited) |
|
(audited) |
ASSETS |
Current assets: |
|
|
|
Cash and
cash equivalents |
$ |
19.6 |
|
|
$ |
17.7 |
|
Short-term investments |
|
14.5 |
|
|
|
20.9 |
|
Accounts
receivable, net of allowance |
|
0.1 |
|
|
|
0.6 |
|
Prepaid
and other current assets |
|
0.3 |
|
|
|
0.7 |
|
Total
current assets |
|
34.5 |
|
|
|
39.9 |
|
Non-current
assets: |
|
|
|
Property
and equipment, net |
|
0.2 |
|
|
|
0.2 |
|
Total
non-current assets |
|
0.2 |
|
|
|
0.2 |
|
Total
assets |
$ |
34.7 |
|
|
$ |
40.1 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’
EQUITY |
Current
liabilities: |
|
|
|
Accounts
payable |
$ |
1.3 |
|
|
$ |
1.4 |
|
Accrued
expenses |
|
2.2 |
|
|
|
2.9 |
|
Short-term note payable |
|
0.2 |
|
|
|
0.2 |
|
Liabilities related to sale of future royalties, net of deferred
financing costs |
|
1.5 |
|
|
|
1.4 |
|
Total
current liabilities |
|
5.2 |
|
|
|
5.9 |
|
Non-current
liabilities: |
|
|
|
Long-term
note payable, net of current portion |
|
0.1 |
|
|
|
0.1 |
|
Liabilities related to sale of future royalties, net of deferred
financing costs and current portion |
|
15.4 |
|
|
|
15.3 |
|
Other
long-term liabilities, net of current portion |
|
0.1 |
|
|
|
0.1 |
|
Total
liabilities |
|
20.8 |
|
|
|
21.4 |
|
Stockholders’
equity: |
|
|
|
Preferred
stock, $0.10 par value; 5,000,000 shares authorized and none issued
and outstanding as of September 30, 2017 and June 30, 2017 |
|
- |
|
|
|
- |
|
Common
stock, $0.10 par value; 200,000,000 shares authorized 38,649,237
shares issued and outstanding at both September 30, 2017 and June
30, 2017. |
|
3.9 |
|
|
|
3.9 |
|
Additional paid-in capital |
|
160.1 |
|
|
|
159.6 |
|
Accumulated other comprehensive income |
|
19.0 |
|
|
|
19.0 |
|
Accumulated deficit |
|
(169.1 |
) |
|
|
(163.8 |
) |
Total
stockholders’ equity |
|
13.9 |
|
|
|
18.7 |
|
Total
liabilities and stockholders’ equity |
$ |
34.7 |
|
|
$ |
40.1 |
|
AVIRAGEN THERAPEUTICS, INC. |
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
|
|
(in millions, except per share amounts) |
|
|
|
(unaudited) |
|
|
|
|
Three Months Ended September 30, |
|
|
2017 |
2016 |
|
Revenue: |
|
|
|
Royalty
revenue |
$ |
- |
|
$ |
0.1 |
|
|
Non-cash
royalty revenue related to the sale of future royalties |
|
0.1 |
|
|
- |
|
|
Total revenue |
|
0.1 |
|
|
0.1 |
|
|
|
|
|
|
Operating expense: |
|
|
|
Research
and development |
|
2.8 |
|
|
7.6 |
|
|
General
and administrative |
|
2.3 |
|
|
2.2 |
|
|
Foreign
exchange loss (gain), net |
|
- |
|
|
(0.1 |
) |
|
Total operating
expense |
|
5.1 |
|
|
9.7 |
|
|
Loss from
operations |
|
(5.0 |
) |
|
(9.6 |
) |
|
|
|
|
|
Non-operating income
(expense): |
|
|
|
Non-cash
interest expense on liability related to sale of future
royalties |
|
(0.4 |
) |
|
(0.4 |
) |
|
Interest
income (expense), net |
|
0.1 |
|
|
- |
|
|
Total non-operating
income (expense) |
|
(0.3 |
) |
|
(0.4 |
) |
|
|
|
|
|
Loss before tax |
|
(5.3 |
) |
|
(10.0 |
) |
|
Income tax expense |
|
- |
|
|
- |
|
|
Net loss |
$ |
(5.3 |
) |
$ |
(10.0 |
) |
|
|
|
|
|
|
|
|
|
Basic and diluted loss
per share |
$ |
(0.14 |
) |
$ |
(0.26 |
) |
|
|
|
|
|
|
|
|
|
Basic and diluted
weighted-average shares outstanding |
|
38,649,237 |
|
|
38,640,487 |
|
|
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