Reiterates Benefits of Proposed Merger with
Vaxart
Aviragen Therapeutics, Inc. (NASDAQ:AVIR) today issued a
letter to stockholders urging them to vote
FOR the
Company’s proposed merger with Vaxart at its Special Meeting of
Stockholders on February 6, 2018.
In the letter, Aviragen notes that the Company Board of
Directors unanimously recommends that stockholders vote
FOR the proposed merger on the
WHITE proxy card. The letter also highlights
that:
- Compared to the Company’s current market capitalization of
approximately $24 millioni, the potential value in the merger of
your Aviragen shares is $106 million, based on the value of
comparable companies.
- Aviragen stockholders will have the opportunity to participate
in the significant upside potential of the combined company, which
will be focused on developing Vaxart’s oral recombinant vaccines
and Aviragen’s direct-acting antivirals to treat infections having
limited therapeutic options.
- The Company’s Board conducted an extensive and diligent
evaluation of strategic alternatives before unanimously agreeing
the merger with Vaxart is in the best interest of all Aviragen
stockholders.
- The merger is opposed by a small group of stockholders. This
group has offered Aviragen stockholders no alternative value
creating plan to the proposed merger with Vaxart and is seeking to
elect a Board that has little or no experience in the biotechnology
industry. The group is led by Digirad, which made only a $681
investment in the Company, and whose Chairman, together with his
associates, was found by the SEC to have violated securities laws
and paid over $200,000 in fines and agreed to a cease and desist to
settle those charges.
The full text of the letter is below:
January 24, 2018
Dear Fellow Stockholder,
Aviragen’s Special Meeting of Stockholders to approve our
proposed merger with Vaxart – scheduled for February 6, 2018 – is
fast approaching.
At this meeting, you have an important choice to make regarding
the future of Aviragen. Your Board of Directors has conducted an
extensive review of strategic alternatives available to the
Company, and unanimously believes that the proposed merger with
Vaxart is in the best interests of and maximizes value for all
Aviragen stockholders. We believe that in approving the merger, you
will have shares that have the potential for substantial
appreciation in the near- and long-term – shares in a company with
leadership that has deep experience in biotechnology and drug
development.
A small group of dissident stockholders – who call themselves
the Concerned Aviragen Shareholders (“CAS”) Group – disagree with
your Board’s recommendation. Instead, this group is pursuing an
activist campaign against the transaction so that they have the
opportunity to nominate individuals for election to the Company’s
Board at our upcoming Annual Meeting. The CAS Group has
assembled a collection of participants with little or no experience
in the biotechnology industry and has told you nothing about what
they propose to do with your Company other than to suggest that
they will also explore “strategies” if they are able to have their
nominees elected to the Board. This will dissipate the Company’s
cash resources and make your investment in Aviragen less
valuable. Your Board believes that this group is
conducting a self-serving campaign at the expense of all Aviragen
stockholders.
Together, Aviragen and Vaxart will be poised to create
meaningful value for stockholders. Accordingly, your Board urges
you to vote FOR the proposals necessary to approve
the Vaxart merger, which the Board believes maximizes value for all
Aviragen stockholders.
CREATING A LEADING VACCINE COMPANY WITH
MULTIPLE OPPORTUNITIES FOR VALUE CREATION
The proposed merger of Aviragen and Vaxart will result in a
clinical-stage pharmaceutical company focused on developing
Vaxart’s oral recombinant vaccines and Aviragen’s direct-acting
antivirals to treat infections that have limited therapeutic
options. Vaxart’s oral tablet vaccines have the potential
to be major products in the worldwide vaccine market. If
Vaxart’s products under development are successfully completed,
vaccinations now requiring injections could be administered by
taking a pill, reducing the cost of vaccination and increasing the
ability to provide vaccinations globally. In a head-to-head
comparison with a leading injectable influenza vaccine, Vaxart’s
oral tablet vaccine delivered clinical proof of efficacy, and an
excellent safety profile that we believe significantly de-risks the
platform for all of its programs.
We believe there is substantial economic upside to Vaxart’s
transformative technology, and that the 40 percent interest that
Aviragen and its stockholders will have in this technology will
produce substantial value for you, in addition to the potential
value of our current anti-viral therapeutics. We believe that
the financial resources of the combined company and the
experienced biotechnology management and directorial team maximize
the likelihood of success.
Following completion of the transaction, the combined company
will be well-financed with a cash runway through the second
quarter of 2019. This will enable us to achieve value creating
milestones that include efficacy data from Aviragen’s
BTA074 HPV Phase 2 data, Vaxart’s Phase 2 norovirus vaccine data,
and the filing of additional INDs for new programs. The estimated
size of these various markets is below:
Market |
Global Vaccines |
Seasonal Influenza Vaccines |
HPV Therapeutic |
Cervical Cancer |
Norovirus(in the United
States) |
Annual Estimated Market Size |
More than $30 billion (in annual sales) |
$2.7 billion |
$1.6 billion |
$11.3 billion |
$5.5 billion (estimated cost) |
The combined company will be led by a veteran management team –
including Vaxart’s Chief Executive Officer Wouter Latour, M.D. –
with deep experience in vaccines and immunology and will be
overseen by a Board of Directors with extensive pharmaceutical and
biotechnology experience. Each member of your future Board
and management team has a proven track record in all key aspects of
the biopharmaceuticals industry.
MAXIMIZING THE VALUE OF
AVIRAGEN
Your Board unanimously believes that the proposed merger with
Vaxart maximizes value for and is in the best interests of all
Aviragen stockholders.
Based on the valuations of a selected set of
publicly traded vaccine companiesii, Vaxart’s estimated potential
valuation prior to the merger is approximately $158 million. Based
on the ownership structure in the transaction, this would imply a
value of the combined company at $264 million, with the potential
value of Aviragen in the merger being $106 million. This is a
significant improvement in value compared to Aviragen’s current
market capitalization of approximately $24
millioniii Following
completion of the transaction, Aviragen stockholders will own 40
percent of the combined company. This will provide all
Aviragen stockholders the opportunity to participate in the
significant upside potential that can be realized in the
merger.
VAXART
TRANSACTION IS THE RESULT OF AN EXTENSIVE REVIEW OF STRATEGIC
ALTERNATIVES
In April of 2017, your Board announced that it would be
conducting a process to review the Aviragen strategic alternatives.
Your Board formed an independent transactions committee that
evaluated a number of options, including a business combination or
strategic merger, in-licensing clinical stage programs,
acquisitions, liquidation and other transactions that would
complement Aviragen’s current assets.
Aviragen’s independent financial advisor, Stifel, at the
instruction of your Board, sent non-confidential materials to a
total of 65 parties. Aviragen received
indications of interest from 16 parties, including
Vaxart, and over the following months, the Company and its
advisors held multiple discussions and meetings with seven
parties.
As part of this process, your Board also reviewed and analyzed
the liquidation value of Aviragen. It was determined that, compared
to other unrealistic estimates that have been previously assumed by
others, the realistic liquidation value of Aviragen was
estimated at only $22.4 million – or $0.58 per share – as of
October 31, 2017. More importantly, there can be no
assurances as to the actual amount or timing of available cash left
to distribute to stockholders after paying debts, other obligations
and setting aside funds for reserves.
Taking all of these factors into account, your Board –
at the recommendation of the transactions committee – ultimately
accepted Vaxart’s offer as Aviragen’s directors unanimously agreed
that it was in the best interest of all of the Company’s
stockholders.
AVIRAGEN QUESTIONS THE TRUE MOTIVES OF
THE CAS GROUP AND ITS SELF-SERVING CAMPAIGN
The CAS Group – which is comprised of Digirad Corporation, East
Hill Management and Thomas Clay – is attempting to derail our
pending merger with Vaxart so that it has the opportunity to
replace your Board at our upcoming Annual Meeting of Stockholders.
Your Board takes its fiduciary duties very seriously.
Despite having recently purchased only 1,000 shares for
$681, Digirad is fronting the expenses of the CAS Group. You have
to ask yourself, with such a small investment, with no management
or board experience in drug development, and no stated alternative
plans for Aviragen that they will share with you, what is Digirad’s
real agenda? As you prepare to vote on the proposed
merger, your Board believes that it is important that Aviragen
stockholders have a more complete picture of the CAS Group:
- The CAS Group demonstrates a lack of understanding of
Aviragen’s business and the biotechnology industry: The
proxy statement filed by the CAS Group with the U.S. Securities and
Exchange Commission (“SEC”) contained numerous factual errors and
demonstrated a fundamental lack of understanding about Aviragen,
Vaxart, the pharmaceutical industry and biotechnology
companies.
- The CAS Group has no alternative plan to the
merger: The CAS Group has not provided you with any value
creating alternative to the proposed merger with Vaxart. All they
suggest is that they will also explore “strategies”, which will
dissipate the Company’s cash resources and make your investment in
Aviragen less valuable. Your Board believes this represents an
attempt by the CAS Group to take control of Aviragen without
appropriately compensating all Aviragen stockholders and asks that
you question whether the CAS Group’s interests are the same as
yours.
- Digirad has a track record of value
destruction: Since its current CEO was appointed on
September 1, 2014, Digirad’s share price has declined from $3.61
per share to its current price of $2.65 per share. This current
share price represents a decline of more than 58 percent from
Digirad’s peak share price over the last five years. Further, in
the spring of 2017, Digirad conducted a campaign to replace
directors at Birner Dental Management Services (“BDMS”). Since
Digirad’s nominees joined the BDMS board, BDMS’s share price has
fallen by more than 40 percent from $13.50 to $8.00iv. Is there any
reason why you would want the CAS Group’s nominees who have been
backed by the poor-performing Digirad to run your
company?
- Digirad’s role in the CAS Group should be
questioned: Digirad is a publicly traded company that is
spending more than $100,000 of its corporate funds on legal and
other fees related to its proxy solicitation for a total investment
in Aviragen of approximately $681, including broker commissions.
Both Aviragen and Digirad stockholders should question why Digirad
would spend such significant amounts of its stockholders’ money in
this campaign with an investment of only $681. You have to question
whether there are undisclosed financial arrangements among the CAS
Group, which could violate securities laws.
- Digirad’s Chairman of the Board, Jeffrey Eberwein, has
a history of securities laws violations: The SEC found
that Mr. Eberwein violated securities laws by depriving investors
“of key facts needed to make informed decisions” during a series of
activist campaigns. Mr. Eberwein and his hedge fund, Lone Star
Value Management, paid a fine of $210,000 and agreed to a cease and
desist to settle those chargesv. Would Aviragen stockholders want
their company to be under the control of people who have settled
multiple charges of securities laws violations?
VOTE FOR THE PROPOSED MERGER WITH VAXART
TODAY
EACH VOTE IS IMPORTANT
Each vote is extremely important, no matter how many or how few
shares are owned. The affirmative vote of the holders of a majority
of the shares of Aviragen common stock properly cast at the
Aviragen Special Meeting, presuming a quorum is present, is
required to approve the proposed merger. Aviragen stockholders of
record at the close of business on January 2, 2018 are entitled to
vote at the Special Meeting. Please take a moment to vote
FOR the proposals necessary to approve the
proposed merger today – by telephone, by Internet or by signing,
dating and returning the WHITE proxy card received
with the proxy statement. Please discard any BLUE
proxy card you may receive from the CAS Group.
If you have any questions or need assistance voting your shares
you should contact Aviragen’s proxy solicitor, D.F. King & Co.,
Inc., toll-free at (800) 967-5074.
On behalf of your Board of Directors, we thank you for your
continued support. We are confident that the proposed merger with
Vaxart is in the best interests of all Aviragen stockholders.
Sincerely,
/s/
/s/
Russ Plumb
Joseph Patti,
PhDChairman
Chief Executive Officer
Advisors
Stifel, Nicolaus & Company, Incorporated is acting as
financial advisor to Aviragen, and Dechert LLP is serving as legal
counsel to Aviragen.
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. It has three Phase 2
clinical stage compounds: BTA074 (teslexivir), an antiviral
treatment for condyloma caused by human papillomavirus types 6 and
11; vapendavir, a capsid inhibitor for the prevention or treatment
of rhinovirus upper respiratory infections; and BTA585
(enzaplatovir), a fusion protein inhibitor in development for the
treatment of respiratory syncytial virus infections. Aviragen also
receives royalties from marketed influenza products, Relenza® and
Inavir®. For additional information, 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 about
Aviragen Therapeutics, Inc. and Vaxart Inc., and their respective
businesses, business prospects, strategy and plans, including but
not limited to statements regarding the estimated value of the
combined company; anticipated preclinical and clinical drug
development activities, timelines and market opportunities; the
combined company being well-funded to advance its programs; and the
combined company’s ability to accelerate development of Vaxart’s
vaccine candidates and generate near and long term value for
stockholders. All statements other than statements of historical
facts included in this press release are forward looking
statements. The words “anticipates,” “may,” “can,” “plans,”
“believes,” “estimates,” “expects,” “projects,” “intends,”
“likely,” “will,” “should,” “to be,” and any similar expressions or
other words of similar meaning are intended to identify those
assertions as forward looking statements. These forward
looking statements involve substantial risks and uncertainties that
could cause actual results to differ materially from those
anticipated, including, without limitation: the risk that the
conditions to the closing of the merger are not satisfied, 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; and potential adverse reactions
or changes to business relationships resulting from the
announcement or completion of the merger. The vaccine candidates
that Vaxart develops may not progress through clinical development
or receive required regulatory approvals within expected timelines
or at all. In addition, future clinical trials may not confirm any
safety, potency or other product characteristics described or
assumed in this press release and such vaccine candidates may not
successfully commercialized. Additional factors that may
cause actual results to differ materially from such forward looking
statements include those identified under the caption “Risk
Factors” in the documents filed by Aviragen with the Securities and
Exchange Commission from time to time, including its
Proxy/Prospectus on Form S-4, Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q, and Current Reports on Form
8-K. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
press release. Except to the extent required by applicable law or
regulation, neither Aviragen nor Vaxart undertakes any obligation
to update the forward-looking statements included in this press
release to reflect subsequent events or circumstances.
Additional Information About the Merger and Where to
Find It
In connection with the proposed strategic merger, Aviragen and
Vaxart have filed relevant materials with the Securities and
Exchange Commission, or the SEC, including a registration statement
on Form S-4, as amended, that contains a prospectus and a joint
proxy statement. Investors may obtain the proxy
statement/prospectus, as well as other filings containing important
information about Aviragen, Vaxart and the merger, free of charge
at the SEC’s web site (www.sec.gov). In addition, investors and
security holders may obtain free copies of the documents filed with
the SEC by Aviragen by directing a written request to: Aviragen
Therapeutics, Inc. 2500 Northwinds Parkway, Suite 100, Alpharetta,
GA 30009, Attention: Corporate Secretary or delivered via email to
investors@aviragentherapeutics.com. Investors and security holders
are urged to read the proxy statement/prospectus and the other
relevant materials before making any voting or investment decision
with respect to the merger.
This communication shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offering of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended.
Participants in the Solicitation Aviragen and
Vaxart and their respective directors and officers and certain of
their other members of management and employees may be deemed to be
participants in the solicitation of proxies from the stockholders
of Aviragen in connection with the proposed transaction.
Information regarding the special interests of these directors and
executive officers in the merger are included in the proxy
statement/prospectus referred to above. Additional information
regarding the directors and executive officers of Aviragen is also
included in Aviragen’s Annual Report on Forms 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. These
documents are available free of charge from the sources indicated
above.
Contacts Mark ColonneseExecutive Vice President
and Chief Financial OfficerAviragen Therapeutics, Inc.(678)
221-3381
mcolonnese@aviragentherapeutics.com
Beth DelGiaccoStern Investor Relations, Inc.(212)
362-1200beth@sternir.com
Kristian KleinD.F. King & Co., Inc.(212) 232-2247
Winnie Lerner / Nick Leasure Finsbury(646) 805-2855
i Based on Aviragen’s closing share price on January 23, 2018.ii
Financial detail per FactSet, as of 1/9/2018. Note: equity values
are calculated using basic shares outstanding.iii Based on
Aviragen’s closing share price on January 23, 2018.iv Based on
Birner Dental Management Services’ closing share prices on June 20,
2017 and January 23, 2018.v Corrected Order Instituting
Cease-and-Desist Proceedings In the Matter of Jeffrey E. Eberwein,
et al. dated February 14, 2017, available at:
https://www.sec.gov/litigation/admin/2017/34-80038.pdf.
A photo accompanying this announcement is available
at: http://www.globenewswire.com/NewsRoom/AttachmentNg/7a21bcac-01c3-4c33-8add-63b6ac608a00
Vaxart (NASDAQ:VXRT)
Historical Stock Chart
From Mar 2024 to Apr 2024
Vaxart (NASDAQ:VXRT)
Historical Stock Chart
From Apr 2023 to Apr 2024