ALAMEDA, Calif., March 31, 2009 (GLOBE NEWSWIRE) -- Avigen, Inc. (Nasdaq:AVGN), a biopharmaceutical company, today announced that based on the final tabulation of votes reported by the independent Inspector of Election, Biotechnology Value Fund, LP (BVF) did not receive the necessary support from other Avigen stockholders to remove the company's current board of directors at Friday's Special Meeting of Stockholders and their proposal failed.
"Despite efforts to leverage its approximately 30% holding in the company and running a negative campaign," stated Zola Horovitz, Ph.D., Avigen's Chairman of the Board, "BVF was unsuccessful in its bid to remove Avigen's Board of Directors. We believe that BVF only succeeded in depriving other stockholders from an opportunity to vote on a strategic transaction with a cash option that could have represented significant additional value above the company's current assets."
Since requesting the Special Meeting almost three months ago on January 9, 2009, BVF's actions only drew support from 28% of the voting shares that BVF did not directly control. The remaining 42% of Avigen shares outstanding were either voted with the current Board or withheld from voting. Stockholders were informed that a withheld vote had the same effect as a vote in favor of the current Board, and Avigen heard from a number of stockholders that they would support of the current Board by not voting.
Since November, BVF has:
* Repeatedly refused proportionate Board representation,
* Refused confidential review of proposed upside transactions,
and
* Pushed forward with an expensive proxy fight that has now cost
Avigen stockholders nearly $1 million in unnecessary expense,
rather than entering into constructive discussions.
During this period, Avigen's Board and management have:
* Worked in the stockholders' best interests to preserve cash
by immediately downsizing the company in November,
* Sold an early-stage research program for $7 million, and
* Organized a competitive process to review strategic
alternatives which resulted in multiple written proposals that
valued Avigen significantly greater than book value, all of
which included a deal structure that would have allowed Avigen
stockholders that preferred liquidity, an option to redeem
part, if not all, of their shares for cash.
Since the initial decision to restructure in November, Avigen's Board has insisted that if it was not possible to offer stockholders an opportunity to vote on a favorable strategic transaction, it would seek to monetize its existing assets, including the company's ongoing AV411 pain and addiction drug program, in order to maximize the return to investors. Unfortunately, the Board concluded that BVF's ongoing actions have made further efforts to complete a transaction that is better than liquidation unlikely.
The Board is committed to working in the best interests of stockholders in developing a plan of liquidation in an expeditious manner.
None of the four proposals presented by BVF at the special meeting passed. These proposals were as follows:
* To remove, without cause, all six of the current directors of
Avigen.
* To amend Avigen's Bylaws to permit stockholders to elect
directors to the Board when the entire Board is vacant did not
pass.
* To elect as directors BVF's four nominees.
* To repeal any provision of Avigen's Bylaws effected after
January 8, 2009.
About AV411
AV411 is a first-in-class orally bioavailable small molecule, a glial attenuator that suppresses pro-inflammatory cytokines IL-1 beta, TNF alpha, and IL-6, and may upregulate the anti-inflammatory cytokine IL-10. While considered a New Molecular Entity (NME) in the United States and Europe, the drug was first approved in Japan more than 15 years ago. The drug has been prescribed to over one million patients for a different indication and has a good post-marketing safety profile in nearly 15,000 patients studied at the prescribed doses. Avigen is seeking to monetize AV411, its potential product for neuropathic pain and opioid withdrawal and methamphetamine addiction. Two generations of NMEs with pharmacological validation are included in the AV411 asset. Additional information on AV411 can be found on Avigen's website at www.avigen.com.
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