- Additional Proxy Soliciting Materials (definitive) (DEFA14A)
March 18 2009 - 3:27PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY
STATEMENT
SCHEDULE 14A
INFORMATION
Proxy Statement Pursuant to
Section 14(a) of the Securities Exchange Act of 1934
(Amendment No.__)
Filed by the
Registrant
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Filed by a Party
other than the Registrant
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Check
the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §
240.14a-12
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A
VIGEN
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NC
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(Name of Registrant
as Specified In Its Charter)
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(Name of
Person(s) Filing Proxy Statement if Other Than the
Registrant)
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Payment of Filing Fee (Check the
appropriate box)
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No fee
required.
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Fee computed
on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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Title of each class of
securities to which transaction applies:
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Aggregate number of
securities to which transaction applies:
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Per unit price or other
underlying value of transaction computed pursuant to Exchange Act Rule
0-11 (Set forth the amount on which the filing fee is calculated and state
how it was determined):
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Proposed maximum
aggregate value of transaction:
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Total fee
paid:
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Fee paid
previously with preliminary materials.
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Check box if any part
of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and
identify the filing for which the offsetting fee was paid previously.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
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Amount Previously
Paid:
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Form, Schedule or
Registration Statement No.:
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Filing Party:
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9.
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Date Filed:
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On March 18, 2009, Avigen, Inc. mailed the
following letter to stockholders.
Leading Independent Advisory Service Urges
Avigen
Stockholders to Reject BVFs Proposal
Avigens Board Narrows Focus on Strongest
Improved Bids Through
Ongoing Competitive Process
Dear Shareholders,
We began
building the current Board in early 2006 and have consistently followed core
principals that reflect fiscal discipline and sound drug development strategies.
These characteristics, along with the decisive actions taken last fall to
safeguard the companys resources, have put your Board in a position to serve
the interests of all stockholders and maximize the value of your
investment.
Since
completing the sale of our hemophilia program for $7 million in mid-December,
Avigens stock has appreciated 50% and we believe that the Boards current
strategy will continue to add value through an open and competitive process to
evaluate potential merger transactions and a commitment to bring the strongest
deal, if any, to stockholders for a vote.
Leading independent advisory service is
recommending stockholders vote
AGAINST
BVFs Board removal
proposal
Glass Lewis
is one of the nations leading independent voting advisory services and has
reviewed the BVF Proposal to remove the current Avigen Board. As a firm that
reviews many contests for control, Glass Lewis believes that an independent and
knowledgeable Board is often in the best position to assess a companys
strategic alternatives for the benefit of all its stockholders. In Avigens
situation, Glass Lewis recommends that
shareholders would be best served by
allowing the current board to continue its competitive sale process and to
negotiate the highest value agreement for this Company. . . . We also make this
recommendation knowing that there are multiple parties interested in the Company
and given the boards commitment to return value to shareholders by year end
2009 in the event that no strategic agreement is negotiated.
The Board is
listening to all stockholders and working to find a balance that reflects the
range of preferences they have expressed. Avigens Board values all
stockholders perspectives in defining an optimal deal structure and has
encouraged BVF to consider accepting board seats or other observers rights that
would allow it to participate directly in the process. This would allow the
current competitive process to continue uninterrupted and without jeopardizing
the most promising opportunities on the table.
Your Board now has several proposals
that offer significant downside protection and is focusing on evaluating their
upside potential
Since
issuing our December 22, 2008 letter to stockholders, your Board has maintained
its commitment to implement a straightforward strategy to get more value for
stockholders than the companys current cash assets. After initiating an orderly
and competitive process to review strategic merger opportunities, your Board has
received multiple written proposals that significantly value Avigen above its
current stock price.
Your Board
believes it is in the best interests of stockholders to pursue a flexible deal
structure and bring the most attractive opportunity to a vote of stockholders as
soon as possible. In the current environment, we believe investors are most
attracted to companies with later-stage products and a lower risk profile. In
the last two months we have identified several opportunities that meet these
criteria. The strongest proposals received to date include most of the
following:
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(1)
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commercial or near commercial
products;
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(2)
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revenue or near-revenue
generating opportunity;
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(3)
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potential for sustainable
operations without the need for equity financings;
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(4)
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sales and marketing support from
a strong commercialization partner;
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(5)
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reduced remaining regulatory
risk;
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(6)
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attractive growth potential; and
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(7)
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willingness to provide liquidity
to Avigen stockholders who need or prefer cash.
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Your Board
has recently invited all bidders to provide an enhanced competitive best offer
so that the Board and management can narrow their focus on the strongest
proposals and accelerate the next stage of diligence. Several parties have
improved their original offers, demonstrating unequivocally the soundness of
this strategy and the likelihood that your Boards efforts will result in
greater value for stockholders.
We intend to
bring to stockholders the strongest proposal. All proposals contain a
significant liquidity option (i.e., downside protection) for stockholders that
were attracted to that feature in the MediciNova proposal which was publically
supported by BVF but, importantly, value Avigen above its current stock price.
The Boards focus is now on identifying which proposal best fits the criteria
above and is most likely to provide the greatest upside potential for Avigen
stockholders.
BVFs public support for the MedicNova
proposal overlooked the potential for improving the value through competitive
negotiations
By
unconditionally supporting the MediciNova proposal on December 29, 2008, and
encouraging the Board to bring the proposal to a shareholder vote
as soon as practical
, BVF may have overlooked other elements of the proposal that
did not fully value all of Avigens assets. By taking a measured approach, your
Board recognized five factors that it would like to address in negotiations to
enhance the value to Avigens stockholders:
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MediciNova is an early-stage development company
that, in our opinion, is
highly likely to
need to raise significant additional capital
in approximately the next year.
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MediciNova was trading at
$1.60 per share
on the
day of the public statement, and yet proposed that Avigen stockholders to
spend $7 million to buy MediciNova stock at $4.00 per share,
taking an immediate LOSS of
approximately $4.2 million
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MediciNova proposed holding Avigens remaining
cash for over a year, in the hopes that Avigens stockholders would buy more
MediciNova stock at the same fixed price of $4.00 per share or
250% of its then trading price
. In other words,
the
first $25 million
in
stock appreciation due from Avigens other assets (AV411 pain and addition
program and the Genzyme milestone) would accrue to MediciNova without
providing any upside benefit to Avigens stockholders.
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Most likely, these terms would lead to a cash
payout to Avigen stockholders in
June
2010
or later estimated at approximately
$0.91 per share
from their original Avigen holdings. During that year, Avigens cash
would be at risk to
MediciNovas creditors if
the company became insolvent, potentially leaving Avigen stockholders with
much less.
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Finally, MediciNova is an
extremely illiquid
stock
that most Avigen stockholders would find difficult to trade in the open market
without significantly depressing the price, which warranted concessions. For
example, during the fourth quarter of
2008,
MediciNova traded less than 1,000 shares per day on 48% of the 64 trading days
during the quarter and
zero shares on 10 of
those days.
In short,
while recognizing the value of some elements of the MediciNova proposal, your
Board was working first to establish an open and competitive review process in
which to hold direct negotiations to evaluate and improve those terms. While
respecting BVFs enthusiasm for downside protection, we believe their aggressive
early support undermined the ability of your Board to engage MediciNova in an
orderly process and may have prevented MediciNova from offering its best
proposal for all of Avigens assets.
Avigens Board urges stockholders to
reject BVFs proposal to remove the Board and avoid re-starting the competitive
process or jeopardizing the strongest proposals currently under review
BVF made a
shrewd investment when it recognized that Avigens assets were severely
undervalued after the negative clinical trial results reported last October.
This allowed BVF to acquire a 29% stake in Avigen at an estimated average price
of approximately $0.58 per share which they understandably want to protect.
Their best intentions, however, are handicapping the Boards effort to maximize
value for BVF and all stockholders and now risk losing several written proposals
by recommending removal of the full Board.
Your Board
has reduced expenses, preserved resources and monetized one of the companys
assets. Your Board is also increasing the upside for all stockholders through
its efforts to partner or sell Avigens AV411 pain and addiction program and in
running an open and competitive process designed to identify strategic merger
opportunities that we believe ALL stockholders will find attractive.
In the end,
your Board is committed to bringing the best transaction, if any, to
stockholders for a vote and providing a liquidity option for stockholders that
would prefer to redeem part, if not all, of their shares for cash. This process
is not intended to extend beyond the fourth quarter and could progress much
sooner.
Your Board
would like to work with BVF to ensure that all stockholders get the very best
outcome for their investment. We encourage stockholders to support this effort
and vote
AGAINST
the BVF proposal on the
WHITE
proxy card today. Your Board is
representing the interests of all stockholders
and is in the best position to complete a value maximizing transaction.
Respectfully,
Signed for the Board of Directors
Zola Horovitz, Ph.D. as Chairman of the
Board
Kenneth G. Chahine, Ph.D., J.D. as Chief
Executive Officer
Time is Short and Your Vote Is
Important -
If you have questions about the
last-minute voting of your shares, please contact the firm
assisting us in
the solicitation of proxies
:
INNISFREE M&A
INCORPORATED
Stockholders Call Toll-Free: (888) 750-5834
Banks and Brokers
Call Collect: (212) 750-5833
REMEMBER ONLY YOUR LATEST-DATED
VOTE COUNTS
We urge you NOT to sign any
Gold proxy card sent to you by BVF.
If you have already done so, you
have every legal right to change your vote.
To ensure that your shares are
represented, we encourage you to follow the easy
instructions on the enclosed
WHITE
proxy
card to vote by telephone or Internet today.
Supplemental
Information
In our proxy statement, dated March 9,
2009, provided to you in connection with the Special Meeting of Stockholders
(the Special Meeting) of Avigen, Inc., a Delaware corporation, which will be
held at Avigens offices at 1301 Harbor Bay Parkway, Alameda, California at 9:00
a.m. (local time) on Friday, March 27, 2009 for the purposes of voting on the
proposals set forth in the proxy statement, we provided to you information to
enable you to access our proxy materials, free of charge, on a web site. We are
now updating that information to provide you with the following link that
enables you to access all information that we provide to our stockholders. Our
proxy materials and all such other information may be accessed using the
following link:
https://www.eproxyaccess.com/avgn
Forward Looking Statements
The statements in this letter regarding
Avigens belief that the Boards current strategy will continue to add value
through an open and competitive process to evaluate potential merger
transactions, and that it will bring the strongest deal, if any, to stockholders
for a vote. Avigens intentions with respect to the structure of a transaction
and component to return cash to Avigens stockholders, Avigens anticipated
focus for the next year, and the other actions that Avigen intends to take over
the next year, are forward looking statements that are subject to risks and
uncertainties. Actual results may differ materially due to numerous risks,
including: potential partners or other entities may not value AV411 as much as
Avigen does; potential strategic transactions may not be able to be negotiated
with terms Avigen believes are in the best interests of all stockholders; Avigen
cannot guarantee that its remaining staff will remain with Avigen through 2009;
and other risks and uncertainties relating to Avigen detailed in reports filed
by Avigen with the Securities and Exchange Commission, including Avigen's Annual
Report on Form 10-K for the year ended December 31, 2008, under the caption
"Item 1A. Risk Factors in Part I of that report, which was filed with the SEC
on March 16, 2009.
Important Information
In connection with the solicitation of
proxies, Avigen filed with the Securities and Exchange Commission (the SEC)
and mailed to stockholders a definitive proxy statement dated March 9, 2009.
Avigens stockholders are urged to read the proxy statement and any other
relevant documents when they become available as they contain important
information. Stockholders may obtain additional free copies of the proxy
statement and other relevant documents filed with the SEC by Avigen through the
website maintained by the SEC at www.sec.gov. These documents can also be
obtained free of charge from Avigen at Avigens website at www.avigen.com under
the Investors tab. Stockholders may also contact Innisfree M&A
Incorporated with questions or requests for additional copies of the proxy
materials by calling toll free at (888) 750-5834.
Detailed information regarding the names, affiliations and interests of
individuals who are participants in the solicitation of proxies of Avigens
stockholders is available in Avigens definitive proxy statement filed with SEC
on March 9, 2009.
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