NEWS
RELEASE
For Immediate
Release
Contact:
Mark H.
Harnett
MacKenzie
Partners, Inc.
(212)
929-5877
BVF
WARNS STOCKHOLDERS: AVIGEN CONTINUES TO REMAIN SILENT ON DOWNSIDE
PROTECTION
AVIGEN’S
LATEST MOVES REINFORCE TROUBLING PATTERN OF DISMISSING ALTERNATIVES WHICH
PROTECT STOCKHOLDER VALUE
BVF
URGES AVIGEN BOARD TO CALL SPECIAL MEETING SO STOCKHOLDERS CAN VOTE FOR
DIRECTORS COMMITTED TO MAXIMIZING VALUE AND MINIMIZING RISK AND
WASTE
NEW YORK,
February 6, 2009 – BVF Acquisition LLC (the “Purchaser”), an affiliate of
Biotechnology Value Fund L.P. (“BVF”), announced today that it is gravely
concerned that today’s announcement by the Board of Directors of Avigen, Inc.
(NASDAQ:AVGN) that it is considering “strategic alternatives” is silent on
downside protection for all stockholders.
Speaking
on behalf of BVF, Mark Lampert, BVF’s General Partner, stated, “As the largest
stockholder in Avigen, holding 8,819,600, or approximately 29.63% of Avigen’s
outstanding shares, we are worried that this Board is embarking on a path that
will use the companies cash and valuable assets in a misguided transaction which
offers no downside protection to stockholders -- a key feature of the proposed
merger with MediciNova . The landscape is littered with numerous
parallels in which cash shells like Avigen have entered into transactions
promoted as value-creating, but which ultimately left investors holding nearly
worthless stock. Our nominees are committed to closing the
downside-protected merger with MediciNova. We are disappointed that
the current Board seems to be more interested in entrenching itself by means of
implementing golden parachutes and a poison pill, actions that we believe are
detrimental to the creation of value at Avigen. We reiterate our call
to the Avigen Board to institute downside protection for all
stockholders.”
Separately,
BVF is notifying the SEC of significant and blatant inaccuracies in Avigen’s
14D-9 filing. BVF will hold Avigen responsible for any harm caused to
BVF by these inaccuracies.
“We
believe Avigen’s board and management has a long history of failure and waste
and do not believe this Board should be making any decisions about Avigen’s
future. Any decision by this Board for the direction of Avigen should
be subject to a vote of stockholders,” Mr. Lampert said. “We note
that Avigen’s directors and officers own an aggregate of 48,233 shares of Avigen
stock, as opposed to BVF’s over 8.8 million shares. BVF shares the
interests of all stockholders in the direction of the Company, and has never
requested any benefit in which all stockholders would not fully
participate. Our tender offer provides other stockholders with a
liquidity option. We welcome any stockholders who do not wish to tender to
continue as holders alongside BVF.”
BVF
continues to urge the Avigen Board to stop stalling and to promptly call a
special meeting of stockholders to enable the true owners of the company, the
stockholders, to determine the fate of their investment. BVF
submitted a request on January 9, 2009 for Avigen to call special
meeting. Today, nearly one month later, the Company has taken no
action in this regard. At the special meeting, stockholders will be
asked to replace the existing Board with directors who would be dedicated to
maximizing value and minimizing risk and waste on behalf of all Avigen
stockholders. BVF believes that stockholders who are concerned about
the continuing destruction of value at Avigen – whether or not they intend to
tender their shares - should urge the Board to call a meeting as soon as
possible.
On
January 23, 2009, BVF commenced a tender offer at $1.00 per share, which
represented a premium of 35% over the closing stock price of $0.74 on January 8,
2009, the day before BVF announced its desire to replace Avigen’s incumbent
Board of Directors. Subsequent to the commencement of BVF’s tender,
Avigen’s stock price has increased to above the tender price. The
offer, which is not subject to any financing condition, was and is intended to
give certain stockholders, who desire near-term liquidity, an alternative to the
proposed merger with MediciNova. Each stockholder should make their
own decision on whether or not to tender.
The
tender offer is conditioned upon, among other things, the BVF nominees being
elected or appointed to the Avigen Board of Directors so that they would
constitute a majority of the Board. If placed on the Board, the BVF
nominees would, subject to their fiduciary duties, pursue merger negotiations
with MediciNova, Inc. or other actions that would be designed to enhance value
and minimize risk for all Avigen stockholders.
MacKenzie
Partners, Inc. is the Information Agent for the tender offer and any questions
or requests for the Offer to Purchase and related materials with respect to the
tender offer or the special meeting may be directed to MacKenzie Partners,
Inc.
THIS
PRESS RELEASE IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT AN OFFER TO BUY OR
THE SOLICITATION OF AN OFFER TO SELL ANY SHARES. THE SOLICITATION AND THE OFFER
TO BUY AVIGEN' COMMON STOCK IS ONLY BEING MADE PURSUANT TO AN OFFER TO PURCHASE
AND RELATED MATERIALS THAT THE PURCHASER HAS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION. STOCKHOLDERS SHOULD READ THESE MATERIALS CAREFULLY BECAUSE
THEY CONTAIN IMPORTANT INFORMATION, INCLUDING THE TERMS AND CONDITIONS OF THE
OFFER. STOCKHOLDERS ARE ABLE TO OBTAIN THE OFFER TO PURCHASE AND RELATED
MATERIALS WITH RESPECT TO THE TENDER OFFER FREE AT THE SEC'S WEBSITE AT
WWW.SEC.GOV OR FROM THE PURCHASER BY CONTACTING MACKENZIE PARTNERS, INC.
TOLL-FREE AT (800) 322-2885 OR COLLECT AT (212) 929-5500 OR VIA EMAIL AT
TENDEROFFER@MACKENZIEPARTNERS.COM.
CERTAIN
INFORMATION CONCERNING PARTICIPANTS
Biotechnology
Value Fund, L.P. (“BVF”), together with the other participants named herein, has
made a preliminary filing with the Securities and Exchange Commission (“SEC”) of
a proxy statement and accompanying GOLD proxy card to be used to solicit proxies
for the removal of the members of the Board of Directors of Avigen, Inc.
(“Avigen”), without cause, and for the election of BVF’s slate of director
nominees to replace the removed directors at a special meeting of stockholders,
to be called by Avigen at the request of BVF and Biotechnology Value Fund II,
L.P. (“BVF2”).
BVF
STRONGLY ADVISES ALL STOCKHOLDERS OF AVIGEN TO READ THE PROXY STATEMENT AND
OTHER PROXY MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO
CHARGE ON THE SEC’S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE
PARTICIPANTS IN THE SOLICITATION WILL PROVIDE COPIES OF THE PROXY STATEMENT
WITHOUT CHARGE UPON REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO THE
PARTICIPANTS’ PROXY SOLICITOR.
The
participants in the proxy solicitation are BVF, BVF2, BVF Investments, L.L.C.
(“BVLLC”), BVF Acquisition LLC (“BVF Acq”), Investment 10, L.L.C. (“ILL10”), BVF
Partners L.P. (“Partners”), BVF Inc. (“BVF Inc.”), Mark N. Lampert, Oleg
Nodelman, Matthew D. Perry and Robert M. Coppedge.
As of the
date of this filing, BVF beneficially owned 1,975,340 shares of Common Stock of
Avigen, BVF2 beneficially owned 1,364,911 shares of Common Stock of Avigen,
BVLLC beneficially owned 4,969,764 shares of Common Stock of Avigen and ILL10
beneficially owned 509,585 shares of Common Stock of Avigen.
BVF Acq
does not directly own any shares of Common Stock. As a member of a
“group” for the purposes of Rule 13d-5(b)(1) of the Securities Exchange Act of
1934, as amended, BVF Acq may be deemed to beneficially own the 8,819,600 shares
of Common Stock beneficially owned in the aggregate by the other Reporting
Persons. BVF Acq disclaims beneficial ownership of such
Shares.
As the
general partner of BVF and BVF2, the manager of BVLLC and the investment adviser
of ILL10, Partners may be deemed to beneficially own the 8,819,600 shares of
Common Stock of Avigen beneficially owned in the aggregate by BVF, BVF2, BVLLC
and ILL10. As the investment adviser and general partner of Partners,
BVF Inc. may be deemed to beneficially own the 8,819,600 shares of Common Stock
of Avigen beneficially owned by Partners. Mr. Lampert, as a director
and officer of BVF Inc. may be deemed to beneficially own the 8,819,600 shares
of Common Stock of Avigen beneficially owned by BFV Inc.
None of
Messrs. Nodelman, Perry or Coppedge directly owns any shares of Common Stock of
Avigen. As a members of a “group” for the purposes of Rule
13d-5(b)(1) of the Securities Exchange Act of 1934, as amended, each of Messrs.
Nodelman, Perry and Coppedge may be deemed to beneficially own the 8,819,600
shares of Common Stock of Avigen beneficially owned in the aggregate by the
other participants named herein. Each of Messrs. Nodelman, Perry and
Coppedge disclaims beneficial ownership of such shares of Common
Stock.
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