Vaxart Merger is the Result of an Extensive
Review of Strategic Alternatives and is in the Best Interest of ALL
Stockholders
Aviragen Therapeutics, Inc. (NASDAQ:AVIR) today issued the
following statement in response to a report by Institutional
Shareholder Services (“ISS”) regarding the Company’s proposed
merger with Vaxart, Inc.:
“ISS’s report contains numerous factual errors and we strongly
believe that ISS has reached the wrong conclusion in failing to
recommend that Aviragen stockholders vote FOR our
proposed merger with Vaxart.
ISS’s recommendation relies on “the hope that the board finds
another transaction that adequately compensates shareholders for
Aviragen's assets (cash, a public listing, and a royalty stream).”i
However, ISS itself notes that voting against the transaction
carries significant risk “as the board appears to have already run
an extensive process before selecting Vaxart as a merger
candidate.”i
- Since the announcement on April 4, 2017, Aviragen conducted a
public seven-month review of strategic alternatives; having
considered 167 parties for strategic transactions, Aviragen sent
non-confidential materials to 65 parties and received indications
of interest from 16 parties, including numerous unsolicited inbound
inquiries. No other parties have expressed interest in a
transaction with Aviragen since the proposed merger with Vaxart was
announced three months ago. Given the public nature of this review,
Aviragen does not understand how ISS can conclude that a more
attractive candidate than Vaxart may emerge. Should Aviragen
stockholders vote against the transaction, it is unlikely that
another strategic option will emerge.
- Aviragen notes that after the merger closes, there will only be
$5 million of debt outstanding. In its analysis, ISS incorrectly
states that following the merger, the combined company may have to
address its high leverage based on Vaxart’s $33.1 million in net
debt. In fact, nearly all of Vaxart’s debt will convert to equity
as part of the transaction – and it will convert at $1.44 per
share, a substantial premium over the current share price of
$0.60.
- ISS asserts that stockholders would benefit from preserving
their liquidation option, but in its analysis fails to indicate
that the liquidation value of $22.4 million in the proxy was
calculated as of October 31, 2017. Given the passage of time and
the costs of the Company’s ongoing clinical trial and the pending
proxy contest with the group led by Digirad, the Company expects to
spend approximately $8 million between last October and June 30,
2018, at which point the Company expects to obtain topline data
from the ongoing trial. Given the timing of topline data, Aviragen
notes that June 30, 2018 is the earliest it could consider
liquidating the Company.
- By voting down the proposed merger with Vaxart, stockholders
leave open the possibility that the group led by Digirad – with no
alternative plans for growing the Company, a proposed Board slate
with no experience in the biotechnology industry to evaluate the
Company’s assets, and a chairman found to have violated securities
law – could still take control of the Board.
- ISS has understated the chance of success for Vaxart’s
products. Vaxart has recently completed a successful Phase 2
clinical trial in which its influenza tablet vaccine performed very
well against the market-leading injectable flu
vaccine, proving that its oral tablet vaccine delivery
technology works in humans. Vaxart’s second program, a novel oral
vaccine for norovirus, has already demonstrated robust immune
responses in human clinical trials. The proposed merger with Vaxart
will create a leading vaccine company with multiple opportunities
for value creation. Importantly, the combined company will be
well-financed with little debt and a cash runway through the second
quarter of 2019. The combined company will be led by an experienced
biotechnology management and directorial team, maximizing the
likelihood of success.
Aviragen’s Board and management team continue to believe
approving the proposed merger with Vaxart represents the best path
forward for Aviragen and its stockholders. Accordingly, Aviragen
strongly recommends stockholders vote FOR the
proposed merger with Vaxart.”
EACH VOTE IS IMPORTANT – PLEASE VOTE FOR
THE PROPOSED MERGER WITH VAXART TODAY - EACH VOTE
IS IMPORTANT
The Aviragen Board unanimously recommends that stockholders vote
FOR the proposed merger. 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
proxy card received with the proxy statement.
If you have any questions or need assistance voting your shares,
please contact our proxy solicitor, D.F. King & Co., Inc.,
toll-free at (800) 967-5074.
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 (RV) 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 anticipated preclinical and
clinical drug development activities, timelines and market
opportunities; the combined company being well-funded to advance
its programs; the potential of Vaxart’s flu vaccine to produce
better efficacy and in a timely manner; 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 LeasureFinsbury(646) 805-2855
i Permission to use quotations neither sought nor obtained
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