Progen Pharmaceuticals shareholder opposed to merger with Avexa

By Lisa Kerner

Charlotte, N.C., Feb. 25 - Progen Pharmaceuticals Ltd. investor Cytopia Ltd. urged fellow shareholders to vote against Progen's proposed merger with Avexa Ltd. at the company's general meeting on March 11.

A group of shareholders led by Cytopia, a Melbourne, Australia, biotechnology company, also requisitioned a special meeting be held, which Progen scheduled for March 27.

At the second meeting, Cytopia wants shareholders to vote on two proposals:

• A full share buyback offer of A$1.10 per share accessible to all Progen shareholders; and

• Removal of the current board and appointment of three new independent directors.

Cytopia said it will put forth a motion to adjourn the March 11 meeting until March 27 so that the Avexa merger and board replacement resolutions will be considered in conjunction with each other.

According to Cytopia, Progen will not put the buyback offer to a shareholder vote and refused to combine the two meetings at shareholders' expense.

Progen directors unanimously recommended the merger with Avexa, saying that it has the potential to deliver value in excess of A$1.35 per share and is in the best interests of the company's shareholders.

It was previously reported that Progen shareholders may:

• Maintain their shareholding in the merged company to be called Avexa Pharmaceuticals Ltd. with an implied per-share value of the merged group to Progen shareholders of A$1.35;

• Sell their shares into a proposed buyback at a price of A$1.10 per share; or

• Sell part of their shares into the buyback and maintain part of their shareholding in the merged company.

Cytopia said it opposes the merger with Avexa in part because an estimated A$155 million is needed to complete phase III of Avexa's HIV drug and the drug may take four years to reach registration.

If the Avexa merger does not proceed for any reason, the Progen board said that it will be obliged to again consider all available options, including a transaction with another biotechnology company.

Brisbane, Australia-based Progen is a biotechnology company committed to the discovery, development and commercialization of small-molecule pharmaceuticals primarily for the treatment of cancer.

Avexa is a Victoria, Australia-based biotechnology company with a focus on discovery, development and commercialization of small molecules for the treatment of infectious diseases.

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