‘UNPRECEDENTED’ METABOLIC AGM SCUPPERS POLYNOVO MERGER
November 30th 2008 21:56
Thursday November 27, 2008
Daily news on ASX-listed biotechnology companies
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* ‘UNPRECEDENTED’ METABOLIC AGM SCUPPERS POLYNOVO MERGER
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METABOLIC, XCEED, POLYNOVO
Metabolic’s annual general meeting was described as “a debacle” by one investor dismayed that the merger with Polynovo had been voted down.
No one from Metabolic was available for comment.
Xceed executive director Dr Stewart Washer told Biotech Daily that the deal failed “due to unexpected circumstances”.
“It appeared to be a play by a major shareholder or two,” Dr Washer said.
“The board said [Polynovo] was a great asset and urged shareholders to vote in favor,” Dr Washer said. “It glowed in all the due diligence.”
“What we’ve got is still a valuable asset and we’ll take Polynovo forward, somehow.”
Dr Washer flew to Perth for tomorrow’s Xceed Capital annual general meeting. Xceed is the majority owner of Polynovo.
While proxy votes ran strongly in favor of the merger with many discretionary votes described as open, a poll of votes showed a clear majority against the merger.
The poll showed 63,974,694 votes against the issue of shares to Xceed capital compared to 51,066,822 votes in favor with 9,968,064 votes abstaining.
The issue of shares to Commonwealth Scientific and Industrial Research Organisation divided on similar lines.
The change of name and selective buy-back were defeated by margins of eight million and nine million votes with more than five million votes abstaining.
All other resolutions were passed. Some met significant opposition, while the reelection of two directors and the employee option plan were passed overwhelmingly.
The remuneration report was passed with 62.3 million proxy votes in favor and 43.8 million proxy votes against; an increase in directors remuneration was rejected by 55.5 million proxy votes to 6.04 million votes; directors Rob Stewart and Iain Kirkwood were elected with more than 68 million votes in favor but with more than 34 million votes against.
Directors Paul Lappin and Franklyn Brazil were elected overwhelmingly with more than 103 million and 99 million votes in favor, respectively.
In a substantial shareholder statement in May this year, Brazil Farming said it held 45,492,701 shares or 15.12 percent of Metabolic (see Biotech Daily; May 14, 2008).
Brazil Farming said it had bought the 36,012,701 shares (12%) originally acquired from Circadian by Iain Kirkwood and Edward St Consulting (see Biotech Daily; May 13, 2008).
Lyn Brazil told Biotech Daily that he and his wife, Bobbie, were Queensland-based investors who already owned about three percent of Metabolic.
Mr Brazil said he had “a few ideas” about where he would like Metabolic to go, but nothing solid enough to discuss.
“The cash is there and we can get involved in other things that are short of cash,” Mr Brazil said at that time. Metabolic had about $17 million in cash at that time.
A range of proposals were considered following the closing of two of Metabolic’s drug programs and chief executive officer Dr Roland Scollay resigned from the company.
The merger of Polynovo and Metabolic appeared to be proceeding as planned (see Biotech Daily; July 18, 2008).
The investor at the meeting told Biotech Daily that it appeared that the board had divided on the merger and had not sorted out differences before the meeting. He described the conduct of the meeting and the failure of the merger as “unprecedented” in the biotechnology sector.
Earlier today, Xceed Capital requested a trading halt pending an announcement “on the results of the Metabolic Pharmaceuticals … annual general meeting“.
Trading will resume on December 1, 2008 or on an earlier announcement.
Xceed last traded at 5.5 cents.
Metabolic was untraded at 2.7 cents.
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