PROGEN v COUP GROUP: ROUND 2; JANUARY 9, 2009
December 9th 2008 11:49
Friday December 5, 2008
Daily news on ASX-listed biotechnology companies
* ASX, BIOTECHS DOWN: ANTISENSE UP 11%, STARPHARMA DOWN 19%
* PROGEN v COUP GROUP: ROUND 2; JANUARY 9, 2009
* HEARTWARE COMPLETES EURO-ENROLMENT; AWAITING CE MARK
* PHYLOGICA ACQUIRES DYNAMIC MICROBIALS; LOSES DIRECTOR
* BIODIEM FLU VACCINE ‘MAY CONTROL PANDEMICS’
* CAPITAL GROUP CLIENT TAKES 10% OF COCHLEAR
* SOLAGRAN DIRECTOR CHARLES PELLEGRINO RESIGNS
* GOODBYE AVANTOGEN; G’DAY ACUVAX
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PROGEN
Progen shareholders will vote to keep or replace the board at an extraordinary general meeting on January 9, 2009.
Progen has brought forward the last date for announcing whether it has a suitable acquisition and/or merger plan or would return all of its $70 million in cash to shareholders to January 8, instead of the previously announced 45 day limit of January 14, 2009 (see Biotech Daily; November 24, December 1, 2008).
Progen chief executive officer Justus Homburg told Biotech Daily that shareholders would be told of any acquisition or merger plan prior to the meeting requisitioned by the “coup group” which has proposed a new board led by Antisense chairman Bob Moses and former EG Capital analyst Alison Coutts, now with Martin Place Equities.
Mr Homburg said shareholders would then have a choice of supporting the existing board’s decision of a proposed acquisition or merger; or receiving about $1.10 per share; or electing the coup group’s proposed directors to implement their alternative plan.
The coup group’s plan includes licencing Progen’s PI-88 to a small pharmaceutical company, identified in today’s announcement to the ASX by Progen as a privately-owned Taiwanese company.
The plan also identifies Progen’s 500 series compounds as of interest to other parties and Mr Moses told Biotech Daily on December 1 that the group would integrate several public and private cancer therapeutics companies to create a single company focused on advanced polysaccharides for treating cancers.
Progen said the coup group describes itself as the Progen Shareholders Group.
In a point-by-point response to the coup group proposal, Progen said that the Progen Shareholders Group disclosed that an unsecured loan of $US3 million ($A4.6 million) to conduct a phase III trial, would be made to the unnamed Taiwanese pharmaceutical company “only repayable from royalties derived form the commercial sale of PI-88”.
Progen said there appeared to be no interest charged on the loan.
Progen said that agreement was “likely” to trigger a $2 million payment to Medigen which previously worked with Progen on PI-88.
Medigen chief executive officer Dr Stanley Chang removed himself from the proposed list of replacement directors following Biotech Daily’s disclosure of a potential conflict of interest over the $2 million payment to Medigen.
Progen said the Progen Shareholders Group also proposed that Progen be granted options to buy shares in the Taiwanese company.
“We have seen opportunistic deal terms such as these before and when we model the expected cash-flows to Progen we find that there is no financial return and consequently we conclude that such deals are often not in the best interests of shareholders. Of great concern is the apparent lack of security over the loan,” Progen said.
Progen also said that the coup group did not appear to intend to retain Mr Homburg as chief executive officer and he may be entitled to a termination payment of $147,000.
The resolutions to the meeting call for the removal of chairman Dr Mal Eutick and directors Robert Williamson, Stephen Jun Chi Chang, Patrick Owen Burns and chief executive officer Justus Homburg.
The coup group has called for the appointment of Mr Moses, Ms Coutts and Dr Woei-Jia Jiang as directors.
The extraordinary general meeting will be held at the Terrace Room, Indooroopilly Golf Club, Meiers Road, Indooroopilly, Queensland on January 9, 2009 at 10am.
Progen fell 1.5 cents or 1.76 percent to 83.5 cents.
To read all these articles in full, subscribe to Biotech Daily at the link above or at www.biotechdaily.com.au
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