UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrantþ Filed by a Party other than the Registrant¨
Check the appropriate box:
¨ | Preliminary Proxy Statement |
¨ | Confidential, for Use of the Commission only (as permitted by Rule 14a-6(e)(2)) |
¨ | Definitive Proxy Statement |
¨ | Definitive Additional Materials |
þ | Soliciting Material under Rule 14a-12 |
MAXYGEN, INC.
(Name of the Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
þ | No Fee Required. |
¨ | Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. |
1. | Title of each class of securities to which transaction applies: |
2. | Aggregate number of securities to which transaction applies: |
3. | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): |
4. | Proposed maximum aggregate value of transaction: |
5. | Total fee paid: |
¨ | Fee paid previously with preliminary materials: |
¨ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
1. | Amount Previously Paid: |
2. | Form, Schedule or Registration Statement No.: |
3. | Filing Party: |
4. | Date Filed: |
Filed by Maxygen, Inc.
Pursuant to Rule 14a-12 under the Securities Exchange Act of 1934
Subject Company: Maxygen, Inc.
Commission File: 000-28401
![]() HIGHLY CONFIDENTIAL Employee Meeting Nasdaq: MAXY |
![]() 2 Confidential Update on Strategic Transaction Process Confidential Disclosure of Exciting Transaction Anticipated to be signed very soon Highly Confidential – Any premature disclosure could jeopardize the transaction Material non-public information will be disclosed which will prohibit trading of Maxygen stock and “tipping” in accordance with insider trader policy Provide information on future employment plans You will also receive a letter with the information presented today The letter will also provide specifics for your own personal situation We need to confirm acceptance of continued/new employment We will be available to answer questions and ensure you fully understand your future employment opportunity |
![]() 3 Confidential New Company to be Formed by Maxygen and Astellas New Venture (referred to as “MPC”) to be formed by Maxygen and Astellas MPC’s mandate will be to Develop and commercialize Maxy-4 compounds Via existing Astellas collaboration (through which Astellas recognizes the quality of our science and collaborative spirit) Discover and develop new protein therapeutics in immunosuppression for Autoimmune disease Transplant rejection MPC is being formed with the following people and assets: All Maxygen Human Therapeutics scientific staff All protein therapeutic programs, excluding Maxy-G34, including current Discovery programs and new project ideas Access to shuffling for protein therapeutic applications Assignment of Maxygen’s Maxy-4 agreement with Astellas G&A staff sufficient to operate on a going forward basis |
![]() 4 Confidential MPC Formation and Fully-Diluted Ownership Maxygen and Astellas to contribute $10 MM each of cash in exchange for preferred equity Maxygen to receive $40 MM preferred equity in exchange for contributed assets (Maxy-4, Discovery programs and capability, shuffling license, etc.) 20% of MPC’s fully-diluted equity to be allocated to an employee equity pool Fully-Diluted Ownership percentage to be: 13.3% Astellas (16.7% non-fully diluted) 66.7% Maxygen (83.3% non-fully diluted) 20.0% MPC Employee Equity Plan MPC to be managed by a board of managers 4 appointed by Maxygen’s Board MPC’s CEO and 3 others TBD 1 appointed by Astellas |
![]() 5 Confidential New MPC Relationship with Astellas Astellas to fund 100% of the costs associated with protein therapeutics discovery programs in MPC for three year period Excluding Maxy-4, which is funded by MPC and Astellas per existing agreement Based upon jointly approved plan and budget Subject to anticipated limitations (floors and caps) MPC restricted from licensing discovery programs during such three-year period Astellas Buy-Out Option to acquire Maxygen’s interest in MPC for 3 years The exercise price increases quarterly from $53 to $123 million Also provides for additional cash-out by Astellas of employee equity Value of cash-out based on appreciation in value of MPC (shared w/ preferred equity) Astellas Product Option to exclusively license one of MPC’s new product programs (selected by Astellas) at the end of 3 years, if it does not exercise its Buy-Out Option Terms to be agreed in good faith or automatically results in a one-time, up-front payment of $20 million if MPC has less than $20 million in net cash MPC to receive opt-out funding via a loan if Buy-out Option and Product Options both expire unexercised and certain conditions exist |
![]() 6 Confidential MPC Organizational Structure Finalization of organizational structure pending deal completion Plan is to keep R&D structure intact and unchanged with some limited organizational changes to facilitate the achievement of MPC goals Continued relationship between Maxygen and MPC Maxygen 80+% ownership (non-diluted basis) Sharing of building/facilities Sharing of G&A staff |
![]() 7 Confidential MPC R&D Organizational Chart R&D Organization Structure G&A Staff NOT SHOWN Dana F Executive Asst Project Management Staff (1) Project Team Leaders Stephanie L Sr Dir Project Management Molecular Biology Staff (5) Steve P Dir Molecular Biology Erik K Sr Dir Discovery/MolBio Bio/Pharma/Tox Staff (11) Maggie N Assoc Dir Bio/Pharma/Tox Bruce D VP Bio/Pharma/Tox USP Staff (5) Sridhar R Proc Dev Dir Upstream DSP Staff (5) Claus K Proc Dev Assoc Dir Downstream Process Analytical Staff (6) Brent L Dir Protein Analytic/Pharma Sridhar V Protein Science Proc Dev/MFG Grant Y CEO |
![]() 8 Confidential MPC Product and Portfolio Management Team Product Portfolio Management G&A Staff NOT SHOWN Dana F Executive Asst Project Management Staff (1) Project Team Leaders Stephanie L Sr Dir Project Management Molecular Biology Staff (5) Steve P Dir Molecular Biology Erik K Sr Dir Discovery / MolBio Bio/Pharma/Tox Staff (11) Maggie N Assoc Dir Bio/Pharma/Tox Bruce D VP Bio/Pharma/Tox USP Staff (5) Sridhar R Proc Dev Dir Upstream DSP Staff (5) Claus K Proc Dev Assoc Dir Downstream Process Analytical Staff (6) Brent L Dir Protein Analytic/Pharma Sridhar V VP Proc Dev/MFG Grant Y CEO |
![]() 9 Confidential G&A Organizational Structure: MPC and Maxygen will share G&A staff IT will be managed by MPC with dual reporting to Maxygen IT related work for Maxygen via cross-service agreement Facilities will be managed by MPC with dual reporting to Maxygen Facilities related work for Maxygen via cross-service agreement HR will be managed by either MPC or Maxygen with dual reporting to the other party HR related work for the non-employing party via cross-service agreement IP to remain within Maxygen with dual reporting to MPC Shuffling patents will remain owned and prosecuted by Maxygen license to MPC for protein therapeutics IP related work for MPC via cross-service agreement Finance to remain within Maxygen with dual reporting to MPC Maxygen remains public company with associated reporting obligations Accounting/finance/purchasing work for MPC via cross-service agreement Legal to remain within Maxygen with dual reporting to MPC Maxygen remains public company with SEC reporting and other legal obligations Support for contracts for MPC via cross-service agreement |
![]() 10 Confidential Anticipated Timeline We expect signature of the agreement soon Closure of the transaction will be subject to stockholder approval, which we anticipate being completed in 4Q 2009 depending upon interactions with the SEC on the proxy |
![]() 11 Confidential Great Opportunity for Maxygen Stockholders Decreases burn rate Positions our assets for best potential value |
![]() 12 Confidential Maxygen will Retain Various Assets Ownership of Shuffling IP and rights to technology in other fields G&A operations to maintain its status as publicly-traded company 83% ownership of MPC ~22% ownership of Codexis Maxy-G34 Cangene ARS license Maxy-G34 for CIN and other indications $30 MM milestone payment under the Bayer Agreement Vaccines asset and operations Significant cash position |
![]() Maxygen and MPC Employment Plans |
![]() 14 Confidential Employment Plans You are all in this meeting as you are all either Continuing in your role at Maxygen Being offered a new comparable position at MPC You will be notified by your Department Manager of the specific terms and conditions of your employment after the completion of this meeting The plans being specified are contingent upon closing of the transaction and also some of the items still may require approval of the Maxygen Board |
![]() 15 Confidential Maxygen Retained Employees and Employees Transferring to MPC will Receive: Written confirmation of continued employment with Maxygen or offer for new employment in a “comparable position” with MPC Payment of 2009 Bonus within 90 days of closing of the transaction (but no later than Jan 15, 2010) so long as you are employed at time of payment Accelerated vesting of granted RSUs within 90 days of closing so long as you remain employed New equity grants Maxygen equity plan to be determined by year-end 2009 MPC will provide equity grants |
![]() 16 Confidential Benefit Plans for Maxygen and MPC Employees MPC and Maxygen will share the same benefit plans which are anticipated to be similar to or identical to Maxygen’s current benefits plans The following changes are under consideration/likely to be implemented: Elimination of the Maxygen stock match to the 401(k) plan the 401(k) plan will still be available to employees MPC employees will not be eligible to participate in Maxygen’s ESPP no decision has been made whether or not such program will continue or not Elimination of health club reimbursement and commuter reimbursement Vacation/FTO will be carried over from Maxygen to MPC so MPC employees will have their accrued vacation time available for use at MPC Credit for service time spent at Maxygen will be provided to MPC employees The benefit plans may be added to, changed or eliminated at any time |
![]() 17 Confidential MPC Equity Plan MPC will be a Limited Liability Company (LLC) instead of a corporation as this provides benefits for the parties to the transaction As such, MPC’s equity plan may provide for award either as unit options or some other type of award e.g., unit options are a type of equity award permitted for LLCs (and similar entities) and not corporations so they are less familiar than stock options Unit options that may be granted by MPC would generally represent shares in the future appreciation of the value of MPC. As with a stock option, a unit option would increase in value to the holder to the extent MPC increases in value A unit option would entitle the holder to receive proportionate share of MPC profits distributed in a sale, IPO or other “liquidity event” involving MPC. Unlike a stock option, no exercise or purchase price is required for a unit option Typically, an employee is not taxed when a unit option is granted or vests An important advantage of unit options is that profits realized are taxed as capital gains. The capital gains are either short-term or long-term, depending on how long the unit option has been held |
![]() 18 Confidential Why I am Excited about this Opportunity to Join MPC Start of a new chapter with an outstanding team of scientists and professionals I know and believe in Proven technology tools we know are capable for protein therapeutic discovery Existing discovery programs with reasonable and potentially test-able hypotheses An exciting Maxy-4 program we created via DNA shuffling Two shots on goal with two significant commercial opportunities Know the program and data intimately Adequate cash runway in challenging fund-raising environment Committed partner with complementary infrastructure that can be leveraged We know we can work effectively with them Attractive equity participation in successful buy-out outcome, if such occurs Strong belief that I can help contribute to a successful outcome |
![]() 19 Confidential What I Will Commit to MPC and Maxygen Staff I will seek to make decisions based upon what I feel is in the best interest of MPC and expect MPC staff will do the same It is useful and productive to debate when we disagree as to what is in MPC’s best interest I will be open regarding the challenges and activities facing the company so we are working together on the same goals I hope we can build upon the productive, team-oriented environment that has produced outstanding science I am fully committed to make MPC a successful entity |
![]() 20 Confidential Employment Letter Your employment letter will be provided to you by your department manager soon Signed employment letter needs to be returned to Jim Shunk |
![]() 21 Confidential Your Department Manager will be meeting with you today or as soon as practical |
![]() 22 Confidential Don’t Disclose any of this Highly Confidential Information The information we have shared is Highly Confidential Any premature disclosure could jeopardize this transaction We have also disclosed material non-public information and no one should disclose this information outside the company or trade Maxygen stock until the proxy statement is filed and the Compliance Committee has cleared any such trading |
![]() 23 Confidential Additional Information and Where You Can Find It In connection with the transaction discussed herein, Maxygen will file a proxy statement with the SEC. The proxy statement will be furnished to the stockholders of Maxygen. Investors and security holders of Maxygen are urged to read the proxy statement when it becomes available because it will contain important information about Maxygen and the proposed transaction. The proxy statement (when it becomes available), and any other documents filed by Maxygen with the SEC, may be obtained free of charge at the SEC’s web site at www.sec.gov. In addition, investors and security holders may obtain free copies of the documents filed with the SEC by Maxygen by contacting Maxygen at info@maxygen.com or via telephone at (650) 298- 5300. Investors and security holders are urged to read the proxy statement and the other relevant materials when they become available before making any voting or investment decision with respect to the proposed transaction. Maxygen and its respective directors and executive officers may be deemed to be participants in the solicitation of proxies from its stockholders in favor of the proposed transaction. Information about the directors and executive officers of Maxygen and their respective interests in the proposed transaction will be available in the proxy statement. |
![]() 24 Confidential Cautionary Statement Regarding Forward-Looking Statements This document contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The forward-looking statements contained in this document include statements about the proposed transaction, the timing of the transaction and the potential benefits of the transaction and the strategic restructuring. These statements are not guarantees of future performance, involve certain risks, uncertainties and assumptions that are difficult to predict, and are based upon assumptions as to future events that may not prove accurate. Therefore, actual outcomes and results may differ materially from what is expressed herein. For example, if Maxygen does not receive required stockholder approval or fails to satisfy other conditions to closing, the joint venture will not be formed. Further, there is no assurance that the joint venture will be successful or that Astellas will exercise its buy-out option even if the joint venture is successful. In any forward-looking statement in which Maxygen expresses an expectation or belief as to future results, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement or expectation or belief will result or be achieved or accomplished. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: failure of the Maxygen stockholders to approve the formation of the joint venture and the other transactions, the failure of any other closing condition to be satisfied, unexpected delays in the formation of the joint venture, risks inherent in drug development, such as potential difficulties or delays in the development, testing, regulatory approvals, progression or production of drug compounds, the failure to develop products suitable for commercialization, the delay or suspension of predicted development and commercial timelines for any potential products, the failure to protect intellectual property portfolio and rights; the failure to identify and develop new potential products, and the risk that any compounds developed may have adverse side effects or inadequate therapeutic efficacy, and other economic, business, competitive, and/or regulatory factors affecting Maxygen’s business and the market it serves generally, including those set forth in Maxygen’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, especially in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections, and its Current Reports on Form 8-K and other SEC filings. Maxygen is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events, or otherwise. |
![]() HIGHLY CONFIDENTIAL Thanks! Nasdaq: MAXY |
Additional Information and Where You Can Find It
In connection with the transaction discussed herein, Maxygen will file a proxy statement with the SEC. The proxy statement will be furnished to the stockholders of Maxygen. Investors and security holders of Maxygen are urged to read the proxy statement when it becomes available because it will contain important information about Maxygen and the proposed transaction. The proxy statement (when it becomes available), and any other documents filed by Maxygen with the SEC, may be obtained free of charge at the SEC’s web site at www.sec.gov. In addition, investors and security holders may obtain free copies of the documents filed with the SEC by Maxygen by contacting Maxygen atinfo@maxygen.com or via telephone at (650) 298-5300. Investors and security holders are urged to read the proxy statement and the other relevant materials when they become available before making any voting or investment decision with respect to the proposed transaction.
Maxygen and its respective directors and executive officers may be deemed to be participants in the solicitation of proxies from its stockholders in favor of the proposed transaction. Information about the directors and executive officers of Maxygen and their respective interests in the proposed transaction will be available in the proxy statement.
Cautionary Statement Regarding Forward-Looking Statements
This document contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on the current expectations and beliefs of Maxygen’s management and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The forward-looking statements contained in this document include statements about the proposed transaction, the timing of the transaction and the potential benefits of the transaction and the strategic restructuring. These statements are not guarantees of future performance, involve certain risks, uncertainties and assumptions that are difficult to predict, and are based upon assumptions as to future events that may not prove accurate. Therefore, actual outcomes and results may differ materially from what is expressed herein. For example, if Maxygen does not receive required stockholder approval or fails to satisfy other conditions to closing, the joint venture will not be formed. Further, there is no assurance that the joint venture will be successful or that Astellas will exercise its buy-out option even if the joint venture is successful. In any forward-looking statement in which Maxygen expresses an expectation or belief as to future results, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement or expectation or belief will result or be achieved or accomplished. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: failure of the Maxygen stockholders to approve the formation of the joint venture and the other transactions, the failure of any other closing condition to be satisfied, unexpected delays in the formation of the joint venture, risks inherent in drug development, such as potential difficulties or delays in the development, testing, regulatory approvals, progression or production of drug compounds, the failure to develop products suitable for commercialization, the delay or suspension of predicted development and commercial timelines for any potential products, the failure to protect intellectual property portfolio and rights; the failure to identify and develop new potential products, and the risk that any compounds developed may have adverse side effects or inadequate therapeutic efficacy, and other economic, business, competitive, and/or regulatory factors affecting Maxygen’s business and the market it serves generally, including
those set forth in Maxygen’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, especially in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections, and its Current Reports on Form 8-K and other SEC filings. Maxygen is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events, or otherwise.