Exhibit 99.1
Filed by VaxGen, Inc. pursuant to Rule 425 under
the Securities Act of 1933 and deemed filed pursuant
to Rule 14a-12 under the Securities Exchange Act of
1934
Contacts:
Investors: Media:
Lance Ignon Ellen Rose
Sitrick And Company Availe Communication
415-793-8851 650-387-8746
VaxGen and Raven biotechnologies Announce Signing
of Definitive Merger Agreement
- Conference Call Scheduled for Tuesday, November 13, 8:00 EST -
South San Francisco, Calif. -- November 12, 2007 -- VaxGen Inc. (Pink Sheets:
VXGN.PK), a biopharmaceutical company, and Raven biotechnologies, inc., a
privately held company focused on the development of monoclonal antibody
therapeutics (MAbs) for treating cancer, announced today that their respective
boards of directors have unanimously approved a definitive merger agreement. The
merger is expected to create a drug development company with a robust pipeline
of monoclonal antibody candidates in oncology, proprietary antibody discovery
platforms, biopharmaceutical manufacturing capabilities and sufficient cash to
fund operations at least through the end of 2009.
Details of the Proposed Transaction
Under the terms of the agreement, VaxGen shall issue, and the holders of Raven
Series D preferred stock shall receive, in a tax-free transaction, approximately
32 million shares of VaxGen common stock. Following the closing of the
transaction, VaxGen stockholders will own approximately 51 percent of the
combined company, on a pro forma basis, and Raven Series D preferred
stockholders will own approximately 49 percent. This ratio is subject to
adjustment under certain circumstances described more fully in the merger
agreement, but in no event will VaxGen stockholders own less than 50.1 percent
of the
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combined company on a pro forma basis. In addition, VaxGen will assume Raven's
debt and equipment lease obligations of approximately $1.8 million as of
December 1, 2007. Raven Series D preferred stock warrants will be converted into
approximately 332,000 VaxGen common stock warrants. All other Raven options and
warrants will be cancelled.
Completion of the transaction is conditioned upon the approval of the
stockholders of both companies, as well as other customary closing conditions.
Major Raven stockholders already have executed voting agreements in favor of the
transaction. Further conditions to close include a requirement that VaxGen
relist its common stock on a national stock exchange, preparations for which are
underway. VaxGen expects to file a Form S-4 and related proxy
statement/prospectus with the U.S. Securities and Exchange Commission in the
coming weeks. The merger is expected to close in the first half of 2008.
Between signing and closing, Raven will receive a bridge loan of $3.8 million
from the holders of Raven Series D preferred stock to fund operating and
transaction-related expenses. VaxGen will provide a bridge loan of up to $6
million to fund ongoing operations and to support advancement of Raven's
pipeline prior to the transaction's closing. All principal and accrued interest
due under the VaxGen loan is repayable in full in the event the transaction does
not close. All principal and accrued interest due under the loan from the
holders of Raven Series D preferred stock will automatically convert into shares
of Series D preferred stock immediately prior to the closing of the transaction.
This conversion is reflected in the current exchange ratio agreed to between the
two companies.
Rationale and Pipeline
"We believe that the proposed merger of Raven and VaxGen will create a new
company that can deliver value through its promising pipeline and technology
platforms in one of the most scientifically and commercially promising areas of
drug development," said George F. Schreiner, M.D., Ph.D., chief executive
officer of Raven biotechnologies.
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"We expect that the transaction will allow the new company to accomplish three
objectives: first, to initiate Phase 2 clinical trails for RAV12, our lead
oncology product; second, to move our lead antibodies targeting cancer stem
cells into the clinic; and third, to advance our discovery platforms in cancer
stem cell biology. We further expect that the new company will be well
positioned to pursue collaborations with pharmaceutical companies and other
strategic alliances."
James P. Panek, VaxGen's president and chief executive officer, said: "During
the past 10 months, VaxGen evaluated a wide range of strategic alternatives and
determined that Raven's strong pipeline, technology and complementary
capabilities distinguished it from the alternatives. We are confident that this
proposed transaction with Raven will achieve our goal to build value for our
stockholders through the creation of a broadly based biotechnology company with
a promising future."
The combined company's product pipeline will have one compound for major cancer
indications in clinical development, four oncology product candidates in
preclinical development, and a substantial library of antibodies to novel cancer
antigens. This library includes antibodies to tumor stem cells and conditioned
cell immunogens, which are undergoing pre-clinical screening. The new company
would expect to file at least one additional IND in 2009.
Organization, Management and Board of Directors
Both companies separately expect to undertake restructuring efforts in the
fourth quarter to conserve cash resources. The combined company will be based in
Raven's offices in South San Francisco.
Upon closing, Dr. Schreiner will serve as CEO and a director of the combined
company. Mr. Panek will assume the title of president and chief operating
officer and will serve as a director. Other executive officers of the combined
company will be Matthew J. Pfeffer, chief financial officer; Jennie P. Mather,
Ph.D., chief scientific officer; Stanford J. Stewart, M.D., vice president,
clinical research; Gordon A. Vehar, Ph.D., vice president,
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research and development; and Piers Whitehead, vice president, corporate and
business development.
At the closing, the combined company's board of directors will include four
members from VaxGen's current board of directors and three from Raven's. VaxGen
directors who will serve on the new board are Randall L-W. Caudill, D.Phil., who
will continue as chairman of the board; Franklin M. Berger, CFA; Myron M.
Levine, M.D.; and Mr. Panek. The Raven directors who will serve on the board are
William D. Young, Dr. Schreiner, and Michael Kranda, who will serve as
vice-chairman.
VaxGen was advised by Lazard and Cooley Godward Kronish LLP. Raven was advised
by Montgomery & Co., LLC and Latham & Watkins LLP.
Conference Call
A joint conference call will be held at 8:00 a.m. EST on Tuesday, November 13,
2007 to discuss the proposed merger and the business and strategy of the
combined company. The call may be accessed through the following means.
Domestic callers: 800-366-7640.
Domestic replay: 800-405-2236 or 303-590-3000; pass-code 11102242#
International callers: 303-262-2051
International replay: 303-590-3000; pass-code 11102242#
About VaxGen
VaxGen is a biopharmaceutical company based in South San Francisco, California.
The company owns a state-of-the-art biopharmaceutical manufacturing facility
with a 1,000-liter bioreactor that can be used to make cell culture or microbial
biologic products. For more information, please visit the company's web site at
www.vaxgen.com.
About Raven
Raven biotechnologies, inc. is a privately held biotechnology company focused on
the development of monoclonal antibody therapeutics for treating cancer. Raven's
lead product candidate, RAV12, targets adenocarcinomas and is in clinical
development for the treatment of gastrointestinal and other cancers. Raven,
which is based in South San Francisco, California, has identified multiple
candidate therapeutic MAbs for many cancer indications including lung, colon,
pancreatic, prostate, breast, brain, and ovarian
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cancer. Please visit www.ravenbio.com for more information about Raven
biotechnologies inc.
Note: This press release contains "forward-looking statements" within the
meaning of the federal securities laws. These forward-looking statements
include, without limitation, statements regarding each company's ability to meet
the conditions necessary to close this transaction, failure of VaxGen's
shareholders to approve the merger, the ability to complete the transaction
contemplated by this communication in a timely fashion, the risk that VaxGen's
and Raven's business operations will not be integrated successfully; the
combined company's inability to further identify, develop and achieve commercial
success for products and technologies; the combined company's ability to meet
milestones as planned; and the risk that the combined company's financial
resources will be insufficient to meet the combined company's business
objectives. These statements are subject to risks and uncertainties that could
cause actual results and events to differ materially from those anticipated.
Additional information concerning these and other risk factors is contained in
VaxGen Form 10-K for the year ended December 31, 2006 and most recently filed
Form10-Q. Readers are cautioned not to place undue reliance on these
forward-looking statements that speak only as of the date of this release.
VaxGen and Raven undertake no obligation to update publicly any forward-looking
statements to reflect new information, events, or circumstances after the date
of this release except as required by law.
Additional Information and Where to Find It
VaxGen intends to file a registration statement on Form S-4, and a related proxy
statement/prospectus, in connection with the merger. Investors and security
holders are urged to read the registration statement on Form S-4 and the related
proxy/prospectus when they become available because they will contain important
information about the merger transaction. Investors and security holders may
obtain free copies of these documents (when they are available) and other
documents filed with the SEC 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 contacting VaxGen Investor Relations at the email address:
ir@vaxgen.com.
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.
VaxGen, Raven and their respective directors and executive officers may be
deemed to be participants in the solicitation of proxies from the stockholders
of VaxGen in connection with the merger transaction. Information regarding the
special interests of these directors and executive officers in the merger
transaction will be included in the proxy statement/prospectus of described
above. Additional information regarding the directors and executive officers of
VaxGen is also included in VaxGen's preliminary proxy statement
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for its 2007 Annual Meeting of Stockholders which was filed with the SEC on
November 9, 2007 and its Annual Report on Form 10-K for the year ended December
31, 2006, which was filed with the SEC on August 30, 2007. These documents are
available free of charge at the SEC's web site at www.sec.gov and from Investor
Relations at VaxGen as described above.
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