(Source: PRNewswire)
NEW YORK, March 12 /PRNewswire/ -- Biotechnology Value Fund, L.P. ("BVF"), today announced that it has sent a letter to the stockholders of Avigen, Inc. urging stockholders to remove the current members of the Avigen Board and replace them with BVF's four new, stockholder-oriented, independent director nominees at the Special Meeting of stockholders to be held on March 27, 2009. BVF, the beneficial owner of approximately 30% of the Company's outstanding common stock, has called the Special Meeting to give stockholders the opportunity to protect what remains of Avigen's assets, which it believes are in danger of being completely wasted by the Board.
BVF encourages stockholders to join its campaign to maximize stockholder value by voting the GOLD proxy card today.
BIOTECHNOLOGY VALUE FUND, L.P. VOTE THE ENCLOSED GOLD PROXY CARD TO HELP UNLOCK VALUE AT AVIGEN, INC.
ELECT DIRECTORS WHO ARE DEDICATED TO MAXIMIZING VALUE FOR ALL AVIGEN STOCKHOLDERS BY REDUCING CORPORATE WASTE AND PROTECTING STOCKHOLDERS' DOWNSIDE RISK WHILE MAINTAINING SIGNIFICANT UPSIDE POTENTIAL
Dear Fellow Stockholders:
SAN FRANCISCO - March 12, 2009 - We, the Biotechnology Value Fund ("BVF"), are the owners of 8,819,600 shares, or approximately 30% of Avigen's outstanding common stock. Since we took the lead in protecting value for all stockholders of Avigen in October of 2008, the stock price has increased by over 65%. We have successfully caused the Avigen management team and Board to reduce expenses and sell off programs that they do not have the necessary expertise to develop. We now need your participation to secure Avigen's substantial remaining value by removing the members of the current self-serving Board and electing our independent nominees who are committed to protecting value for all stockholders.
Let me state from the outset that we neither seek, nor would we accept, any consideration or benefit solely for ourselves. Avigen has falsely accused us of this numerous times, even though we have been crystal clear on this fundamental issue all along. We are waging this effort because (a) we feel a sense of responsibility to do so on behalf of all stockholders given our unique position as the largest stockholder and (b) we believe it is the right thing to do, especially in the context of the current economic environment caused, in part, by similar self-serving managements and Boards.
Throughout this process we have sought only three simple things: 1. that Avigen stop recklessly wasting stockholder money; 2. that stockholders be empowered to decide the fate of Avigen's remaining cash; and 3. that stockholders be guaranteed a quantified worst-case outcome of approximately Avigen's liquidation value.
Thus far we have made progress with #1 and #2 above. Facing pressure from BVF, Avigen has abandoned, at least temporarily, its plan to spend money on its remaining products. In addition, the Company has now been forced to call a special meeting to finally permit stockholders the opportunity to weigh in. Prior to our intervention, Avigen's stock traded at a mere 33% of the cash in the bank and at a steep discount to its current price. This is a remarkable reflection on how poorly Avigen was and is viewed by the investment community. Prior to our intervention, Avigen's plan was to spend all stockholder money over two years on uncompelling products that it has subsequently conceded were not worthy of investment.
It is worth reflecting on some of Avigen's historical "accomplishments": 1. Avigen has consumed over $250 million of investor capital, with little value to show for it. Why should they be entrusted with the last $50 million? 2. Avigen selected a Chief Executive Officer who lives in Park City, Utah when the Company is based in California. 3. Avigen has committed to pay significant fees in the form of golden parachutes to its senior executives and multiple investment bankers, lawyers and consultants in an amount that, we believe, could exceed $5 million under certain circumstances. 4. Despite purporting to have reduced their use of cash and working to protect stockholders, we believe Avigen will spend nearly $20 million, or over $0.65 per share, between the time they announced the failure of AV650 and when they supposedly hope to complete a merger. 5. Avigen adopted a "poison pill," which we believe is just another example of the Board acting first to protect their jobs rather than the stockholders they have a fiduciary duty to represent. 6. Avigen delayed calling the special meeting for approximately two months before setting a rushed meeting date that we believe was set to prevent stockholders from having adequate opportunity to receive and review proxy materials and vote at the special meeting.
We have grown increasingly dismayed that Avigen's Board and management team, who collectively own little stock, have wasted money on golden parachutes, multiple investment bankers, consultants and lawyers. Had Avigen merely agreed to guarantee a worst case scenario for stockholders, this fight would not have transpired.
