SAN DIEGO, March 24, 2009 (GLOBE NEWSWIRE) -- MediciNova, Inc., a biopharmaceutical company that is publicly traded on the Nasdaq Global Market (Nasdaq:MNOV) and the Hercules Market of the Osaka Securities Exchange (Code Number: 4875), today sent the following letter to the Board of Directors of Avigen, Inc. (Nasdaq:AVGN):
MediciNova, Inc.
4350 La Jolla Village Drive, Suite 950
San Diego, CA 9212
March 24, 2009
Board of Directors
Avigen, Inc.
1301 Harbor Bay Parkway
Alameda, CA 94502
Dear Members of the Board:
We refer to our letter to you last Thursday, March 19. In our letter:
* We asked that you provide us with access to the same level
of due diligence and to Avigen management that you have made
available to any other bidder;
* We told you that, upon receipt of the due diligence
materials that we previously requested following our mutual
agreement on a two-stage due diligence process, we would
commit to complete our due diligence review in a 10-day
period and would submit our final improved proposal at that
time; and
* In advance of receiving these due diligence materials, we
confirmed several key improvements in our offer at our
meeting on March 18 with Avigen management in San Francisco
(namely, minimum cash distributions, no merger agreement
"break fee," and deposit of committed funds in escrow).
Since our March 19 letter, we have not received any direct response
from you, the Board of Directors of Avigen, regarding our commitment
to commence and complete due diligence in a 10-day period and
thereafter deliver our final improved proposal. We would very much
welcome the courtesy of a response which addresses the following three
points:
1. Delivery Date of Avigen Due Diligence: On March 19, we
received an email from Avigen's financial advisor (RBC
Capital) which stated: "We are preparing some financial
diligence. A more formal communication on our thoughts to
follow." We have not heard anything further. When can we
expect to receive the requested due diligence so we can
continue to refine and improve our offer?
2. RBC Financial Opinion: Yesterday, we read for the first time
in your SEC proxy materials that RBC delivered to you an
opinion dated March 17, which stated that our original offer
was "inadequate" from a financial perspective in their view.
For the record, we would like your shareholders to
understand that: (a) we do not understand the basis for the
RBC opinion; and (b) RBC delivered this opinion to you
before you had invited us at the last minute on the evening
of that same day (March 17) to a hastily-arranged meeting in
San Francisco on March 18 to discuss our original proposal
for the first time. We think it is important to note that,
in your SEC proxy materials filed yesterday, you neglect to
mention that we made several key improvements to our offer
on March 18 and proposed to continue improving our offer if
you gave us the requested due diligence that we require to
meaningfully improve our offer (which we subsequently
confirmed in our letter to you on March 19). We believe that
the March 23 public release of an opinion based on our
original proposal, without reference by Avigen management to
the key improvements we made on March 18, could be
misleading to investors if read in isolation of our March 19
press release, which publicly outlined these key
improvements.
Moreover, we understand that RBC is paid on a per-opinion
delivery basis and we cannot comprehend why Avigen
management would authorize such an expenditure before
agreeing to meet with us on March 18 for the purpose of
improving our offer. Would you please direct RBC to withhold
delivery of any further financial "inadequacy" opinion until
we have delivered our final proposal (in the same way as you
have asked RBC to withhold any opinion delivery for the
other current bidders)?
3. Further Improvements in our Offer: As mentioned above, we
propose to complete due diligence and provide our final
improved bid if you will commit to provide us with the
requested due diligence and not enter into a third-party
merger agreement (particularly one with a "break fee")
during this 10-day period. Will you agree to direct
management to give us this 10-day window in order to allow
us to deliver our final improved proposal?
We believe all of these requests are both reasonable and in the best
interests of Avigen's shareholders and, to that end, ask that you not
prematurely and arbitrarily terminate the auction process.
We look forward to your earliest and favorable reply.
Sincerely,
Yuichi Iwaki, M.D., Ph.D.
President and Chief Executive Officer
About MediciNova
MediciNova, Inc. is a publicly-traded biopharmaceutical company focused on acquiring and developing novel, small-molecule therapeutics for the treatment of diseases with unmet need with a specific focus on the U.S. market. Through strategic alliances primarily with Japanese pharmaceutical companies, MediciNova holds rights to a diversified portfolio of clinical and preclinical product candidates, each of which MediciNova believes has a well-characterized and differentiated therapeutic profile, attractive commercial potential and patent assets having claims of commercially adequate scope. MediciNova's pipeline includes six clinical-stage compounds for the treatment of acute exacerbations of asthma, multiple sclerosis, asthma, interstitial cystitis, solid tumor cancers, Generalized Anxiety Disorder, preterm labor and urinary incontinence and two preclinical-stage compounds for the treatment of thrombotic disorders. MediciNova's current strategy is to focus its resources on its two prioritized product candidates, MN-221 for the treatment of acute exacerbations of asthma and MN-166 for the treatment of multiple sclerosis, and either pursue development independently, in the case of MN-221, or establish a strategic collaboration to support further development, in the case of MN-166. MediciNova will seek to monetize its other product candidates at key value inflection points. For more information on MediciNova, Inc., please visit www.medicinova.com.
Statements in this press release that are not historical in nature constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results could differ materially because of risks and uncertainties associated with MediciNova's business and the proposed transaction, the timing to consummate the proposed transaction and any necessary actions to obtain required regulatory approvals, and the diversion of management time on transaction-related issues. For further information regarding risks and uncertainties associated with MediciNova's business, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" sections of MediciNova's SEC filings, including, but not limited to, its annual report on Form 10-K for the year ended December 31, 2007 and its subsequent periodic reports on Forms 10-Q and 8-K, copies of which may be obtained by contacting MediciNova's Investor Relations department at (858) 373-1500 or at MediciNova's website at http://www.medicinova.com. These forward-looking statements involve a number of risks and uncertainties that may cause actual results or events to differ materially from those expressed or implied by such forward-looking statements. Undue reliance should not be placed on these forward-looking statements, which speak only as of the date hereof.
MediciNova disclaims any intent or obligation to revise or update these forward-looking statements.
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. This material is not a substitute for the prospectus/proxy statement MediciNova, Inc. would file with the SEC if an agreement between MediciNova, Inc. and Avigen, Inc. is reached or any other documents which MediciNova, Inc. may file with the SEC and send to Avigen, Inc. shareholders in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF AVIGEN, INC. ARE URGED TO READ ANY SUCH DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.
Investors and security holders will be able to obtain free copies of any documents filed with the SEC by MediciNova, Inc. through the website maintained by the SEC at http://www.sec.gov. Free copies of any such documents can also be obtained by directing a request to Investor Relations Department, MediciNova, Inc., 4350 La Jolla Village Drive, Suite 950, San Diego, CA 92122, USA.
MediciNova, Inc. and its directors and executive officers and other persons may be deemed to be participants in any solicitation of proxies in respect of the proposed transaction. Information regarding MediciNova, Inc.'s directors and executive officers is available in its Annual Report on Form 10-K for the year ended December 31, 2007, which was filed with the SEC on March 17, 2008, and its proxy statement for its 2008 annual meeting of stockholders, which was filed with the SEC on April 29, 2008. Other information regarding the participants in any proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in any proxy statement filed in connection with the proposed transaction.