battle of the biotechs

Wheels & Deals
10:09 AM, 20 Feb 2009



Michael Feller

Battle of the biotechs

Things must be hotting up at 576 Swan Street, Richmond on Melbourne's CBD fringe. That's the building shared by biotech companies Cytopia and Avexa, which are both bidding for Progen Pharmaceuticals far to the north of Australia in Toowong, Queensland.

Progen, which has just released its half year financial results, has conceded to a meeting requisitioned by Cytopia, which wanted alternative 'options' to the increasingly cosy Progen and Avexa. Cytopia and 14 other Progen shareholders have requisitioned the meeting for March 27 at the Indooroopilly Golf Club, where a new board may be elected. However, much to Cytopia's chagrin, a vote on a full share buyback – the alternative option to a Progen merger with Avexa – will not be allowed.

The March 27 meeting will present resolutions to remove Progen directors Malvin Eutick, Patrick Burns, Stephen Chang, Justus Homburg, John Lee and Robert Williamson – in short the entire board. The requisitioners have called to appoint in their stead new directors Robert Collins, Tom Williams and Damian Pethica, none of whom are on the Cytopia or Progen boards.

Collins was previously managing director of Candle Australia and on the board of the Health Insurance Commission (Medicare). Williams recently retired as chief executive of BioDiem, a flu vaccine developer. Pethica is chairman of BrainZ Instruments and is an authorised representative of Michael Kroger's old money merchant bank JT Campbell & Co.

A Progen shareholder's meeting on March 11 to vote on its proposed merger with Avexa is nevertheless going ahead. The decision not to combine this meeting with that on March 27 is undoubtedly frustrating for Cytopia, but Progen feels this is justified, noting that the 'certain shareholders' behind the requisition hold just 5 per cent of shares on issue.

Progen is receiving advice from PricewaterhouseCoopers and legal counsel from Clayton Utz. Avexa is being advised by Gresham Partners and Mallesons Stephen Jaques, while Hall & Wilcox Lawyers is advising Cytopia.

http://www.businessspectator.com.au/bs.nsf/Article/Progen-$pd20090220-PEULR?OpenDocument