re: anyone went to avx-pgl show?, page-4

re: anyone went to avx-pgl show? No, but it didn't go down too well by the sounds of it in Sydney yesterday:

http://www.theaustralian.news.com.au/business/story/0,28124,24885282-36418,00.html

Avexa shareholders clash with Drona over merger

Rebecca Urban | January 08, 2009
Article from: The Australian

AVEXA chairman Nathan Drona has defended the merits of a proposed $120 million merger with failed cancer drug developer Progen Pharmaceuticals.

He had earlier clashed with disgruntled stakeholders at a roadshow presentation in Sydney yesterday.

Among them was a representative from the self-proclaimed Progen Shareholders Group, which is pushing to oust Progen's board over its decision to shelve the much-vaunted oncology drug PI-88 last year.

The renegade group has claimed it has enough support to replace all but one of Progen's directors when a shareholder meeting is held in Brisbane tomorrow. If successful, the group could potentially disrupt the merger.

Alison Coutts, a former stockbroking analyst who is vying for a board seat at Friday's meeting, told Mr Drona that listening to him speak about the prospects for the merged company, including plans to find an international pharmaceutical company to partner Avexa's late-stage HIV drug candidate, felt like "deja vu".

"It was just a little time ago that we were sitting around hearing how great PI-88 was," Ms Coutts said, after interjecting several times. "You're saying: 'Believe us, we'll do a deal.' Tell us why we should believe you?"

A former director of Progen's long-time corporate adviser, EG Capital, Ms Coutts is familiar with Progen's history. The now-defunct stockbroker helped to raise millions of dollars in capital for the Brisbane-based biotech and once slapped a $20 share price target on research reports promoting the stock.

However, Progen shares crashed to a low of 58c last July when the board announced the drug trial had been terminated.

Mr Drona, who began marketing the merger this week, after unveiling the proposal a few days before Christmas, said prospects for Avexa's anti-HIV product could not readily be compared to Progen's ill-fated experience developing oncology drugs.

Avexa's cornerstone product -- an antiretroviral called apricitabine -- is in the midst of phase III studies. It is one of only two new HIV therapies worldwide in late-stage trials.

"No HIV drug that has ever entered phase III clinical trials has failed," Mr Drona told investors.

"We are in confidential discussions with big pharma. If people choose not to believe what the board and management presents, they can vote by selling the stock."

Mr Drona appeared unconcerned by the Progen Shareholders Group, which is opposed to the merger.

"I'm quite comfortable that this deal will be completed. I'm very confident both (boards) are 100 per cent behind the merger," he said.

But shares in both companies have declined since the deal was announced. Many Progen investors had been banking on a significant capital return, while Avexa shareholders have expressed concerns about dilution.

The Avexa board has been under pressure over the share price, which is down 87 per cent compared with a year ago.

Investors are also concerned that the company has not yet signed a licensing deal.

Shareholders of both companies will have a chance to vote on the merger at meetings scheduled for February and March.

The deal involves Avexa shareholders receiving one Progen share for every 12.857 shares they already own. Additionally, Progen will return $20 million to its own investors through a share buy-back.