Biotechnology Value Fund, which holds a 30 percent stake in Avigen, will finally get that special shareholders meeting it's been pushing for later this month. The firm is urging fellow stockholders to dump Avigen's board for BVF's nominees. It's asking for the meeting "to protect what remains of Avigen's assets, which it believes are being completely wasted by the Board," BVF said in a statement.
BVF has been clamoring to gain control of Avigen's board for a couple of months now. The firm claims Avigen's board is destroying the company's stock value, "recklessly" wasting money and failed to guarantee a "worst-case" outcome to shareholders. "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," BVF claims in a statement issued today.
Among BVF's other qualms, the firms says Avigen has burned through $250 million of investor capital with little to show for it, hired a CEO based in Utah when the company is based in California, committed to golden parachutes that could value up to $5 million and the company adopted a "poison pill."
Things between Avigen and BVF heated up in December when Avigen didn't act on a $20.9 million buyout offer from MediciNova. BVF claimed Avigen rejected the bid, while Avigen's board insisted that it was included among the other options under consideration. In January, BVF initiated its own tender offer for $20.5 million. Two weeks later, Avigen's board flat out rejected the $1 per share offer as "inadequate and not in the best interests of stockholders."
- check out BVF's statement