After months of wrangling, MediciNova is close to completing a deal to acquire Avigen. The two companies have reached an "understanding" that values Alameda, CA-based Avigen at its liquidation price plus $3 million. And shareholders would have the choice between getting cash or a security that could be converted into MediciNova stock at $4 or more per share.
Avigen has been struggling to survive since a failed clinical trial last fall sent its share price into the tank. Biotechnology Value Fund of San Francisco bought a big chunk of the devalued company and then clamored for the developer to hand over its $50 million in cash reserves to shareholders. Avigen's executives, though, resisted both BVF and a takeover offer from MediciNova, laying off the bulk of its staff, selling an early-stage program and stepping up efforts to get a partner for AV411, a mid-stage therapy for pain and addiction. Eventually, though, BVF wrested control of the company, laying the groundwork for a deal to go through with MediciNova.
"We believe that combining our ibudilast programs, AV411 and MN-166, would enhance the global development potential for the compound in a range of neurological indications, including multiple sclerosis, neuropathic pain and drug addiction," said Andrew Sauter, Avigen's CEO and CFO.
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- read the story from the San Francisco Business Times