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news.VaxGen and Raven biotechnologies have agreed to merge, creating a drug development company with a pipeline of monoclonal antibody candidates in oncology, proprietary antibody discovery platforms, biopharmaceutical manufacturing capabilities and sufficient cash to fund operations at least through the end of 2009.
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Under the terms of the agreement, VaxGen shall issue, and the holders of Raven Series D preferred stock shall receive, in a tax-free transaction, approximately 32 million shares of VaxGen common stock. Following the closing of the transaction, VaxGen stockholders will own approximately 51% of the combined company, on a pro forma basis, and Raven Series D preferred stockholders will own approximately 49%.
In addition, VaxGen will assume Raven’s debt and equipment lease obligations of approximately $1.8 million as of December 1, 2007. Raven Series D preferred stock warrants will be converted into approximately 332,000 VaxGen common stock warrants.
The combined company’s product pipeline will have one compound for major cancer indications in clinical development, four oncology product candidates in preclinical development and a substantial library of antibodies to novel cancer antigens. The merger is expected to close in the first half of 2008.
George Schreiner, CEO of Raven biotechnologies, said: “We expect that the transaction will allow the new company to accomplish three objectives: first, to initiate Phase II clinical trails for RAV12, our lead oncology product; second, to move our lead antibodies targeting cancer stem cells into the clinic; and third, to advance our discovery platforms in cancer stem cell biology. We further expect that the new company will be well positioned to pursue collaborations with pharmaceutical companies and other strategic alliances.”