VaxGen, Raven To Merge

VaxGen Inc. and Raven biotechnologies have agreed to merge. The merger is expected to create a drug development company with a “robust 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,” according to a VaxGen statement.

VaxGen shareholders will wind up with 51% of the shares in the new company, while Raven — a privately held firm — will distribute 49% of the shares to its Series D preferred stockholders. VaxGen will also assume Raven’s debt and equipment lease obligations of approximately $1.8 million. The merger is expected to close in the first half of 2008.

“We believe that the proposed merger of Raven and VaxGen will create a new company that can deliver value through its promising pipeline and technology platforms in one of the most scientifically and commercially promising areas of drug development,” said George F. Schreiner, M.D., Ph.D., chief executive officer of Raven biotechnologies. “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.”

James P. Panek, VaxGen’s president and chief executive officer, added, “During the past 10 months, VaxGen evaluated a wide range of strategic alternatives and determined that Raven’s strong pipeline, technology and complementary capabilities distinguished it from the alternatives. We are confident that this proposed transaction with Raven will achieve our goal to build value for our stockholders through the creation of a broadly based biotechnology company with a promising future.”

Upon closing, Dr. Schreiner will serve as CEO and a director of the combined company. Mr. Panek will assume the title of president and chief operating officer and will serve as a director. The company’s board of directors will include four members from VaxGen’s current board of directors and three from Raven’s. The combined company will be based in Raven’s offices in South San Francisco, CA.