Progen shareholders are not for the transaction.
Avexa and Progen Pharmaceuticals have agreed to terminate their merger plans. The companies realized that Progen shareholders would not approve the transaction. Consistent with the terms of the MIA, Progen will pay Avexa a break fee of A$500,000.
Avexa made a move to take over Progen in December 2008. The combined company would focus initially on Avexa’s Phase III HIV therapy, ATC, and continue to develop selected compounds for infectious diseases and cancer.
Then at the beginning of this year, Cytopia raised issues with the merger, claiming the combination would not have sufficient money to fund the Phase III trials in HIV. In February, Avexa reaffirmed its interest and reiterated that financing would not be an issue.
While Avexa expected to have $60 million in cash through the merger with Progen, which would support ATC, the company says that it is still confident about its development efforts. The company anticipates initial Phase III results in the 2nd quarter of 2009.