Merger would consolidate development of ibudilast for pain, drug addiction, and MS.
Avigen is contemplating an acquisition deal that would see its takeover by MediciNova just months after it seemed liquidation was on the cards if a previous $20.5 million buyout proposal by Biotechnology Value Fund (BVF) failed.
After voraciously resisting BVF’s advances, which began in January, Avigen released a neutral statement on the BVF offer in March. The firm, however, hasn’t said anything since.
Avigen reports it is now considering a merger deal with MediciNova worth $3 million on top of its net cash liquidation value. MediciNova made an initial move to acquire Avigen in December 2008, but the details were not disclosed. Under terms of the proposal just announced, Avigen shareholders would be able to elect to receive the consideration either in cash at closing or in the form of a convertible security for MediciNova stock valid for 18 months, after which any unexercised convertible securities would be paid out in cash.
Avigen president, CEO and CFO, Andrew Sauter, says the company believes the proposed deal would be in the best interests of its shareholders. “We intend to continue to negotiate with the goal of reaching agreement on all of the terms and presenting it to our shareholders for approval in the third quarter of 2009.”
The merger of MedicaNova and Avigen would combine further clinical development of ibudilast (Avigen’s AV-411 and MediciNova’s MN-166) for the potential treatment of neuropathic pain, drug addiction, and multiple sclerosis (MS).
Ibudilast has been approved in Japan and other parts of Asia for about 18 years as a treatment for bronchial asthma and more recently to treat dizziness secondary to cerebral stroke. The drug was originally developed by Kyorin Pharmaceuticals.
MN-166 has completed a two-year Phase II trial in MS patients. AV-411 is currently in a Phase IIa trial funded by the NIDA and is also close to starting Phase II development for the treatment of neuropathic pain.
AV411 is an orally bioavailable small molecule glial attenuator that suppresses proinflammatory cytokines IL-1 beta, TNF alpha, and IL-6. It may also upregulate the anti-inflammatory cytokine IL-10. The compound has additionally been shown to inhibit actions from toll-like receptor 4 (TLR4) stimulation and to antagonize a cytokine linked to systemic and neuroinflammation, Avigen claims.
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