Taiwanese regulatory requirements would dilute liquidity and capital resources.
Pacgen Biopharmaceuticals and Medigen Biotechnology mutually agreed to terminate their letter of intent to combine the two businesses. The firms believe that complying with the Taiwanese regulations would adversely impact the combined company’s finances.
They determined that a share for share exchange transaction, as per the regulatory requirements in Taiwan, would require an issuer to redeem dissenting shareholder interests for cash. This would negatively affect the liquidity and capital resources of the combined entity. They add that the proposed merger would be a significant undertaking given current financial market conditions.
Hence Pacgen and Medigen, who inked a letter of intent in October 2008, have decided not to proceed with the definitive agreement.
Pacgen is focused on therapeutics for infectious and inflammatory diseases with one mid-stage candidate, an antifungal for oral candidiasis, and a preclinical compound designed to treat inflammatory diseases characterized by nonbeneficial neutrophil. Medigen develops biopharmaceuticals and molecular diagnostics for liver diseases and cancers.
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