Maxygen, Inc. (Nasdaq: MAXY), a biopharmaceutical company, today
announced that its Board of Directors has approved the liquidation
and dissolution of the company, subject to shareholder approval,
and plans to distribute all available cash to its shareholders
after making reasonable provision for known and potential
liabilities and other obligations of the company. Maxygen currently
estimates that the aggregate amount of the initial liquidating
distribution to stockholders will be between $68.2 million and
$69.6 million, or between $2.45 to $2.50 per share, based on
27,792,520 shares of common stock outstanding as of
May 31, 2013.
Maxygen also announced today that in connection with the Board’s
approval of the company’s dissolution, Mr. James Sulat will resign
as the Chief Executive Officer and Chief Financial Officer of
Maxygen, and as a member of the Board, on June 30, 2013. Maxygen’s
Board of Directors has appointed Mr. Isaac Stein, the Executive
Chairman of the Board, to act as the company’s Chief Executive
Officer and Chief Financial Officer upon Mr. Sulat’s departure.
Plan of Liquidation and Dissolution
Maxygen’s Board of Directors has approved a plan of liquidation
and dissolution of the company, which is subject to shareholder
approval. Maxygen intends to call a meeting of its shareholders to
seek approval of the dissolution and will file proxy materials with
the Securities and Exchange Commission as soon as practicable.
“Maxygen’s strategic process has already returned substantial
value to the company’s shareholders over the past several years,”
said Mr. Stein, Executive Chairman of Maxygen’s Board of Directors.
“While the company’s Board and management devoted substantial time
and effort in identifying and pursuing additional opportunities to
further enhance shareholder value, the Board has now reached the
conclusion that it is in the best interest of the company and its
shareholders to dissolve the company. Through the estimated
liquidating distributions and the company’s prior distributions and
stock repurchases, Maxygen will have returned approximately $320
million in cash and property to the company’s shareholders since
December 2009. I appreciate the remarkable efforts of our
Board and our employees, as well as the support of our
shareholders, throughout this process.”
The plan of liquidation and dissolution contemplates an orderly
wind down of Maxygen’s business and operations. If Maxygen’s
shareholders approve the dissolution, the company intends to file a
certificate of dissolution with the Delaware Secretary of State,
satisfy or resolve its remaining liabilities and obligations,
including but not limited to contingent liabilities and claims,
lease obligations, severance for terminated employees, and costs
associated with the liquidation and dissolution, and make
distributions to its shareholders of cash available for
distribution, subject to applicable legal requirements. Upon the
filing of the certificate of dissolution, Maxygen also intends to
delist its common stock from the NASDAQ Global Market, close its
stock transfer books, discontinue recording transfers of shares of
its stock, and seek relief from certain of its reporting
obligations under the Securities Exchange Act of 1934, as
amended.
Maxygen currently estimates that it will initially reserve
between $9.0 million and $10.4 million which will be used to pay
all operating expenses, as well as other known, non-contingent
liabilities. This estimate consists of the following components:
(a) $5.5 million to $6.7 million for operating expenses from April
1, 2013 through the dissolution and wind-down process, (b) $1.4
million for severance related obligations, (c) $1.1 million to $1.3
million for the settlement of outstanding contingent performance
unit awards, and (d) $1.0 million related to prior cash
distributions payable to holders of unvested restricted stock
awards. In addition, the Company estimates that it will initially
maintain a reserve for any contingent and unknown liabilities, as
required by Delaware law, of $2.5 million.
As noted above, based on this estimated reserve, Maxygen
currently estimates that the aggregate amount of the initial
liquidating distribution to shareholders will be between $68.2
million and $69.6 million, or between $2.45 and $2.50 per share,
based on 27,792,520 shares of common stock outstanding as of May
31, 2013, provided that the Board may adjust such amount at a later
date to ensure there is cash remaining to satisfy any potential
liabilities. Maxygen expects to make the initial liquidating
distribution in connection with the filing of the certificate of
dissolution, or as promptly thereafter as practicable. The company
currently anticipates that the shareholder meeting to approve the
plan of dissolution and the payment of the initial liquidating
distribution to shareholders will occur in the third quarter of
this year, although either event could be delayed based on various
factors. Additional liquidating distributions, which could total as
much as approximately $0.09 per share, will be made as the required
contingency reserves may be released over time.
The amount distributable to shareholders, however, may vary
substantially from the amount estimated above based on a number of
factors, including the resolution of outstanding known and
contingent liabilities, the possible assertion of claims that are
currently unknown to the company and costs incurred to wind down
the company’s business. The Board of Directors, in consultation
with its advisors, has evaluated the company’s known and potential
contingent liabilities, as well as other matters, in order to make
a determination about reasonable amounts to reserve, which is
reflected in the estimated reserve described above. Delaware law
requires that the company’s Board of Directors make reasonable
provision for contingent and unknown obligations in connection with
a dissolution and liquidation of the company, which requires that a
portion of the company’s assets be reserved until the resolution of
such matters. Further, if additional amounts are ultimately
determined to be necessary to satisfy any of these obligations,
shareholders may receive substantially less than the current
estimates.
If, prior to its dissolution, Maxygen receives an offer for a
transaction that will, in the view of the Board, provide superior
value to shareholders compared to the value of the estimated
distributions under the plan of dissolution, taking into account
all factors that could affect valuation, including timing and
certainty of payment and closing, proposed terms and other factors,
the plan of dissolution could be abandoned in favor of such a
transaction.
Important Additional Information will be filed with the
SEC
This press release is for informational purposes only. It is not
a solicitation of a proxy. In connection with the plan of
dissolution, Maxygen intends to file with the SEC a proxy statement
and other relevant materials. MAXYGEN’S SHAREHOLDERS ARE URGED
TO READ THE PROXY STATEMENT AND THE OTHER RELEVANT MATERIALS WHEN
THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE COMPANY AND THE PLAN OF DISSOLUTION.
Shareholders may obtain a free copy of the proxy statement and the
other relevant materials (when they become available), and any
other documents filed by the company with the SEC, at the SEC’s web
site at http://www.sec.gov. In addition, Maxygen will make
available or mail a copy of the definitive proxy statement to
shareholders of record on the record date when it becomes
available. A free copy of the proxy statement, when it becomes
available, and other documents filed with the SEC by Maxygen may
also be obtained by directing a written request to: Maxygen, Inc.,
Attn: Secretary, 411 Borel Avenue, Suite 616, San Mateo, CA 94402,
or by accessing the “Investor Relations” section of Maxygen’s
website at www.maxygen.com. Shareholders are urged to read the
proxy statement and the other relevant materials when they become
available before making any voting or investment decision with
respect to the plan of dissolution.
About Maxygen
Maxygen is a biotechnology company that has historically focused
on the discovery and development of improved next-generation
protein pharmaceuticals for the treatment of disease and serious
medical conditions. Maxygen continues to retain all rights to its
MAXY-G34 product candidate, a next-generation pegylated,
granulocyte colony stimulating factor, or G-CSF, for the treatment
of chemotherapy-induced neutropenia and acute radiation syndrome.
For more information, please visit our website at
www.maxygen.com.
Cautionary Statement Regarding Maxygen Forward-Looking
Statements
This document contains forward-looking statements within the
meaning of the “safe harbor” provisions of the Private Securities
Litigation Reform Act of 1995. These statements are based on the
current expectations and beliefs of Maxygen’s management and are
subject to a number of factors and uncertainties that could cause
actual results to differ materially from those described in the
forward-looking statements. Such statements involve risks and
uncertainties that may cause results to differ materially from
those set forth in these statements. Such risks and uncertainties
include, but are not limited to, the following: the ability of the
company to obtain shareholder approval of the proposed plan of
liquidation and dissolution, the company’s ability to accurately
estimate the amounts required to pay all operating expenses, as
well as other known, non-contingent liabilities, from April 1, 2013
through the dissolution and wind-down process, the company’s
ability to settle, make reasonable provision for or otherwise
resolve its liabilities and obligations, including the
establishment of an adequate contingency reserve; the precise
nature, amount and timing of any distributions to shareholders; the
possibility that any distributions to shareholders, including the
proposed initial distribution could be diminished and/or delayed
by, among other things, sales of our assets, claim settlements with
creditors, unexpected or greater than expected expenses; the
possibility that distributions to shareholders may take several
years to complete; the possibility that the company’s Board of
Directors could elect to abandon or delay implementation of the
plan of liquidation and dissolution; the possibility that the
company’s shareholders could be liable to company creditors in the
event Maxygen fails to create an adequate contingency reserve to
satisfy claims against the company; the expectation that the
shareholder meeting to approve the dissolution and the payment of
the initial liquidating distribution will occur in the third
quarter of 2013; and other statements contained in this press
release regarding matters that are not historical facts. Additional
risk factors are more fully discussed in Maxygen’s Annual Report on
Form 10-K for the year ended December 31, 2012, including under the
caption “Risk Factors,” and in Maxygen’s other periodic reports
filed with the SEC, all of which are available from Maxygen or from
the SEC’s website (www.sec.gov). Maxygen is under no obligation to
(and expressly disclaims any such obligation to) update or alter
its forward-looking statements whether as a result of new
information, future events, or otherwise, except to the extent
required by applicable law.
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