TD1 - TALI Digital

[mitch87]

Re: AVX - Avexa Limited

gee, well the market hasnt liked this proposal im not sure if i do either. it seems the only thing progen have to offer is their cash like you said wilsta.

so if this goes ahead like planned and say the share buy back is fully utilised by progen shareholders, we have a combined entity with about 65-75m shares on issue. (progens current 48m less share buy back of 18m=30m)(plus 450m avx shares /12.857 = 35m)

and considering the combined entity will have cash reserves of about 60m, does this mean we are getting avx phase 111 ATC drug for free?? which seems quite absurd.although it is unclear as to the amount of revenue ATC could potentially generate if any?? some analysts have placed 400m on it. which suggests avx is highly undervalued?? using a 10% discount rate i came up with a price of $4 for the combined entity,which equates to about 55c for AVX if the merger never occured.These obviously long term targets(2012+).

i would like to see if anyone else has come up with their own value of avexa.

 

[Phantom66]

Re: AVX - Avexa Limited

I'm not buying it either, the Progen merger even though it is supported by the board offers very little for AVX holders, they won't be getting any more money from me.

Valuing Progen at $1.35 is optimistic given its recent performance and AVx are worth more than the 7.5 cents they think they are, jusr radining whilst the market is down knowing Avexa needs just a bit more cash to get a world class profitable product across the line.

 

[Go Nuke]

Re: AVX - Avexa Limited

Well i haven't really read the announcement and Ive never heard of Progen before.
But considering I bought in at $1 ive seen little in it for me as an investor....and if I have to cough up any more money...well they are dreaming!

At 8c Ive lost nearly all Ive put in....so i dont really care what happens anymore.

 

[justiceotp]

Re: AVX - Avexa Limited

Well I am holding shares in both AVX and PGL and both took a dive today. You would expect someone would have to benefit out of the merger but the market doesn't appear to think so judging from the drop in share price of both companies today.

 

[yawomanjas]

Re: AVX - Avexa Limited

I think this article summs it up...

Progen to buy Avexa at discount
22/12/2008 7:26:01 PM
Drug maker Progen Pharmaceuticals Ltd's discounted offer to buy Avexa Ltd, which is in the last stages of trialling a potentially lucrative HIV treatment drug, has received a frosty reception from investors.

Shares in Progen fell 15.56 per cent and Avexa stock slumped 24.76 per cent to a record low on Monday after the companies announced the deal, which values Avexa at two third market value as of last Friday.

According to the companies, the friendly merger agreement will allow Avexa to access much needed cash to continue its phase III trial of apricitabine (ATC).

ATC is one of two HIV drugs Avexa is developing that are in the final testing phase before a treatment can be submitted to the US Food and Drug Administration.

Wilson HTM analyst Graham Wald said the merger deal - which has been unanimously recommended by both boards - was in effect a capital raising by Avexa to raise the money needed for the trials.

"We don't like it at all," Dr Wald said.

"The deal entrenches a low valuation and destroys shareholder value.

"We've changed our recommendation today and put out a sell because it's a huge dilution for Avexa shareholders."

Progen stock fell 14 cents to close at 76 cents on Monday and Avexa shares slumped 2.6 cents to 7.9 cents.

Progen is offering Avexa shareholders one Progen share per 12.857 Avexa shares. That values Avexa shares at seven cents, or 33 per cent below Friday's closing price of 10.5 cents.

At Monday's level, it values Avexa at 5.91 cents each, or 25 per cent below its closing price on Monday.

Avexa chief executive Julian Chick, who will also lead the merged company if the deal goes ahead, said selling the company to Progen was a better way of gaining access to cash for the ongoing trials of HIV drug apricitabine (ATC), as accessing debt or equity markets is too costly in the current environment.

"The slight discount to the share price is very attractive relative to what would happen if we needed to raise the capital," Dr Chick said in during a teleconference.

"Without this merger Avexa needs to continue considering its options going forward, which may include looking at a capital raising."

But the deal values Progen at 34 per cent more than its closing price on Monday and Progen will also return $20 million in cash to its shareholders through buyback at $1.10 a share, cutting the amount of money Avexa will actually gain through the deal.

Dr Wald also said the deal didn't provide all the cash Avexa needs to complete a second phase III trial of ATC, nor did it provide a way to get the drug ready for sale.

The companies said in a statement there will be enough money to get the first phase III trial to its week 24 milestone, where they may be able to file an application with the FDA.

"Avexa needed the right kind of capital, and the right kind of capital would have been through a deal with a big pharmaceutical company, whether it be a collaborative deal or for them to be acquired," Dr Wald said.

A big drug company would "be hard pressed to do it now because its not a clean asset. It's got all the Progen stuff in it now."

Progen focuses on small molecule pharmaceuticals for the treatment of cancer.

Wilson HTM's Mr Ward on Monday cut his 12 month target share price for Avexa to 10 cents from 20 cents.

If approved, the merged entity will be 56 per cent owned by Progen shareholders and 44 per cent by Avexa shareholders, assuming the buyback is fully subscribed.

It will be named Avexa Pharmaceuticals Ltd and headquartered in Melbourne, with offices in Brisbane, San Francisco in the US.

Progen chief executive Justus Homburg will join the new board, to be chaired by Nathan Drona, currently an Avexa director.

The deal also includes a commitment by both companies not to solicit alternative deals, or incur a break fee of $500,000.

Progen shareholders are expected to meet in late February to approve the buyback, merger and name change. Avexa shareholders will meet in March.

 

[gilbo]

Re: AVX - Avexa Limited

Listening to the presentation conference call it was clear that the Avexa board believes that this merger is in the best interests of shareholders and has not been just a cash grab.

There is no doubt that this gives Avexa much needed cash (Progen has been courted by a number of firms looking to get their hands on their cash) and this method of raising capital is the most cost-effective way in the current climate. However, Avexa did stress that, in addition to cash, this gave the merged entity product synergies that they believe is greater than the sum of its parts.

In relation to the comments made by Graham Wald from Wilson HTM, this certainly is a capital raising (not denied by Avexa) and any capital raising will result in a dilution to shareholders. In addition, the Avexa chair Nathan Drona refuted his suggestion that this makes it more difficult for a large pharmaceutical firm to eventually acquire Avexa (the merged entity) - in fact he mentioned that they are still in talks with various pharmaceutical companies and that they do not appear to have been put off by this proposal.

Of course, this plan of action does give Avexa time and at the moment time is probably Avexa's friend with respect to on-going negotiations with large pharmaceuticals. 16-week Phase III data due out in 2Q2009 is the next key date for ATC and this is expected to be a share value inflexion point. To be able to demonstrate that Avexa can get there on its own (at least in this merged entity) will no doubt alleviate the need for Avexa to make any rushed agreements for a potentially lower price than may be achieved.

 

[Wilsta]

Re: AVX - Avexa Limited

I'm starting to think this this is all just empire building by Avexa Management at our expense ... since they will be incharge of the new combined entity ...

Even in this economic climate ... this is expensive cash. Why the hell are we doing the conversion on an implied value of $1.35 for Progen shares? Also why the hell are Progen doing a share buyback when capital is "so hard" to come by??? To me it shows that their pipeline drugs are worth nothing since the best thing they can do with the money is give it back!

Vote "NO" to this merger when we get a chance ... if in fact you are still a holder.

 

[Purple XS2]

Re: AVX - Avexa Limited

...

Vote "NO" to this merger when we get a chance ... if in fact you are still a holder...

Well, the interesting feature is the time-lag. Avexa holders get to vote on this in March 2009.

If there's nothing else on the table by then, we really will be beggars not choosers. The merger contract discourages but does not prohibit the emergence of an alternative (a 1/2 million penalty applies).

I allow myself the conclusion that Avexa has signed this deal with a view to giving themselves a bit of wriggle-room. If OTOH, this is the best that the outside world comes up with, so be it. The name of the game is quite simply to survive, and at least this deal keeps the ATC project alive till 2nd half 2009.

As for me, I'm hanging in there till the party's over.
Rgrds, P.

 

[Goldmann]

Re: AVX - Avexa Limited

Well, the interesting feature is the time-lag. Avexa holders get to vote on this in March 2009.

If there's nothing else on the table by then, we really will be beggars not choosers. The merger contract discourages but does not prohibit the emergence of an alternative (a 1/2 million penalty applies).

I allow myself the conclusion that Avexa has signed this deal with a view to giving themselves a bit of wriggle-room. If OTOH, this is the best that the outside world comes up with, so be it. The name of the game is quite simply to survive, and at least this deal keeps the ATC project alive till 2nd half 2009.

As for me, I'm hanging in there till the party's over.
Rgrds, P.

Purple - my thoughts exactly... this is essential AVX management paying for a get out of jail free card in case they cant sort anything better by then... If anyone has had their eye on AVX, and were thinking of buying it - this will provide them the catalyst...

by the time the vote occurs, AVX (at current cash burn rates) will have under 10mil in cash... a straight out capital raising is impossible i think, given that many holders participated in the .55c one not that long ago - they wont come to the party again in this environment...

sadly i thought a takeover at would bring me my out time... but it looks like i will have to ride this one to merger - or to the grave... and saying no means you are risking everything for the prospect of a better offer (when they only have one quarter time wise left before the cash runs out). If you were a top scientist with AVX and you knew they were closing in on D-day - then you would bail.. hence this announcement gives AVX employees and holders - so breathing space with a contingency plan.

my opinion only of course...

merry xmas to all AVX holders - been a tough year!

 

[Wilsta]

Re: AVX - Avexa Limited

I'd prefer Avexa management to outright say it then .. that they need money, that this is for the money. I don't want this sweet talk about synergies, being a significant pharma and the drugs Progen has to offer when its clearly about the money and the money only. If Progen is giving money back to shareholders they clearly dont have any growth opportunities. We are merging with a dead dog that has a gold collar. I take your points onboard .. they are good ones. I still am very cold toward this proposal and something just doesnt feel right.

I'd warm to it much more if the implied Avexa price was on par with where it was at 10.5c. Why did they sell us short???

 

[Phantom66]

Re: AVX - Avexa Limited

Sold out to buy PGL at $.70 and will sell for $1.10 as part of the buyback.
Gains me some more back anyway and will then buy AVX which will still be at .08 if the figures add up.
PGL trading at .78 so made my 10% already

Phantom

 

[Big_Daz]

Re: AVX - Avexa Limited

Sold out to buy PGL at $.70 and will sell for $1.10 as part of the buyback.
Gains me some more back anyway and will then buy AVX which will still be at .08 if the figures add up.
PGL trading at .78 so made my 10% already

Phantom

Does anyone know the cut off date for when the buy-back will apply?

I.e: If we buy now will we still be able to get the offer of buy-back?

 

[Big_Daz]

Re: AVX - Avexa Limited

Does anyone know the cut off date for when the buy-back will apply?

I.e: If we buy now will we still be able to get the offer of buy-back?

The Progen shareholder group who was trying to reject the proposed merger were unsuccessful. I would have thought AVX shareholders would have been more dissapointed.

Nevertheless, can anyone help me out with the buy back cut-off date?

 

[Goldmann]

Re: AVX - Avexa Limited

The Progen shareholder group who was trying to reject the proposed merger were unsuccessful. I would have thought AVX shareholders would have been more dissapointed.

Nevertheless, can anyone help me out with the buy back cut-off date?

The cut off date is in the presentations...

As for being disapointed, as i said earlier - i think the Progen deal gives AVX an escape clause, a plan if nothing else is reached, a contingency...

with one quarter left of cash, things would of gone pearshaped for AVX sooner rather than later if no white knight came along...

I for one am still content to hold AVX til 2010 as originally planned... this just guarentees now that AVX will get to 2010... had no credit crisis eventuated - things would be very different - but no point trying to whinge about what has already happened... AVX and other small caps are a risk,.. id be more annoyed if i had cash tied up in OZ minerals or ABC or some thing witha supposed less risky profile...

Progren seem like they have nothing.. except cash.. so AVX will take that cash and give Progen holders something to hold for... Progen were coming to the table with the cash, yet their board representation is very low, and they got neither or chairman or CEO.. what does that tell you??? take the 1.35 a share and dont let the door smack your butt on the way out...

AVX now have what they need to get to the end game...

 

[Go Nuke]

Re: AVX - Avexa Limited

I read this is Saturdays paper.

Goes to show some people are unhappy about all this.

http://www.news.com.au/couriermail/story/0,23739,24893132-3122,00.html

 

[Goldmann]

Re: AVX - Avexa Limited

AVX up 29% at present and as high as .12 for the day??? Bizarre!

Cant see it being related to the FP report issued last night which had it as a hold... but did have a positive sentiment in my opinion...

 

[Poppypop]

Re: AVX - Avexa Limited

Yes, very happy day indeed. I have been buying and selling this stock for a $10,000 profit since it was .13c. I found out about this stock through a friends, friend at work who had lost a lot of money on it. Now I own 700,000 shares with an average price of .9c. So todays massive price rise is certainly welcome, but I have no plans of selling this stock just yet. I can see it hovering between the $1 to $4 mark within the next 3 years (unless a HIV cure is found by another company of course).


I have only been trading on the sharemarket since Octobler 08, so I'm sorry if you think i come across as a complete noob, but I am excited indeed as my portfolio currently sits at 25% in the black after 3 months, which is a hell of a lot better than the 5 % at the banks per annum.

 

[Go Nuke]

Re: AVX - Avexa Limited

well at least you are getting in at a good time.

Had you of bought in a few months before the end of the bull market, you would be saying the same thing...but would you have sold...or lived in hope that share prices would turn around anyday now?

I waited as all I knew that it was too easy to make money during a bull market...but gee you can lose it just as easy when the tide turns the other way.

As Ive been holding from $1, then buying more witht he rights issue at 53c, I hope your right and we all see $1,$2,$3 ++

 

[jonnycage]

Re: AVX - Avexa Limited

anyone buyings these in the dips of 6.5cents to 7.5 cents ?

hoping for a spike that lasts ones of these days !

 

[Goldmann]

Re: AVX - Avexa Limited

sold half of my AVX to buy same amount in PGL (as insurance against the PGL holders not backing the merger!)... without the merger - AVX is dead in the water...

i still believe in AVX and ATC... so fingers crossed the merge goes through to give AVX access to the cash they need to get this one across the line commercially!