PRELIMINARY
COPY SUBJECT TO COMPLETION
DATED
JANUARY __, 2009
BIOTECHNOLOGY
VALUE FUND, L.P.
January
__, 2009
Fellow
Stockholders:
Biotechnology
Value Fund, L.P. (“BVF”) and the other participants in this solicitation
(collectively, the “BVF Group”) are significant stockholders of Avigen, Inc., a
Delaware corporation (“Avigen” or the “Company”). For the reasons set
forth in the attached Proxy Statement, the BVF Group does not believe that the
Board of Directors of the Company (the “Board”) is acting in the best interests
of its stockholders. The BVF Group is therefore seeking your support
at the special meeting of stockholders, called by the Company at the request of
BVF, scheduled to be held at _____________, _______, _______, ________, on
____________ __, 2009 at _______ _.m., ___________, for the purpose of removing
all of the existing directors serving on the Board at the time of the special
meeting, without cause, amending the Company’s Amended and Restated Bylaws to
permit stockholders to elect directors to the Board when the entire Board is
vacant and electing the BVF Group’s slate of director nominees to replace the
removed directors.
The BVF
Group urges you to carefully consider the information contained in the attached
Proxy Statement and then support its efforts by signing, dating and returning
the enclosed GOLD proxy
card today. The attached Proxy Statement and the enclosed GOLD proxy card are first
being furnished to the stockholders on or about January [__],
2009. If you have already voted against the proposals described in
the Proxy Statement, you have every right to change your votes by signing,
dating and returning a later dated proxy.
If you
have any questions or require any assistance with your vote, please contact
MacKenzie Partners, Inc., which is assisting us, at their address and toll-free
numbers listed on the following page.
|
Thank
you for your support,
|
|
|
|
|
|
Mark
N. Lampert
|
|
Biotechnology
Value Fund, L.P.
|
|
If
you have any questions, require assistance in voting your GOLD proxy
card,
or
need additional copies of the BVF Group’s proxy materials, please
call
MacKenzie
Partners at the phone numbers listed below.
105
Madison Avenue
(212)
929-5500 (Call Collect)
or
|
SPECIAL
MEETING OF STOCKHOLDERS
OF
AVIGEN,
INC.
_________________________
PROXY
STATEMENT
OF
BIOTECHNOLOGY
VALUE FUND, L.P.
_________________________
PLEASE
SIGN, DATE AND MAIL THE ENCLOSED GOLD PROXY CARD TODAY
Biotechnology
Value Fund, L.P. (“BVF”), Biotechnology Value Fund II, L.P. (“BVF2”), BVF
Investments, L.L.C. (“BVLLC”), Investment 10, L.L.C. (“ILL10”), BVF Partners
L.P. (“Partners”), BVF Inc. (“BVF Inc.”), Mark N. Lampert, Matthew D. Perry,
Oleg Nodelman and Robert M. Coppedge (collectively, the “BVF Group”) are
significant stockholders of Avigen, Inc., a Delaware corporation (“Avigen” or
the “Company”). Each member of the BVF Group is a participant in this
solicitation. The BVF Group does not believe that the Board of
Directors of the Company (the “Board”) is acting in the best interests of its
stockholders. The BVF Group is therefore seeking your support at the
special meeting of stockholders (the “Special Meeting”), called by the Company
at the request of the BVF Group, scheduled to be held at _____________, _______,
_______, ________, on ____________ __, 2009 at _______ _.m., ___________, for
the following:
|
|
1.
|
To
remove all of the existing directors serving on the Board without
cause,
|
|
|
2.
|
To
amend the Company’s Amended and Restated Bylaws (the “Bylaws”) to permit
stockholders to elect directors to the Board in cases when the entire
Board is vacant,
|
|
|
3.
|
To
elect the BVF Group’s slate of director nominees, Mark N. Lampert, Matthew
D. Perry, Oleg Nodelman and Robert M. Coppedge (the “Nominees”),
and
|
|
|
4.
|
Repeal
any provision of the Company’s Bylaws effected between January 8, 2009,
the date prior to the date we submitted our request to the Company to call
the Special Meeting, and the time this proposal becomes effective (the
“Bylaw Restoration
Proposal”).
|
THIS
SPECIAL MEETING MAY BE THE ONLY OPPORTUNITY FOR STOCKHOLDERS TO DETERMINE THE
FATE OF AVIGEN’S REMAINING CASH – ACT NOW BEFORE IT IS TOO LATE.
ALL
OF THE ABOVE PROPOSALS ARE DESIGNED TO ENSURE THAT STOCKHOLDERS RECEIVE THE FULL
VALUE OF THEIR INVESTMENT IN THE COMPANY AS DESCRIBED BELOW. NEITHER
PROPOSAL NO. 1 NOR PROPOSAL NO. 4 IS SUBJECT TO, OR CONDITIONED UPON, THE
EFFECTIVENESS OF THE OTHER PROPOSALS. PROPOSAL NO. 3 IS SUBJECT TO
THE EFFECTIVENESS OF PROPOSAL NO. 1.
As of
January __, 2009, the approximate date on which this Proxy Statement is being
mailed to stockholders, the BVF Group was the beneficial owner of an aggregate
of 8,819,600 shares of common stock of the Company, which currently represents
approximately 29.63% of the issued and outstanding common stock of the Company,
all of which are entitled to be voted at the Special Meeting. This
Proxy Statement and the GOLD proxy card are first
being furnished to Avigen’s stockholders on or about January __,
2009.
Avigen
has set the record date for determining stockholders entitled to notice of and
to vote at the Special Meeting as [__________] (the “Record
Date”). The mailing address of the principal executive offices of
Avigen are located at 1301 Harbor Bay Parkway, Alameda, California
94502. Stockholders of record at the close of business on the Record
Date will be entitled to vote at the Special Meeting. According to
Avigen, as of the Record Date, there were [_________] shares of common stock,
$0.001 par value per share (the “Shares”), outstanding and entitled to vote at
the Special Meeting. The participants in this solicitation intend to
vote all of their Shares FOR the proposals described
herein.
THE BVF
GROUP URGES YOU TO SIGN, DATE AND RETURN THE GOLD PROXY CARD IN FAVOR OF
THE REMOVAL AND REPLACEMENT OF THE DIRECTORS SERVING ON THE BOARD AT THE TIME OF
THE SPECIAL MEETING, THE PROPOSAL TO AMEND THE BYLAWS TO PERMIT STOCKHOLDERS TO
FILL VACANCIES IN INSTANCES WHERE THE ENTIRE BOARD IS VACANT AND FOR THE BYLAW
RESTORATION PROPOSAL, AS DESCRIBED IN THIS PROXY STATEMENT.
IF YOU
HAVE ALREADY SENT A PROXY CARD FURNISHED BY AVIGEN MANAGEMENT TO THE BOARD, YOU
MAY REVOKE THAT PROXY AND VOTE FOR THE REMOVAL AND
REPLACEMENT OF THE DIRECTORS SERVING ON THE BOARD AT THE TIME OF THE SPECIAL
MEETING AS DESCRIBED IN THIS PROXY STATEMENT BY SIGNING, DATING AND RETURNING
THE ENCLOSED GOLD PROXY
CARD. THE LATEST DATED PROXY IS THE ONLY ONE THAT
COUNTS. ANY PROXY MAY BE REVOKED AT ANY TIME PRIOR TO THE SPECIAL
MEETING BY DELIVERING A WRITTEN NOTICE OF REVOCATION OR A LATER DATED PROXY FOR
THE SPECIAL MEETING TO THE BVF GROUP, C/O MACKENZIE PARTNERS, INC., WHO IS
ASSISTING IN THIS SOLICITATION, OR TO THE SECRETARY OF AVIGEN, OR BY VOTING IN
PERSON AT THE SPECIAL MEETING.
IMPORTANT
Your
vote is important, no matter how few Shares you own. The BVF Group
urges you to sign, date, and return the enclosed GOLD proxy card today to vote
FOR the removal and replacement of the directors serving on the Board at the
time of the Special Meeting.
|
|
●
|
If
your Shares are registered in your own name, please sign and date the
enclosed GOLD
proxy card and return it to the BVF Group, c/o MacKenzie Partners,
Inc., in the enclosed envelope
today.
|
|
|
●
|
If
any of your Shares are held in the name of a brokerage firm, bank, bank
nominee or other institution on the Record Date, only it can vote such
Shares and only upon receipt of your specific
instructions. Accordingly, please contact the person
responsible for your account and instruct that person to execute on your
behalf the GOLD
proxy card. The BVF Group urges you to confirm your
instructions in writing to the person responsible for your account and to
provide a copy of such instructions to the BVF Group, c/o MacKenzie
Partners, Inc., who is assisting in this solicitation, at the address and
telephone numbers set forth below, and on the back cover of this Proxy
Statement, so that we may be aware of all instructions and can attempt to
ensure that such instructions are
followed.
|
If you
have any questions regarding your proxy,
or need
assistance in voting your Shares, please call:
105
Madison Avenue
(212)
929-5500 (Call Collect)
or
CALL TOLL FREE (800)
322-2885
BACKGROUND
TO SOLICITATION
The
members of the BVF Group are currently the beneficial owners of an aggregate of
8,819,600 Shares, representing approximately 29.63% of the issued and
outstanding common stock. As significant stockholders of Avigen, we
have one goal: to maximize the value and minimize the risk on behalf
of all stockholders. A brief synopsis of Avigen corporate history as
well as our recent efforts to maximize stockholder value is summarized in the
following chronology of events leading up to this proxy
solicitation:
We first
became a shareholder of Avigen in 2005, the year Avigen sold, for $12 million,
its unsuccessful gene therapy business in which the Company had invested over
$150 million. The Company, led by its current CEO, Ken Chahine, spent nearly two
years running a “process” with the mandate to re-invent the Company by investing
in whatever the current management team deemed compelling. In January
2006, this management team chose to acquire its lead development candidate,
AV650, because, in their own words, “we believe it is a low risk.” In
fact the Company’s entire strategy, then and now, is supposedly “designed to
mitigate the risk of bringing innovative therapies to U.S.
patients.” $100 million later, on October 21, 2008, Avigen announced
the outright failure of its “low risk” bet on AV650, resulting in a collapse in
the Company’s stock price. This same management team and Board, which
has failed previously, now wishes to bet the substantial remaining shareholder
capital on whatever it deems appropriate.
We
recently acquired a significant number of Shares and became the largest
stockholder of Avigen. We increased our investment in October 2008
based upon our belief that Avigen’s shares were significantly
undervalued. In fact, Avigen reported $56 million, or $1.88 per
Share, of financial assets as of September 30, 2008, consisting of cash, cash
equivalents, available-for-sale securities and restricted investments, while
trading at a price well below $1.00 during the two months prior to filing this
proxy statement. We believe this depressed trading price,
substantially below Avigen’s cash liquidation value, is based upon the market’s
concern that management and the existing Board will pursue ill-advised or other
value destroying ventures, at stockholders’ expense, while compensating
themselves in the process.
Since
this time, we have reached out to the Board numerous times, each time raising
our concern that Avigen’s existing liquid assets not be wasted or otherwise
committed to value destroying ventures.
We have
specifically suggested that the Board “guaranty” the worst case outcome for all
stockholders. This guaranty could be accomplished in several ways,
including by dividending or distributing all excess cash to stockholders at the
present time, or by offering to buy back any and all Shares from stockholders
that wish to sell at a specific price at a specific future date (e.g. $1.25 per
Share in December 2009). At no time have we asked for – nor would we
accept – any consideration or benefit for ourselves that would not be offered to
all stockholders.
The Board
has ignored our attempts to work constructively for the benefit of all
stockholders. Avigen responded to our offers by unilaterally
increasing and broadening management’s “golden parachute” severance agreements
and unilaterally adopting a “poison pill,” raising our concerns about this
Board’s true intentions.
The
Board’s “golden parachute” severance agreements with management, under the
ridiculous justification that such payouts are necessary to “attract and retain
key employees,” is particularly outrageous given Avigen’s current
circumstances. Our analysis indicates that these payouts, which we
believe would be triggered by most “change in control” scenarios, including a
liquidation, total at least $3 million, an incredible 16.5% of the Company’s
entire market value at the time of adoption. The recipients of these
golden parachute arrangements include Avigen’s CEO, Ken Chahine, who resides in
Park City, Utah, while the Company is based in California. We
question how the Company can justify such actions as necessary to “attract and
retain key employees” when Avigen has no real business at this time and has
abandoned the development of all its products. These hastily adopted
severance arrangements need to be challenged and, if possible,
revoked.
In
addition, we believe the Board’s implementation of the “poison pill” serves no
purpose other than to entrench the Board and keep BVF from purchasing additional
stock in the Company. We are concerned that management and Board members are
more concerned with retaining their jobs and compensation than with maximizing
stockholder value. As evidence, Avigen’s stock price fell more than 20% after
the adoption of the poison pill. The pill should be redeemed. The
Board’s recent actions reveal its true self-interest and leave us concerned that
the Board will indeed destroy and/or take all remaining value.
On
December 22, 2008, MediciNova, Inc. (“MediciNova”), a company in which we have
no economic interest, proposed to merge with Avigen in an innovative and, we
believe, compelling downside-protected structure. We believe the
proposed merger is uncontrovertibly in the best interest of all stockholders and
we had grave concerns that the Board may not negotiate in good faith with
MediciNova, if at all. Avigen’s statements apparently rejecting this
proposal confirmed our worst fears. We are concerned that the Board’s
and management’s self-interest will prevent them from acting in what we believe
to clearly be the best interests of all stockholders.
Accordingly,
after much consideration we felt compelled to call this special meeting of
stockholders to remove the existing directors and to elect new, truly
independent directors who, if elected, will take actions to benefit all
stockholders, including redeeming Avigen’s stockholder rights plan, working to
consummate the proposed transaction with MediciNova and/or working to complete a
distribution of Avigen’s assets to all stockholders.
We
encourage you to review the remainder of this Proxy Statement, which describes
in greater detail our concerns and the proposals contained herein.
PROPOSAL
NO. 1
REMOVAL
OF EXISTING DIRECTORS SERVING ON
AVIGEN’S
BOARD
Pursuant
to the Amended and Restated Certificate of Incorporation of Avigen (the
“Charter”), the stockholders may remove any director with cause by a majority
vote of all outstanding Shares or without cause by a sixty-six and two-thirds
percent (66-2/3%) vote of all outstanding Shares. We are seeking to
remove all of the existing directors serving on the Board at the time of the
Special Meeting without cause.
We
believe the Board is currently composed of six directors as set forth below,
each of whom will be removed if Proposal No. 1 is approved:
|
|
|
|
Zola
Horovitz, Ph.D.
|
Chairman
of the Board, Director
|
|
Kenneth
G. Chahine, J.D., Ph.D.
|
President,
Chief Executive Officer, Director
|
|
John
K. A. Prendergast, Ph.D.
|
Director
|
|
Richard
J. Wallace
|
Director
|
|
Stephen
Dilly, M.B.B.S., Ph.D.
|
Director
|
|
Jan
K. Öhrström, M.D.
|
Director
|
REASONS
FOR REMOVING EXISTING DIRECTORS
We do not
believe the current directors serving on the Board are acting in the best
interests of the stockholders. We are concerned that the Board will
not take the steps we believe are necessary to preserve stockholder
value. We believe recent actions taken by the Board indicate they are
more interested in acting in their own self-interest rather than in the best
interests of stockholders.
This
Special Meeting may be the only opportunity for stockholders to determine the
fate of Avigen’s substantial remaining cash.
Recent
actions and statements by the Company indicate that the existing management and
Board are prepared to ignore the best interests of the Company’s
stockholders. They may believe they are entitled to control Avigen,
rather than serve the Company’s true owners – stockholders. If this
Board and management are not replaced at this Special Meeting, stockholders may
lose any hope of determining the fate of Avigen’s cash. Members of
the BVF Group have no economic interest in MediciNova, neither presently nor
historically. If elected to the Board, none of Messrs. Lampert, Perry
or Nodelman intends to accept any director fees from the Company. The
BVF Group’s only interest is as a stockholder.
We
question the Board’s commitment to maximizing stockholder value in light of its
apparent rejection of the recent merger proposal by MediciNova
On
December 22, 2008, MediciNova, in a letter to Avigen’s Chairman, described the
details of a proposed merger between MediciNova and Avigen (the “Proposed
Merger”), which it had submitted to the Company on December 9,
2008. The Board, in its letter to stockholders dated December 22,
2008 (the “December 22 Letter”), noted that it had rejected the transaction
because the Board’s “criteria fundamentally differ.” Presumably,
based on this “criteria,” the Board found the merger offer by MediciNova
unworthy of consideration. We find this conclusion troubling,
especially in light of the extraordinary benefits we believe the proposed merger
would provide Avigen stockholders including:
|
|
·
|
Downside
Protection: Based
on our analysis, subsequent to the Proposed Merger, if MediciNova is
unsuccessful Avigen stockholders will still receive the approximate
current liquidation value of Avigen (which we estimate to be approximately
$1.25/Share, net of debt and expenses), as determined by an independent
auditor. This means that, even in the worst-case scenario, the Proposed
Merger would yield an over 40% premium to Avigen’s stock price as of
January 8, 2009, the date prior to the date we submitted our request to
the Company to call the Special
Meeting.
|
|
|
·
|
Tremendous Upside
Potential: Based on our analysis, if MediciNova is
successful post-merger, Avigen stockholders could own a substantial
percentage of MediciNova (approximately 45% of the combined
company). Under the best-case scenario, the Proposed Merger
could lead to an extraordinary, uncapped return for Avigen
stockholders.
|
|
|
·
|
Free
Option: Under the terms of the Proposed Merger,
stockholders would have at least one year after the merger is consummated
to choose whether they want downside protection or upside potential, as
described above. We believe this free option period offers
stockholders tremendous upside potential with low
risk.
|
|
|
·
|
New Stewardship of the
Company’s Assets: If successfully completed, the
Proposed Merger would result in new stewardship of Avigen’s assets,
curtailing the Board’s and management’s stated plan of seeking ways to
utilize and, we fear, waste the Company’s remaining assets. We
believe new management is key to protecting the Company’s assets,
particularly in light of Chief Executive Officer Ken Chahine’s recent
statements regarding the future of the Company, including that “it’s hard
to put a finger on exactly what we would do,” that he “intends to build”
and that he “thinks that there are opportunities outside of
therapeutics.”
|
|
|
·
|
Unique
Synergies: We strongly believe there are unique
synergies between MediciNova and Avigen that likely would not exist with
other potential acquirers of Avigen. These synergies, we
believe, give rise to the compelling nature of the Proposed
Merger.
|
We
believe the benefits of the Proposed Merger provide the best opportunity for
stockholders to receive the maximum value for their investment and feel this
Board and management should be doing everything in their power to ensure the
merger is consummated. That this Board has not only come out against
the Proposed Merger, but also stated that they plan to move forward assessing
potential M&A opportunities, is just further example of this Board’s
willingness to act in its own interests, rather than that of
stockholders.
We
believe the unilateral action by the Board to increase and broaden management’s
“golden parachute” severance agreements serves no interest other than the
Board’s and management’s entrenchment
Our
belief the Board will destroy the Company’s remaining value is further bolstered
by recent actions taken by the Board to increase and broaden management’s
“golden parachute” severance agreements. According to an 8-K filed by
the Company on November 5, 2008, in a supposed effort to “attract and retain”
key executive talent, the Board broadened the Company’s “golden parachute”
severance agreements to be effective regardless of whether an executive’s
employment terminates as part of a “change in control.”
The Board
also increased the benefits received under the agreements by between 16% and
25%, even though the Company’s stock price had dropped by 87.8% from the
previous year. According to our calculations, the payouts under these
agreements would total at least $3 million, an incredible 16.5% of the Company’s
market value at the time of adoption. We question how the Board can
justify such actions as necessary to “attract and retain key employees” when
Avigen has no real business at this time and has abandoned the development of
all of its products. We believe the agreements in no way benefit
stockholders and need to be revoked immediately. If the Nominees are
elected, subject to their fiduciary obligations, they will review if these
hastily adopted severance agreement are legal under state law, and take all
appropriate actions.
We
believe the unilateral action by the Board to adopt a “poison pill” is an
attempt by the Board and management to ensure the retention of their jobs and
their compensation
On
November 24, 2008, the Board disclosed that it had unilaterally adopted a
“poison pill.” We believe the institution of the poison pill is
another example of the Board acting in an effort to ensure the retention of
their jobs and compensation instead of acting to maximize stockholder
value. The institution of a poison pill runs contrary to the
guidelines for corporate governance best practices issued by leading advocates
of stockholder democracy, such as RiskMetrics Group Institutional Stockholder
Services and Glass, Lewis & Co. We question exactly whom the pill
is meant to benefit, especially in light of our proposal to permit the
acquisition of Shares in excess of the pill threshold, but to neutralize the
voting power of those Shares in excess of the threshold. It should
come as no surprise that the Board rejected our offer. In our
opinion, the pill serves no reasonable purpose other than for the entrenchment
of directors and demonstrates a disregard for the interests of stockholders and
needs to be redeemed immediately. If our nominees are elected,
subject to their fiduciary obligations, they will take such actions as are
necessary to redeem the “poison pill.”
We
believe this Board continues to act in its own self-interest at the expense of
stockholders
In the
December 22 Letter, the Board also outlined its plan to create value for
stockholders in 2009. According to the December 22 Letter, the Board
has unilaterally decided to search for “strategic opportunities” because of its
belief that “the potential for a strategic merger [is] worthy of consideration”
with no mention of downside protection for current stockholders. We
remind the Board that Avigen was a “biopharmaceutical company focused on
developing and commercializing small molecule therapeutics to treat serious
neurological and neuromuscular disorders.” To our knowledge, Avigen
is not an investment or business development company and the suggestion that
this Board and management contains some sort of “unique know-how and proven
track record” with respect to selling Avigen or pursuing acquisition
opportunities is, we believe, far-fetched and dangerous.
We also
note that in the December 22 Letter, the Board and management claim to have
“acted swiftly and decisively to preserve cash.” We question the
benefit of such action since no effort was made to guaranty the worst-case
outcome for all stockholders. We believe the Board, if it were truly
interested in protecting stockholder assets, could have accomplished such a
guaranty in several ways, including by dividending or otherwise distributing all
excess cash to stockholders now, or by offering to buy back any and all shares
from holders that wish to sell at a specific price at a specific future date
(i.e., $1.25 per share in December 2009). In both cases, stockholders
could stand to reap potentially substantial upside derived from the monetization
of Avigen’s remaining assets and could finally stop worrying about whether this
Board and management will destroy the Company’s substantial cash
value.
Dismal
Share Price Performance
Last, but
certainly not least, is Avigen’s ever-worsening stock price. Since
January 1, 2004, Avigen’s stock price has fallen by more than
90%. During that time the company has accumulated a deficit of more
than $110 million. Additionally, the Company’s stock presently trades
at a deep discount to its net per share cash value. We believe this
is due to the perception of the investment community that this Board will
destroy the Company’s remaining value.
The
BVF Group urges you to vote FOR its proposal to remove all of the existing
directors serving on the Board on the enclosed GOLD proxy card. End
the disregard for stockholder value. Vote to remove the existing
directors and elect a new slate of directors who will truly represent
stockholders and work to maximize stockholder value.
PROPOSAL
NO. 2
PROPOSAL
TO AMEND THE BYLAWS TO PERMIT STOCKHOLDERS TO ELECT DIRECTORS TO THE BOARD IN
CASES WHEN THE ENTIRE BOARD IS VACANT
The
Charter states that any vacancies on the Board resulting from removal shall,
unless the Board determines by resolution that any such vacancies shall be
filled by the stockholders, be filled only by the affirmative vote of a majority
of the directors then in office and not by the stockholders. We believe the
Board should adopt this resolution prior to the Special Meeting permitting
stockholders to elect replacement directors, as required by their fiduciary
obligations to stockholders. The adoption of such a resolution would
permit the election of new directors by stockholders following the removal of
the incumbent directors. However, in the event it does not do so, we
have proposed a bylaw amendment to permit stockholders to elect directors to
fill the vacancies created by the removal of the directors upon the approval of
Proposal No. 1.
We
believe the Charter provision does not contemplate situations in which the
entire Board is vacant, and there is no remaining director to appoint
replacement directors. Accordingly, we have proposed a bylaw
amendment that would allow stockholders to fill vacancies on the Board in
instances where the entire Board is vacant. We believe that even
without the approval of this bylaw amendment, if all directors are removed, then
stockholders have the right to elect replacement directors since there would be
no director remaining to appoint replacements to the vacancies created by the
removal. To avoid any uncertainty, however, we have proposed this
bylaw amendment and recommend that it be approved. The form of
amendment is below.
If a
legitimate challenge is raised as to the election of our nominees following the
removal of all existing directors, we intend to file a complaint in the Delaware
Court of Chancery seeking relief pursuant to Section 225 (“Section 225”) of the
Delaware General Corporation Law (“DGCL”) for, among other things, a declaration
that the Nominees have been duly elected to the Board. Should the
Court determine that no valid election has been held and order an election of
directors to be held in accordance with Section 211 of the DGCL, we intend to
use validly executed GOLD proxies at such election.
Accordingly,
you are being asked to amend the Bylaws in order to expressly allow stockholders
to fill vacancies on the Board in instances where no directors currently serve
on the Board and the entire Board is vacant, by amending Section 18 of Article
IV of the Bylaws by replacing the second sentence of such section with the
following:
“In cases
where the entire Board of Directors is vacant and no directors then remain in
office, vacancies on the Board of Directors shall be filled by
stockholders. Any director elected in accordance with this section
shall hold office for the remainder of the full term of the director for which
the vacancy was created or occurred and until such director’s successor shall
have been elected and qualified.”
The
BVF Group urges you to vote FOR its proposal to amend the Bylaws to permit
stockholders to elect directors to the Board in cases when the entire Board is
vacant on the enclosed GOLD proxy card.
PROPOSAL
NO. 3
PROPOSAL
TO ELECT THE NOMINEES
The Board
is currently composed of six directors divided into three classes, Class I,
Class II and Class III. Subject to the removal of such directors
pursuant to Proposal No. 1, the BVF Group has nominated four highly qualified
Nominees who, if elected, could constitute the entire board of directors and
will hold office until the expiration of their respective terms and until their
successors have been elected and qualify.
If the
Nominees are elected, they will, subject to their fiduciary duties as directors,
take the necessary steps to remove any obstacles to consummating the Proposed
Merger, including the redemption of the “poison pill” and exempting prospective
merger partners from the application of Section 203 of the DGCL.
The
Nominees
The
following information sets forth the name, age, business address, present
principal occupation, and employment and material occupations, positions,
offices, or employments for the past five years of each of the
Nominees. Each of the Nominees is a citizen of the United States of
America. Mr. Lampert is being nominated as a Class I
director. Mr. Coppedge is being nominated as a Class II
director. Messrs. Perry and Nodelman are being nominated as Class III
directors.
Mark Lampert (Age 48) is the
Founder and General Partner of Biotechnology Value Fund, L.P., a San
Francisco-based, private investment partnership focused on the biotechnology
industry, which he founded in 1993. Mr. Lampert also serves as an
officer and director of BVF Inc. Mr. Lampert currently serves as a
director of Acumen Pharmaceuticals, a private biotechnology company developing
medicines and diagnostics for Alzheimer’s disease and memory loss, Biotica
Technology Ltd, a private company focused on development stage drug discovery,
and Mendel Biotechnology, Inc., a private plant biotechnology company that
develops products with enhanced yield and quality focused on row crops and
cellulosic biofeedstocks. Mr. Lampert earned his Masters of Business
Administration from Harvard Business School and an A.B. in chemistry from
Harvard College. The principal business address of Mr. Lampert is One
Sansome Street, 31st Floor, San Francisco, California 94104. By
virtue of his positions with BVF Inc., Mr. Lampert shares the power to vote and
dispose of the Shares beneficially owned by BVF Inc. Accordingly, Mr.
Lampert may be deemed to be the beneficial owner of the Shares owned by BVF
Inc. For information regarding purchases and sales during the past
two years by BVF Inc. and its affiliates of securities of Avigen that are deemed
to be beneficially owned by Mr. Lampert, see Schedule
I.
Matthew D. Perry (Age 36) has
served as a Portfolio Manager of BVF Partners, L.P., since
1999. Prior to becoming Portfolio Manager, Mr. Perry served as an
analyst from 1996 to 1999. Prior to joining BVF Partners, L.P. in
1996, Mr. Perry was an account executive with Feinstein Partners (“FPI”), a
consulting firm with an emphasis on investor relations for emerging health care
companies focused on the discovery, development and commercialization of
therapeutics. He was simultaneously an account executive with FPI’s
affiliate, Kendall Strategies, a business development and strategy consulting
firm assisting start-ups through large, public biotechnology
companies. Mr. Perry is also a co-founder and director of Nordic
Biotech, a European-based venture capital fund. Mr. Perry holds a
B.S. degree from the Biology Department of the College of William and
Mary. The principal business address of Mr. Perry is One Sansome
Street, 31st Floor, San Francisco, California 94104. Mr. Perry does
not directly own any securities of Avigen nor has he made any purchases or sales
of any securities of Avigen during the past two years. Mr. Perry, as
a member of the BVF Group, may be deemed to be the beneficial owner of the
shares of Common Stock owned by the members of the BVF Group. For
information regarding purchases and sales during the past two years by the
members of the BVF Group of securities of Avigen that may be deemed to be
beneficially owned by Mr. Perry, see Schedule
I.
Oleg Nodelman (Age 31) has
served as a Portfolio Manager of BVF Partners, L.P., since 2005. Mr.
Nodelman joined BVF Partners, L.P. as an analyst in 2001. Mr. Nodelman has
experience serving on the board of directors of several early stage start-ups.
Before joining BVF Partners, L.P., Mr. Nodelman was a consultant with Mercer
Management Consulting (“Mercer”), now Oliver Wyman, a strategy
firm. At Mercer, he worked with senior management from companies in a
variety of industries to develop and implement long-term strategy and build
shareholder value. Mr. Nodelman holds a Bachelor of Science degree,
with a focus on Science and Technology, from the School of Foreign Service at
Georgetown University. The principal business address of Mr. Nodelman
is One Sansome Street, 31st Floor, San Francisco, California
94104. Mr. Nodelman does not directly own any securities of Avigen
nor has he made any purchases or sales of any securities of Avigen during the
past two years. Mr. Nodelman, as a member of the BVF Group, may be
deemed to be the beneficial owner of the shares of Common Stock owned by the
members of the BVF Group. For information regarding purchases and
sales during the past two years by the members of the BVF Group of securities of
Avigen that may be deemed to be beneficially owned by Mr. Nodelman, see Schedule
I.
Robert M. Coppedge (Age 33) is
a founding Partner of Seattle-based Faultline Ventures (“Faultline”), a firm
focused on supporting disruptive innovations in health care, which he founded in
2008. Prior to founding Faultline, Mr. Coppedge served as senior vice
president and principal at Capitol Health, a venture capital firm specializing
in early-state health services, from 1997 until 2008. In 2004, Mr.
Coppedge served on a special panel of the Centers for Medicare and Medicaid
Services that reviewed applications for the Chronic Care Improvement Program,
now called Medicare Health Support. Mr. Coppedge is also a founder
and director of Nashville, Tennessee based Leadership Health Care, an
organization formed in partnership with the Nashville Health Care Council to
foster the next generation of health care leaders by creating educational,
mentoring and networking opportunities for members. Mr. Coppedge was
a member of the development committee of the Phillips Collection’s Board of
Trust and the Phillips Collection Contemporaries Steering Committee from 1999 to
2004 and served as its chair from 2001–2003. Mr. Coppedge is also a
former member of the Board of Advisors to National Foundation of Teaching
Entrepreneurship. Mr. Coppedge earned his Bachelors degree in history
from Georgetown University and is a Chartered Financial Analyst. The
principal business address of Mr. Coppedge is 600 Stewart Street, Suite 1400,
Seattle, Washington 98101. Mr. Coppedge does not directly own any securities of
Avigen nor has he made any purchases or sales of any securities of Avigen during
the past two years. Mr. Coppedge, as a member of the BVF Group, may
be deemed to be the beneficial owner of the shares of Common Stock owned by the
members of the BVF Group. For information regarding purchases and
sales during the past two years by the members of the BVF Group of securities of
Avigen that may deemed to be beneficially owned by Mr. Coppedge, see Schedule
I.
There can
be no assurance that the actions our Nominees intend to take as described above
will be implemented if they are elected or that the election of our Nominees
will improve Avigen’s business or otherwise enhance stockholder value. Your vote
to elect the Nominees does not constitute a vote in favor of our value enhancing
plans for the Company. Your vote to elect the Nominees will have the
legal effect of replacing the directors serving on the Board at the time of the
Special Meeting with our Nominees. There can be
no assurance that stockholder value will be maximized as a result of this
solicitation or the election of the Nominees.
The
Nominees will not receive any compensation from the BVF Group for their services
as directors of Avigen. In addition, Messrs. Lampert, Perry and
Nodelman have agreed to not accept any director fees from Avigen in the event
they are elected to the Board. BVF has signed or intends to sign a
letter agreement pursuant to which it agrees to indemnify Mr. Coppedge against
claims arising from the solicitation of proxies from Avigen’s stockholders in
connection with the Special Meeting and any related
transactions. Other than as stated herein, there are no arrangements
or understandings between the BVF Group and any of the Nominees or any other
person or persons pursuant to which the nomination described herein is to be
made, other than the consent by each of the Nominees to be named in this Proxy
Statement and to serve as a director of Avigen if elected as such at the Special
Meeting. Except as otherwise set forth herein, none of the Nominees
is a party adverse to Avigen or any of its subsidiaries or has a material
interest adverse to the Company or any of its subsidiaries in any material
pending legal proceedings.
The BVF
Group does not expect that the Nominees will be unable to stand for election,
but, in the event that such persons are unable to serve or for good cause will
not serve, the Shares represented by the enclosed GOLD proxy card will be voted
for substitute nominees. In addition, the BVF Group reserves the
right to nominate substitute persons if Avigen makes or announces any changes to
its Bylaws or takes or announces any other action that has, or if consummated
would have, the effect of disqualifying the Nominees. In any such
case, Shares represented by the enclosed GOLD proxy card will be voted
for such substitute nominees. The BVF Group reserves the right to
nominate additional persons if Avigen increases the size of the Board above its
existing size.
Change
of Control Provisions
According
to the [Company’s Proxy Statement and Current Report on Form 8-K dated October
30, 2008 and filed by the Company with the Securities and Exchange Commission on
November 5, 2008 (the “Form 8-K”)], in the event the BVF Group’s proposals are
approved and the Nominees are elected, the following change of control
obligations could be triggered if the employment of certain employees of the
Company is terminated following the election:
Under the
Management Transition Plan, as amended, the amount of a Participant’s specific
benefits may vary, depending on whether the Participant’s employment with Avigen
terminates within two months prior to or 12 months following a “change in
control,” as defined in the Management Transition Plan, or whether it occurs
outside of a change in control. Prior to the amendment disclosed in the Form
8-K, participants received the benefits below only if the Participant’s
employment with Avigen terminated due to an involuntary termination or a
constructive termination within two months prior to or 18 months following a
change in control:
|
|
·
|
Salary
continuation for the number of months designated in the Management
Transition Plan Eligibility Notice given to the
participant;
|
|
|
·
|
Accelerated
stock option vesting and extended exercisability as provided in the
Management Transition Plan Eligibility Notice given to the participant;
and
|
|
|
·
|
The
Company will pay the COBRA premiums for the participant for the number of
months designated in the Management Transition Plan Eligibility Notice
given to the participant, or until such earlier date as the participant
shall secure subsequent employment that shall provide the participant with
substantially similar health
benefits.
|
The
current named executive officers of the Company who are participants in the
Management Transition Plan, as amended, and the terms of their participation,
are:
| |
Within
2 months prior to or 12 months
following
a change in control
|
|
Outside
of a change in control
|
|
Name
|
Salary
Continuation
|
Option
Acceleration
|
Option
Extended Exercisability
|
COBRA
Payments
|
|
Salary
Continuation
|
Option
Acceleration
|
Option
Extended Exercisability
|
COBRA
Payments
|
|
Kenneth
Chahine
|
21
months
|
Full
|
2
years
|
18
months
|
|
21
months
|
Full
|
2
years
|
18
months
|
|
Andrew
Sauter
|
15
months
|
Full
|
2
years
|
15
months
|
|
15
months
|
Full
|
2
years
|
15
months
|
|
Michael
Coffee
|
15
months
|
Full
|
2
years
|
15
months
|
|
15
months
|
Full
|
2
years
|
15
months
|
|
Kirk
Johnson
|
15
months
|
Full
|
2
years
|
15
months
|
|
15
months
|
Full
|
2
years
|
15
months
|
|
M.
Christina Thomson
|
15
months
|
Full
|
2
years
|
15
months
|
|
15
months
|
Full
|
2
years
|
15
months
|
In
addition, five additional employees of the Company participate in the Management
Transition Plan, as amended.
The above
disclosure has been extracted from the [Management Proxy Statement] and the Form
8-K. The BVF Group does not take responsibility for the accuracy and
completeness of this information. If the Nominees are elected, they intend to
review the Management Transition Plan discussed above, review all the terms
thereof and evaluate whether the change of control provisions contained therein
have been triggered. If the Nominees are elected, subject to their fiduciary
obligations, they will review if these hastily adopted severance agreements, as
disclosed in the Form 8-K, are legal under state law, and take all appropriate
actions.
The
BVF Group urges you to vote FOR the election of the Nominees on the enclosed
GOLD proxy card.
PROPOSAL
NO. 4
THE
BYLAW RESTORATION PROPOSAL
Pursuant
to the Bylaws, following any request for a special meeting, the Board shall
determine the time and place of such special meeting, which shall be held not
less than thirty-five (35) nor more than one-hundred twenty (120) days after the
date of the receipt of the request. Due to the delay between the time
we submitted our request and the date of the Special Meeting, the Board could
potentially amend the Bylaws to inhibit the action of the Nominees following
their election to the Board through changes to the Bylaws that were not in
effect on January 8, 2009, the date prior to the date we submitted our request
to hold the special meeting to the Company (the “Restoration
Date”). In order to reverse any such action by the Board, we are
asking stockholders to approve the following proposal to restore the Bylaws to
the version in effect as of the Restoration Date (the “Bylaw Restoration
Proposal”).
“RESOLVED,
that any amendments to the amended and restated bylaws of Avigen, Inc. effected
between January 8, 2009 and the effectiveness of this provision be and are
hereby repealed.”
If the
Board does not effect any change to the version of the Bylaws in effect as of
the Restoration Date, the Bylaw Restoration Proposal will have no
effect. However, if the Board has made changes since that time, the
Bylaw Restoration Proposal, if adopted, will restore the Bylaws to the version
that was in effect as of the Restoration Date, without considering the nature of
any changes the Board may have adopted. As a result, the Bylaw
Restoration Proposal could have the effect of repealing bylaw amendments that
one or more stockholders may consider to be beneficial to them or to the
Company. However, the Bylaw Restoration Proposal will not preclude the Nominees,
if elected, from reconsidering any repealed bylaw changes following the Special
Meeting. We are not currently aware of any specific bylaw provisions
that would be repealed by the adoption of the Bylaw Restoration
Proposal.
The
BVF Group urges you to vote FOR the Bylaw Restoration Proposal on the enclosed
GOLD proxy card.
VOTING
AND PROXY PROCEDURES
Only
stockholders of record on the Record Date will be entitled to notice of and to
vote at the Special Meeting. Each Share is entitled to one
vote. Stockholders who sell Shares before the Record Date (or acquire
them without voting rights after the Record Date) may not vote such
Shares. Stockholders of record on the Record Date will retain their
voting rights in connection with the Special Meeting even if they sell such
Shares after the Record Date. Based on publicly available
information, the BVF Group believes that the only outstanding class of
securities of Avigen entitled to vote at the Special Meeting is the
Shares.
Shares
represented by properly executed GOLD proxy cards will be voted
at the Special Meeting as marked and, in the absence of specific instructions,
will be voted FOR the
proposal to remove the existing directors serving on the Board, FOR the proposal to amend the
Bylaws to permit stockholders to elect directors to the Board in cases when the
entire Board is vacant, FOR
the proposal to elect the Nominees to the Board FOR the Bylaw Restoration
Proposal and in the discretion of the persons named as proxies, on all other
matters as may properly come before the Special Meeting.
We are
asking you to remove the existing directors serving on the Board and replace
them with our Nominees. The participants in this solicitation intend
to vote all of their Shares in favor of the removal of current members of the
Board, the election of the Nominees and the other proposals described in this
Proxy Statement.
QUORUM
A quorum
of stockholders is necessary to hold a valid meeting. A quorum will
be present if at least a majority of the outstanding Shares entitled to vote are
represented by votes at the meeting or by proxy. On the Record Date,
there were [________] Shares outstanding and entitled to vote. Thus,
the holders of [________] Shares must be represented by stockholders present at
the meeting or by proxy to have a quorum.
Your
Shares will be counted towards the quorum only if you submit a valid proxy (or
one is submitted on your behalf by your broker, bank or other nominee) or if you
vote in person at the meeting. Abstentions and broker non-votes will
be counted towards the quorum requirement. If there is no quorum, the chairman
of the Special Meeting or a majority of the votes present at the Special Meeting
may adjourn the Special Meeting to another date.
VOTES
REQUIRED FOR APPROVAL
Vote Required for Proposals Nos. 1,
2 and 4. Approval of the proposal to remove the existing
directors serving on the Board, the proposal to amend the Bylaws to permit
stockholders to elect directors to the Board in cases when the entire Board is
vacant and the Bylaw Restoration Proposal each require the affirmative vote of
at least sixty-six and two-thirds percent (66-2/3%) of the voting power of the
Shares outstanding as of the Record Date. Abstentions and broker
non-votes will act as a vote against each of these proposals.
Vote Required for Proposal No.
3. For the election of the directors, the nominees receiving
the most “For” votes (among votes properly cast in person or by proxy) will be
elected. Abstentions and broker non-votes will have no effect on this
proposal.
Stockholders
may cast their votes by marking the ballot at the meeting or by specific voting
instructions sent with a signed proxy to either the BVF Group, in care of
MacKenzie Partners, Inc. at 105 Madison Avenue, New York, New York
10016.
ABSTENTIONS;
BROKER NON-VOTES
Abstentions
and broker non-votes will be counted towards the quorum requirement. Abstentions
and broker non-votes will have the effect of a vote against Proposals Nos. 1, 2
and 4. Abstentions and broker non-votes will have no effect on
Proposal No. 3.
DISCRETIONARY
VOTING
Shares
held in “street name” and held of record by banks, brokers or nominees may not
be voted by such banks, brokers or nominees unless the beneficial owners of such
Shares provide them with instructions on how to vote.
REVOCATION
OF PROXIES
Stockholders
of Avigen may revoke their proxies at any time prior to exercise by attending
the Special Meeting and voting in person (although attendance at the Special
Meeting will not in and of itself constitute revocation of a proxy) or by
delivering a written notice of revocation. The delivery of a
subsequently dated proxy which is properly completed will constitute a
revocation of any earlier proxy. The revocation may be delivered
either to the BVF Group in care of MacKenzie Partners, Inc. at the address set
forth on the back cover of this Proxy Statement or to 1301 Harbor Bay Parkway,
Alameda, California 94502 or any other address provided by
Avigen. Although a revocation is effective if delivered to Avigen, we
request that either the original or photostatic copies of all revocations be
mailed to the BVF Group in care of MacKenzie Partners, Inc. at the address set
forth on the back cover of this Proxy Statement so that the BVF Group will be
aware of all revocations and can more accurately determine if and when proxies
have been received from the holders of record on the Record Date of a majority
of the outstanding Shares. Additionally, MacKenzie Partners, Inc. may
use this information to contact stockholders who have revoked their proxies in
order to solicit later dated proxies for the proposals described
herein.
IF
YOU WISH TO VOTE FOR THE PROPOSAL TO REMOVE THE DIRECTORS SERVING ON THE BOARD
AT THE TIME OF THE SPECIAL MEETING, FOR THE PROPOSAL TO AMEND THE BYLAWS TO
PERMIT STOCKHOLDERS TO ELECT DIRECTORS TO THE BOARD IN CASES WHEN THE ENTIRE
BOARD IS VACANT, FOR THE PROPOSAL TO ELECT THE NOMINEES TO THE BOARD AND FOR THE
BYLAW RESTORATION PROPOSAL, PLEASE SIGN, DATE AND RETURN PROMPTLY THE ENCLOSED
GOLD PROXY CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED.
SOLICITATION
OF PROXIES
The
solicitation of proxies pursuant to this Proxy Statement is being made by the
BVF Group. Proxies may be solicited by mail, facsimile, telephone,
telegraph, in person and by advertisements. [The BVF Group will not
solicit proxies via the Internet].
The BVF
Group has entered into an agreement with MacKenzie Partners, Inc. for
solicitation and advisory services in connection with this solicitation, for
which MacKenzie Partners, Inc. will receive a fee not to exceed $50,000.00,
together with reimbursement for its reasonable out-of-pocket expenses. MacKenzie
Partners, Inc. will solicit proxies from individuals, brokers, banks, bank
nominees and other institutional holders. The BVF Group has requested
banks, brokerage houses and other custodians, nominees and fiduciaries to
forward all solicitation materials to the beneficial owners of the Shares they
hold of record. The BVF Group will reimburse these record holders for
their reasonable out-of-pocket expenses in so doing. It is
anticipated that MacKenzie Partners, Inc. will employ approximately [__] persons
to solicit stockholders for the Special Meeting.
The
entire expense of soliciting proxies is being borne by the BVF Group pursuant to
the terms of the Joint Filing and Solicitation Agreement (as described
below). Costs of this solicitation of proxies are currently estimated
to be approximately $100,000. The BVF Group estimates that through
the date hereof, its expenses in connection with this solicitation are
approximately $25,000.
OTHER
PARTICIPANT INFORMATION
Each
member of the BVF Group is a participant in this solicitation. The
principal business of BVF, BVF2, BVLLC, ILL10, Partners and BVF Inc. is holding
biotechnology stocks for investment purposes. Partners serves as the
general partner of BVF and BVF2, the manager of BVLLC and the investment adviser
of ILL10. BVF Inc. serves as the investment adviser and general
partner of Partners. Mr. Lampert serves as a director and officer of
BVF Inc.
The
principal business address of BVF, BVF2, BVLLC, ILL10 and Partners is 900 North
Michigan Avenue, Suite 1100, Chicago, Illinois 60611. The principal
business address of BVF Inc. and Messrs. Lampert, Perry and Nodelman is One
Sansome Street, 31st Floor, San Francisco, California 94104. The
principal business address of Mr. Coppedge is 600 Stewart Street, Suite 1400,
Seattle, Washington 98101.
As of the
date of this filing, BVF beneficially owned 1,975,340 Shares, BVF2 beneficially
owned 1,364,911 Shares, BVLLC beneficially owned 4,969,764 Shares and ILL10
beneficially owned 509,585 Shares.
As the
general partner of BVF and BVF2, the manager of BVLLC and the investment adviser
of ILL10, Partners may be deemed to beneficially own the 8,819,600 Shares
beneficially owned in the aggregate by BVF, BVF2, BVLLC and ILL10. As
the investment adviser and general partner of Partners, BVF Inc. may be deemed
to beneficially own the 8,819,600 Shares beneficially owned by
Partners. Mr. Lampert, as a director and officer of BVF Inc. may be
deemed to beneficially own the 8,819,600 Shares beneficially owned by BFV
Inc.
None of
Messrs. Perry, Nodelman or Coppedge directly owns any Shares. As a
members of a “group” for the purposes of Rule 13d-5(b)(1) of the Securities
Exchange Act of 1934, as amended, each of Messrs. Perry, Nodelman and Coppedge
may be deemed to beneficially own the 8,819,600 Shares beneficially owned in the
aggregate by the other members of the BVF Group. Each of Messrs.
Perry, Nodelman and Coppedge disclaims beneficial ownership of such
Shares.
For
information regarding purchases and sales of securities of Avigen during the
past two years by members of the BVF Group, including the Nominees, see Schedule
I.
On
January 9, 2009, the members of the BVF Group entered into a Joint Filing and
Solicitation Agreement in which each member of the BVF Group agreed to the joint
filing on behalf of each of them of Statements on Schedule 13D with respect to
the securities of Avigen to the extent required under applicable securities laws
and to form a group for the purpose of soliciting proxies or written consents in
support of the election of the Nominees and certain other proposals at the
Special Meeting and for the purpose of taking all other actions incidental to
the foregoing. The BVF Group intends to seek reimbursement from
Avigen of all expenses it incurs in connection with this solicitation, to the
extent permitted by law. The BVF Group does not intend to submit the
question of such reimbursement to a vote of security holders of
Avigen.
Except as
set forth in this Proxy Statement (including the Schedules hereto), (i) during
the past 10 years, no participant in this solicitation has been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors); (ii)
no participant in this solicitation directly or indirectly beneficially owns any
securities of the Company; (iii) no participant in this solicitation owns any
securities of the Company which are owned of record but not beneficially; (iv)
no participant in this solicitation has purchased or sold any securities of the
Company during the past two years; (v) no part of the purchase price or market
value of the securities of the Company owned by any participant in this
solicitation is represented by funds borrowed or otherwise obtained for the
purpose of acquiring or holding such securities; (vi) no participant in this
solicitation is, or within the past year was, a party to any contract,
arrangements or understandings with any person with respect to any securities of
the Company, including, but not limited to, joint ventures, loan or option
arrangements, puts or calls, guarantees against loss or guarantees of profit,
division of losses or profits, or the giving or withholding of proxies; (vii) no
associate of any participant in this solicitation owns beneficially, directly or
indirectly, any securities of the Company; (viii) no participant in this
solicitation owns beneficially, directly or indirectly, any securities of any
parent or subsidiary of the Company; (ix) no participant in this solicitation or
any of his or its associates was a party to any transaction, or series of
similar transactions, since the beginning of the Company’s last fiscal year, or
is a party to any currently proposed transaction, or series of similar
transactions, to which the Company or any of its subsidiaries was or is to be a
party, in which the amount involved exceeds $120,000; (x) no participant in this
solicitation or any of his or its associates has any arrangement or
understanding with any person with respect to any future employment by the
Company or its affiliates, or with respect to any future transactions to which
the Company or any of its affiliates will or may be a party; and (xi) no
participant in this solicitation has a substantial interest, direct or indirect,
by securities holdings or otherwise in any matter to be acted on at the Special
Meeting. There are no material proceedings to which any participant
in this solicitation or any of his or its associates is a party adverse to the
Company or any of its subsidiaries or has a material interest adverse to the
Company or any of its subsidiaries. With respect to each of the
participant in this solicitation, none of the events enumerated in Item
401(f)(1)-(6) of Regulation S-K of the Exchange Act occurred during the past
five years.
OTHER
MATTERS AND ADDITIONAL INFORMATION
The BVF
Group is unaware of any other matters to be considered at the Special
Meeting. However, should other matters, which the BVF Group is not
aware of a reasonable time before this solicitation, be brought before the
Special Meeting, the persons named as proxies on the enclosed GOLD proxy card will vote on
such matters in their discretion.
STOCKHOLDER
PROPOSALS
To be
considered for inclusion in the 2009 Annual Meeting proxy materials, stockholder
proposals must be submitted in writing by December 25, 2008, to Avigen’s
Secretary at 1301 Harbor Bay Parkway, Alameda, California
94502. However, if Avigen’s 2009 Annual Meeting of Stockholders is
held before April 19, 2009 or after June 18, 2009, then the deadline will be a
reasonable time prior to the time the Company begins to print and mail its proxy
materials. If you wish to bring a proposal before the stockholders at next
year’s annual meeting that is not included in the Company’s proxy materials, you
must notify Avigen’s Secretary, in writing, not later than the close of business
on March 20, 2009 nor earlier than the close of business on February 18, 2009.
However, if Avigen’s 2009 Annual Meeting of Stockholders is held before April
19, 2009 or after June 18, 2009, stockholders must notify Avigen’s Secretary, in
writing, not earlier than 90 days and not later than the later of 60 days prior
to Avigen’s 2009 Annual Meeting of Stockholders or, if Avigen makes a public
announcement of the date of Avigen’s 2009 Annual Meeting of Stockholders fewer
than 70 days prior to the date of Avigen’s 2009 Annual Meeting of Stockholders,
then the close of business on the 10th day following the day on which the
Company makes such public announcement. We advise you to review the
Bylaws, which contain additional requirements about advance notice of
stockholder proposals and director nominations. If stockholders do
not comply with these requirements, they will not be able to make a stockholder
proposal or director nomination at the 2009 Annual Meeting.
The
information set forth above regarding the procedures for submitting stockholder
proposals for consideration at the 2009 Annual Meeting is based on information
contained in the Company’s proxy statement. The incorporation of this
information in this proxy statement should not be construed as an admission by
the BVF Group that such procedures are legal, valid or binding.
INCORPORATION
BY REFERENCE
The BVF
Group has omitted from this Proxy Statement certain disclosure required by
applicable law that is expected to be included in the Company’s proxy statement
relating to the Special Meeting. This disclosure is expected to
include, among other things, current biographical information on the Company’s
current directors, information concerning executive compensation, and other
important information. Although we do not have any knowledge
indicating that any statement made by the BVF Group herein is untrue, we do not
take any responsibility for the accuracy or completeness of statements taken
from public documents and records that were not prepared by or on our behalf, or
for any failure by Avigen to disclose events that may affect the significance or
accuracy of such information. See Schedule II for information
regarding persons who beneficially own more than 5% of the Shares and the
ownership of the Shares by the directors and management of Avigen.
The
information concerning Avigen contained in this Proxy Statement and the
Schedules attached hereto has been taken from, or is based upon, publicly
available information.
BIOTECHNOLOGY
VALUE FUND, L.P.
[_________],
2009
SCHEDULE
I
TRANSACTIONS
IN SECURITIES OF AVIGEN, INC.
DURING
THE PAST TWO YEARS
|
Biotechnology Value Fund,
L.P.
|
|
|
|
|
|
|
|
Sell
|
22,300
|
|
06/07/07
|
6.7507
|
|
Sell
|
600
|
|
06/08/07
|
6.8000
|
|
Sell
|
1,200
|
|
07/25/07
|
6.0002
|
|
Sell
|
20,700
|
|
08/07/07
|
5.9199
|
|
Sell
|
8,100
|
|
08/08/07
|
5.9055
|
|
Sell
|
1,400
|
|
08/09/07
|
5.9000
|
|
Sell
|
2,300
|
|
08/13/07
|
5.9173
|
|
Sell
|
2,600
|
|
08/27/07
|
5.7500
|
|
Sell
|
1,600
|
|
10/11/07
|
5.4167
|
|
Sell
|
400
|
|
10/12/07
|
5.3932
|
|
Sell
|
11,000
|
|
10/23/07
|
5.4395
|
|
Sell
|
58,400
|
|
10/24/07
|
5.4001
|
|
Sell
|
200
|
|
03/10/08
|
3.3370
|
|
Sell
|
1,000
|
|
04/07/08
|
2.5137
|
|
Sell
|
125,387
|
|
04/10/08
|
2.5000
|
|
Sell
|
10,000
|
|
05/05/08
|
3.4201
|
|
Sell
|
400
|
|
05/06/08
|
3.2660
|
|
Sell
|
700
|
|
07/31/08
|
3.5500
|
|
Sell
|
5,900
|
|
08/01/08
|
3.3568
|
|
Sell
|
1,800
|
|
08/04/08
|
3.3151
|
|
Sell
|
600
|
|
08/05/08
|
3.2500
|
|
Sell
|
2,100
|
|
08/06/08
|
3.3230
|
|
Sell
|
32,000
|
|
08/07/08
|
3.2501
|
|
Sell
|
100
|
|
08/08/08
|
3.4000
|
|
Sell
|
29,000
|
|
08/11/08
|
3.4807
|
|
Sell
|
8,400
|
|
08/13/08
|
3.4607
|
|
Sell
|
22,500
|
|
08/14/08
|
3.4923
|
|
Sell
|
600
|
|
08/15/08
|
3.6106
|
|
Sell
|
2,900
|
|
08/19/08
|
3.5023
|
|
Sell
|
1,500
|
|
08/20/08
|
3.5000
|
|
Sell
|
1,500
|
|
08/21/08
|
3.5501
|
|
Sell
|
75,600
|
|
08/28/08
|
3.9565
|
|
Sell
|
12,200
|
|
08/29/08
|
4.2484
|
|
Sell
|
23,000
|
|
09/04/08
|
4.3576
|
|
Sell
|
23,000
|
|
09/04/08
|
4.5195
|
|
Sell
|
3,600
|
|
09/05/08
|
4.5968
|
|
Sell
|
8,400
|
|
09/08/08
|
4.6000
|
|
Sell
|
1,600
|
|
09/19/08
|
4.4000
|
|
Sell
|
900
|
|
09/22/08
|
4.2500
|
|
Buy
|
226,000
|
|
10/21/08
|
0.5500
|
|
Buy
|
24,000
|
|
10/21/08
|
0.5500
|
|
Buy
|
1,583,000
|
|
10/21/08
|
0.5853
|
|
Buy
|
12,300
|
|
11/04/08
|
0.7365
|
|
Buy
|
21,100
|
|
11/06/08
|
0.7091
|
|
Buy
|
9,400
|
|
11/07/08
|
0.7245
|
|
Buy
|
34,400
|
|
11/10/08
|
0.7329
|
|
Buy
|
18,200
|
|
11/11/08
|
0.7365
|
|
Buy
|
19,000
|
|
11/12/08
|
0.7456
|
|
Buy
|
6,500
|
|
11/13/08
|
0.7478
|
|
Buy
|
9,700
|
|
11/18/08
|
0.7355
|
|
Buy
|
7,300
|
|
11/19/08
|
0.7494
|
|
|
|
|
|
|
|
Biotechnology Value Fund II,
L.P.
|
|
|
|
|
|
|
|
Sell
|
15,000
|
|
06/07/07
|
6.7507
|
|
Sell
|
1,000
|
|
07/25/07
|
6.0002
|
|
Sell
|
14,000
|
|
08/07/07
|
5.9199
|
|
Sell
|
5,000
|
|
08/08/07
|
5.9055
|
|
Sell
|
2,000
|
|
08/09/07
|
5.9000
|
|
Sell
|
1,000
|
|
08/13/07
|
5.9173
|
|
Sell
|
1,000
|
|
08/27/07
|
5.7500
|
|
Sell
|
1,000
|
|
10/11/07
|
5.4167
|
|
Sell
|
1,000
|
|
10/12/07
|
5.3932
|
|
Sell
|
8,000
|
|
10/23/07
|
5.4395
|
|
Sell
|
39,000
|
|
10/24/07
|
5.4001
|
|
Sell
|
71,900
|
|
04/10/08
|
2.5000
|
|
Sell
|
7,000
|
|
05/05/08
|
3.4201
|
|
Sell
|
3,000
|
|
08/01/08
|
3.3568
|
|
Sell
|
2,000
|
|
08/04/08
|
3.3151
|
|
Sell
|
1,000
|
|
08/05/08
|
3.2500
|
|
Sell
|
1,000
|
|
08/06/08
|
3.3230
|
|
Sell
|
22,000
|
|
08/07/08
|
3.2501
|
|
Sell
|
19,000
|
|
08/11/08
|
3.4807
|
|
Sell
|
6,000
|
|
08/13/08
|
3.4607
|
|
Sell
|
16,000
|
|
08/14/08
|
3.4923
|
|
Sell
|
2,000
|
|
08/19/08
|
3.5023
|
|
Sell
|
1,000
|
|
08/20/08
|
3.5000
|
|
Sell
|
1,000
|
|
08/21/08
|
3.5501
|
|
Sell
|
52,000
|
|
08/28/08
|
3.9565
|
|
Sell
|
9,000
|
|
08/29/08
|
4.2484
|
|
Sell
|
16,000
|
|
09/04/08
|
4.3576
|
|
Sell
|
16,000
|
|
09/04/08
|
4.5195
|
|
Sell
|
3,000
|
|
09/05/08
|
4.5968
|
|
Sell
|
5,000
|
|
09/08/08
|
4.6000
|
|
Sell
|
1,000
|
|
09/19/08
|
4.4000
|
|
Buy
|
156,000
|
|
10/21/08
|
0.5500
|
|
Buy
|
17,000
|
|
10/21/08
|
0.5500
|
|
Buy
|
1,092,000
|
|
10/21/08
|
0.5853
|
|
Buy
|
9,000
|
|
11/04/08
|
0.7365
|
|
Buy
|
14,000
|
|
11/06/08
|
0.7091
|
|
Buy
|
7,000
|
|
11/07/08
|
0.7245
|
|
Buy
|
24,000
|
|
11/10/08
|
0.7329
|
|
Buy
|
12,000
|
|
11/11/08
|
0.7365
|
|
Buy
|
14,000
|
|
11/12/08
|
0.7456
|
|
Buy
|
4,000
|
|
11/13/08
|
0.7478
|
|
Buy
|
7,000
|
|
11/18/08
|
0.7355
|
|
Buy
|
5,000
|
|
11/19/08
|
0.7494
|
|
|
|
|
|
|
|
BVF Inc.
|
|
|
|
|
|
|
|
Sell
|
58,000
|
|
06/07/07
|
6.7507
|
|
Sell
|
4,000
|
|
07/25/07
|
6.0002
|
|
Sell
|
56,000
|
|
08/07/07
|
5.9199
|
|
Sell
|
21,000
|
|
08/08/07
|
5.9055
|
|
Sell
|
6,000
|
|
08/09/07
|
5.9000
|
|
Sell
|
5,000
|
|
08/13/07
|
5.9173
|
|
Sell
|
4,000
|
|
08/27/07
|
5.7500
|
|
Sell
|
4,000
|
|
10/11/07
|
5.4167
|
|
Sell
|
3,000
|
|
10/12/07
|
5.3932
|
|
Sell
|
29,000
|
|
10/23/07
|
5.4395
|
|
Sell
|
152,000
|
|
10/24/07
|
5.4001
|
|
Sell
|
1,000
|
|
03/10/08
|
3.3370
|
|
Sell
|
2,000
|
|
04/07/08
|
2.5137
|
|
Sell
|
128,720
|
|
04/10/08
|
2.5000
|
|
Sell
|
24,000
|
|
05/05/08
|
3.4201
|
|
Sell
|
1,000
|
|
05/06/08
|
3.2660
|
|
Sell
|
12,000
|
|
08/01/08
|
3.3568
|
|
Sell
|
5,000
|
|
08/04/08
|
3.3151
|
|
Sell
|
2,000
|
|
08/05/08
|
3.2500
|
|
Sell
|
4,000
|
|
08/06/08
|
3.3230
|
|
Sell
|
76,000
|
|
08/07/08
|
3.2501
|
|
Sell
|
66,000
|
|
08/11/08
|
3.4807
|
|
Sell
|
1,000
|
|
08/12/08
|
3.4870
|
|
Sell
|
19,000
|
|
08/13/08
|
3.4607
|
|
Sell
|
55,000
|
|
08/14/08
|
3.4923
|
|
Sell
|
1,000
|
|
08/15/08
|
3.6106
|
|
Sell
|
7,000
|
|
08/19/08
|
3.5023
|
|
Sell
|
3,000
|
|
08/20/08
|
3.5000
|
|
Sell
|
3,000
|
|
08/21/08
|
3.5501
|
|
Sell
|
178,000
|
|
08/28/08
|
3.9565
|
|
Sell
|
30,000
|
|
08/29/08
|
4.2484
|
|
Sell
|
54,000
|
|
09/04/08
|
4.3576
|
|
Sell
|
54,000
|
|
09/04/08
|
4.5195
|
|
Sell
|
10,000
|
|
09/05/08
|
4.5968
|
|
Sell
|
19,000
|
|
09/08/08
|
4.6000
|
|
Sell
|
3,000
|
|
09/19/08
|
4.4000
|
|
Buy
|
560,000
|
|
10/21/08
|
0.5500
|
|
Buy
|
3,919,000
|
|
10/21/08
|
0.5853
|
|
Buy
|
59,000
|
|
10/21/08
|
0.5500
|
|
Buy
|
32,000
|
|
11/04/08
|
0.7365
|
|
Buy
|
52,000
|
|
11/06/08
|
0.7091
|
|
Buy
|
24,000
|
|
11/07/08
|
0.7245
|
|
Buy
|
87,000
|
|
11/10/08
|
0.7329
|
|
Buy
|
45,000
|
|
11/11/08
|
0.7365
|
|
Buy
|
49,000
|
|
11/12/08
|
0.7456
|
|
Buy
|
16,000
|
|
11/13/08
|
0.7478
|
|
Buy
|
24,000
|
|
11/18/08
|
0.7355
|
|
Buy
|
18,000
|
|
11/19/08
|
0.7494
|
|
|
|
|
|
|
|
Investment 10, L.L.C.
|
|
|
|
|
|
|
|
Sell
|
6,000
|
|
06/07/07
|
6.7507
|
|
Sell
|
6,000
|
|
08/07/07
|
5.9200
|
|
Sell
|
2,000
|
|
08/08/07
|
5.9055
|
|
Sell
|
1,000
|
|
08/09/07
|
5.9000
|
|
Sell
|
1,000
|
|
08/13/07
|
5.9173
|
|
Sell
|
3,000
|
|
10/23/07
|
5.4395
|
|
Sell
|
17,000
|
|
10/24/07
|
5.4001
|
|
Sell
|
16,630
|
|
04/10/08
|
2.5000
|
|
Sell
|
3,000
|
|
05/05/08
|
3.4201
|
|
Sell
|
1,000
|
|
08/01/08
|
3.3568
|
|
Sell
|
1,000
|
|
08/04/08
|
3.3151
|
|
Sell
|
10,000
|
|
08/07/08
|
3.2501
|
|
Sell
|
8,000
|
|
08/11/08
|
3.4807
|
|
Sell
|
2,000
|
|
08/13/08
|
3.4607
|
|
Sell
|
7,000
|
|
08/14/08
|
3.4923
|
|
Sell
|
1,000
|
|
08/19/08
|
3.5023
|
|
Sell
|
22,000
|
|
08/28/08
|
3.9565
|
|
Sell
|
4,000
|
|
08/29/08
|
4.2484
|
|
Sell
|
7,000
|
|
09/04/08
|
4.3576
|
|
Sell
|
7,000
|
|
09/04/08
|
4.5195
|
|
Sell
|
1,000
|
|
09/05/08
|
4.5968
|
|
Sell
|
2,000
|
|
09/08/08
|
4.6000
|
|
Buy
|
58,000
|
|
10/21/08
|
0.5500
|
|
Buy
|
406,000
|
|
10/21/08
|
0.5853
|
|
Buy
|
6,000
|
|
10/21/08
|
0.5500
|
|
Buy
|
3,000
|
|
11/04/08
|
0.7365
|
|
Buy
|
5,000
|
|
11/06/08
|
0.7091
|
|
Buy
|
3,000
|
|
11/07/08
|
0.7245
|
|
Buy
|
9,000
|
|
11/10/08
|
0.7329
|
|
Buy
|
5,000
|
|
11/11/08
|
0.7365
|
|
Buy
|
5,000
|
|
11/12/08
|
0.7456
|
|
Buy
|
2,000
|
|
11/13/08
|
0.7478
|
|
Buy
|
3,000
|
|
11/18/08
|
0.7355
|
|
Buy
|
2,000
|
|
11/19/08
|
0.7494
|
|
|
|
|
|
|
|
BVF Partners L.P.
|
|
|
|
|
|
|
None
|
|
|
|
|
|
|
BVF Inc.
|
|
|
|
|
|
|
None
|
|
|
|
|
|
|
Mark N. Lampert
|
|
|
|
|
|
|
None
|
|
|
|
|
|
|
Matthew D. Perry
|
|
|
|
|
|
|
None
|
|
|
|
|
|
|
Oleg Nodelman
|
|
|
|
|
|
|
None
|
| |
|
Robert M. Coppedge
|
|
|
|
|
|
|
None
|
|
|
|
|
|
SCHEDULE
II
The
following table is reprinted from the Company’s Definitive Proxy Statement on
Schedule 14A filed with the Securities and Exchange Commission on April 24,
2008, except as otherwise indicated.
The
following table sets forth certain information regarding the ownership of
Avigen’s common stock as of March 15, 2008, unless otherwise indicated, by: (1)
each director and nominee for director; (2) each of the executive officers named
in the Summary Compensation Table; (3) all executive officers and directors of
Avigen as a group; and (4) all those known by Avigen to be beneficial owners of
more than five percent of its common stock.
|
|
|
Beneficial
Ownership (1)
|
|
Beneficial
Owner
|
|
Number of
Shares
|
|
Percent of
Total
|
|
Kenneth Chahine, J.D., Ph.D.
(2)
|
|
|
654,316
|
|
|
|
2.15
|
%
|
|
Andrew Sauter
(3)
|
|
|
200,567
|
|
|
|
*
|
|
|
Michael Coffee
(2)
|
|
|
237,254
|
|
|
|
*
|
|
|
Kirk Johnson, Ph.D.
(2)
|
|
|
241,394
|
|
|
|
*
|
|
|
M. Christina Thomson, J.D.
(2)
|
|
|
262,416
|
|
|
|
*
|
|
|
Stephen Dilly, M.B.B.S., Ph.D.
(2)
|
|
|
9,900
|
|
|
|
*
|
|
|
Zola Horovitz, Ph.D.
(4)
|
|
|
110,800
|
|
|
|
*
|
|
|
Jan Öhrström, M.D.
(2)
|
|
|
9,900
|
|
|
|
*
|
|
|
John Prendergast, Ph.D.
(5)
|
|
|
129,908
|
|
|
|
*
|
|
|
Richard Wallace
(2)
|
|
|
21,750
|
|
|
|
*
|
|
|
All executive officers and
directors as a group (11 persons) (6)
|
|
|
1,878,205
|
|
|
|
6.31
|
%
|
|
|
|
|
|
|
|
|
|
|
|
5%
Stockholders
|
|
|
|
|
|
|
|
|
|
BVF Inc.
(7)
|
|
|
8,819,600
|
|
|
|
29.63
|
%
|
|
900 North Michigan Avenue, Suite
1100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Davidson Kempner Partners
(8)
|
|
|
2,651,430
|
|
|
|
8.91
|
%
|
|
65 East 55th Street, 19th
Floor
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HealthCor Management, L.P.
(9)
|
|
|
1,950,000
|
|
|
|
6.55
|
%
|
|
Carnegie Hall Tower, 152 West
57th Street, 47th Floor
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
____________________
|
*
|
Less
than one percent.
|
|
|
|
|
(1)
|
This
table is based upon information supplied by officers, directors and
principal stockholders and Schedules 13G filed with the SEC. Unless
otherwise indicated in the footnotes to this table and subject to
community property laws where applicable, Avigen believes that each of the
stockholders named in this table has sole voting and investment power with
respect to the shares indicated as beneficially owned. Applicable
percentages are based on 29,769,115 shares outstanding on November 13,
2008, adjusted as required by rules promulgated by the SEC. Unless
otherwise indicated, the address of each of the individuals and entities
listed in this table 1301 Harbor Bay Parkway, Alameda, California
94502.
|
|
(2)
|
Consists
solely of shares issuable upon the exercise of options that are
exercisable within 60 days of the date of this table.
|
|
(3)
|
Includes
196,442 shares issuable upon the exercise of options held by Mr. Sauter
that are exercisable within 60 days of the date of this
table.
|
|
(4)
|
Includes
105,800 shares issuable upon the exercise of options held by Dr. Horovitz
that are exercisable within 60 days of the date of this
table.
|
|
(5)
|
Based
upon a Form 4 filed with the SEC on August 15, 2008 by Mr. Prendergast and
includes 90,800 shares issuable upon the exercise of options held by Dr.
Prendergast that are exercisable within 60 days of the date of this
table. The Form 4 updates information found in the Company’s
2008 proxy statement.
|
|
(6)
|
Includes
an aggregate of 1,829,972 shares issuable upon exercise of options which
executive officers and directors of Avigen have the right to acquire
within 60 days of the date of this table.
|
|
(7)
|
Based
upon a Schedule 13D/A filed with the SEC on January 12, 2009 by BVF and
includes shares owned by the following affiliated entities: (a) BVF
1,975,340 shares; (b) BVF2 1,364,911 shares; (c) BVLLC 4,969,764 shares;
and (d) ILL10 509,585 shares. BVF, Inc., Partners and Mark Lampert
beneficially own 8,819,600 aggregate shares. This Schedule
13D/A updates information found in the Company’s 2008 Proxy
Statement.
|
|
(8)
|
Based
upon a Schedule 13G/A filed with the SEC on February 14, 2008 by Davidson
Kempner Partners and includes shares owned by the following entities
affiliated with Davidson Kempner Partners (the “DKP Shares”): (a) Davidson
Kempner International, Ltd. 481,032 shares; (b) Serena Limited 11,271
shares; (c) Davidson Kempner Institutional Partners, L.P. 290,142 shares;
(d) Davidson Kempner Partners 152,913 shares; (e) Davidson Kempner
Healthcare Fund LP 805,316 shares; (f) Davidson Kempner Healthcare
International Ltd. 887,859 shares; and (g) M. H. Davidson & Co. 22,897
shares. The DKP Shares, an aggregate 2,651,430 shares, are beneficially
owned by Messrs. Thomas L. Kempner, Jr., Marvin H. Davidson, Stephen M.
Dowicz, Scott E. Davidson, Michael J. Leffell, Timothy I. Levart, Robert
J. Brivio, Jr., Anthony A. Yoseloff, Eric P. Epstein and Avram Z.
Friedman. The Schedule 13G/A provides information only as of December 31,
2007 and, consequently, DKP’s beneficial ownership of Avigen’s common
stock may have changed between December 31, 2007 and January 12,
2009. The Schedule 13G/A updates information found in the
Company’s 2008 proxy statement.
|
|
(9)
|
Based
upon a Schedule 13G/A filed with the SEC on May 14, 2008 by HealthCor
Management, L.P. and includes shares owned by the following entities
affiliated with HealthCor Management, L.P. (the “HCM Shares”): (a)
HealthCor Management, L.P. 1,950,000 shares; (b) HealthCor Asssociates,
LLC 1,950,000 shares; (c) HealthCor Offshore, Ltd. 1,287,011 shares; (d)
HealthCor Hybrid Offshore, Ltd. 289,875 shares; (e) HealthCor Group, LLC
373,114 shares; (f) HealthCor Capital, L.P. 373,114 shares; and (g)
HealthCor, L.P. 373,114 shares. The HCM Shares, an aggregate 1,950,000
shares, are beneficially owned by Messrs. Arthur Cohen and Joseph Healey.
The Schedule 13G/A provides information only as of May 14, 2008 and,
consequently, HealthCor Management, L.P.’s beneficial ownership of
Avigen’s common stock may have changed between December May 14, 2008 and
January 12, 2009.
|
IMPORTANT
Tell your
Board what you think! Your vote is important. No matter how many
Shares you own, please give the Committee your proxy FOR the proposal to remove all
of the existing directors serving on the Board, FOR the proposal to amend the
Bylaws to permit stockholders to elect directors to the Board in cases when the
entire Board is vacant, FOR the proposal to elect the
Nominees and FOR the
Bylaw Restoration Proposal by taking three steps:
● SIGNING the enclosed GOLD proxy card,
● DATING the enclosed GOLD proxy card,
and
● MAILING the enclosed GOLD proxy card TODAY in the envelope provided
(no postage is required if mailed in the United
States).
If any of
your Shares are held in the name of a brokerage firm, bank, bank nominee or
other institution, only it can vote such Shares and only upon receipt of your
specific instructions. Accordingly, please contact the person
responsible for your account and instruct that person to execute the GOLD proxy card representing
your Shares. The BVF Group urges you to confirm in writing your
instructions to the BVF Group in care of MacKenzie Partners, Inc. at the address
provided below so that the BVF Group will be aware of all instructions given and
can attempt to ensure that such instructions are followed.
If you
have any questions or require any additional information concerning this Proxy
Statement, please contact MacKenzie Partners, Inc. at the address set forth
below.
105
Madison Avenue
(212)
929-5500 (Call Collect)
or
CALL
TOLL FREE (800) 322-2885
PRELIMINARY
COPY SUBJECT TO COMPLETION
DATED
JANUARY __, 2009
AVIGEN,
INC.
SPECIAL
MEETING OF STOCKHOLDERS
THIS
PROXY IS SOLICITED ON BEHALF OF
BIOTECHNOLOGY
VALUE FUND, L.P.
THE
BOARD OF DIRECTORS OF AVIGEN, INC.
IS
NOT SOLICITING THIS PROXY
P R O X Y
The
undersigned appoints [Mark N. Lampert] and [Oleg Nodelman], and each of them,
attorneys and agents with full power of substitution to vote all shares of
common stock of Avigen, Inc. (the “Company”) which the undersigned owned and
would be entitled to vote if personally present at the Special Meeting of the
stockholders of the Company, and including at any adjournments or postponements
thereof and at any meeting called in lieu thereof (the “Special Meeting”), or
any meeting of stockholders that may be ordered by the Delaware Court of
Chancery or a court of comparable jurisdiction at which the directors nominated
by Biotechnology Value Fund, L.P. (“BVF”) and set forth on the reverse will be
nominated for election to the Board of Directors, including the proposals set
forth on the reverse, as set forth in the Notice of Special Meeting of
Stockholders and Proxy Statement filed by BVF and certain of its affiliates (the
“BVF Group”) with the Securities and Exchange Commission with respect to the
Special Meeting.
The
undersigned hereby revokes any other proxy or proxies heretofore given to vote
or act with respect to the shares of common stock of the Company held by the
undersigned, and hereby ratifies and confirms all action the herein named
attorneys and proxies, their substitutes, or any of them may lawfully take by
virtue hereof.
IF
NO DIRECTION IS INDICATED WITH RESPECT TO THE PROPOSALS ON THE REVERSE, THIS
PROXY WILL BE VOTED “FOR” ALL PROPOSALS.
IMPORTANT:
PLEASE SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY!
CONTINUED
AND TO BE SIGNED ON REVERSE SIDE
GOLD
PROXY CARD
BVF
RECOMMENDS A VOTE “FOR” THE PROPOSALS LISTED BELOW
[X] Please mark vote as in this
example
|
1.
|
The
BVF Group’s proposal to remove all of the existing directors serving on
the Company’s Board of Directors without
cause.
|
|
|
FOR
|
AGAINST
|
ABSTAIN
|
|
|
[ ]
|
[ ]
|
[ ]
|
|
2.
|
The
BVF Group’s proposal to amend the Company’s Amended and Restated Bylaws
(the “Bylaws”) to permit stockholders to elect directors to the Board in
cases when the entire Board is
vacant.
|
|
|
FOR
|
AGAINST
|
ABSTAIN
|
|
|
[ ]
|
[ ]
|
[ ]
|
|
3.
|
The
BVF Group’s proposal to elect its slate of director nominees to the
Company’s Board of Directors.
|
|
NOMINEE
|
FOR
NOMINEE
|
WITHHOLD
AUTHORITY
TO
VOTE FOR NOMINEE
|
|
Class
I Director:
(a)
Mark N. Lampert
|
[ ]
|
[ ]
|
|
|
|
|
|
Class
II Director:
(b)
Robert M. Coppedge
|
[ ]
|
[ ]
|
|
|
|
|
|
Class
III Director:
(c)
Matthew D. Perry
|
[ ]
|
[ ]
|
|
|
|
|
|
Class
III Director:
(d)
Oleg Nodelman
|
[ ]
|
[ ]
|
|
4.
|
The
BVF Group’s proposal to repeal any provision to the Bylaws that were
effected between January 8, 2009, the date prior to the date the BVF Group
submitted its request to the Company to call the Special Meeting, and the
time this proposal becomes
effective.
|
|
|
FOR
|
AGAINST
|
ABSTAIN
|
|
|
[ ]
|
[ ]
|
[ ]
|
Proposal
No. 3 is subject to the effectiveness of Proposal No. 1.
DATED: ____________________________
____________________________________
(Signature)
____________________________________
(Signature,
if held jointly)
____________________________________
(Title)
WHEN SHARES
ARE
HELD JOINTLY, JOINT OWNERS SHOULD EACH
SIGN. EXECUTORS, ADMINISTRATORS, TRUSTEES, ETC.,
SHOULD INDICATE THE CAPACITY IN WHICH SIGNING. PLEASE SIGN EXACTLY AS
NAME APPEARS ON THIS PROXY.
