Vaxart, Inc. · OTC:VXRT
Vaxart — Aviragen Therapeutics — Proxy Contest (January 2018)
21 slides from Vaxart's proxy contest presentation, Jan 23, 2018
Slide 1: Save Aviragen Therapeutics: Vote Against the Merger with Vaxart
Save Aviragen Therapeutics VOTE AGAINST THE MERGER WITH VAXART January 2018 East Hill Management & Digirad Corporation
Slide 2: Disclaimer
Disclaimer THIS PRESENTATION IS FOR DISCUSSION AND GENERAL INFORMATIONAL PURPOSES ONLY. IT DOES NOT HAVE REGARD TO THE SPECIFIC INVESTMENT OBJECTIVE, FINANCIAL SITUATION, SUITABILITY, OR THE PARTICULAR NEED OF ANY SPECIFIC PERSON WHO MAY RECEIVE THIS PRESENTATION, AND SHOULD NOT BE TAKEN AS ADVICE O
Slide 3: What Is Wrong with Aviragen – Vaxart Merger?
What Is Wrong with Aviragen – Vaxart Merger? Rejection of Cash Offer Management/Board/Advisor have incentives to close the merger Vaxart is a financially weak merger partner Stifel’s valuation analysis is both incorrect and shallow Vaxart’s drug candidates are extremely expensive and risky to develo
Slide 4: Who We Are
Who We Are The Concerned Aviragen Shareholders Group (CAS Group) Digirad Corporation, East Hill Management Company, LLC, and Thomas M. Clay and certain other participants in this solicitation (the “Concerned Aviragen Shareholders Group”, the “CAS Group”, “we”, or “us”), are significant stockholders
Slide 5: Rejection of Cash Offer
Reason 1. Rejection of Cash Offer We believe the current Board of Directors of Aviragen (the “Board”) rejected a nonbinding offer from a “Party F” to acquire Aviragen for $0.84 cash and contingent value rights payable on approval of any Aviragen program by the FDA. Standstill: The Board refused to n
Slide 6: Senior Management & Stifel Are Highly Incentivized to Close the Deal
Reason 2. We Believe Senior Management & Stifel are Highly Incentivized to Close the Deal #1 As per their employment agreements, the CEO and CFO would receive $1,077,196 and $556,439 respectively if the Merger was consummated. #2 As per its engagement agreement, the Company’s financial advisor, Stif
Slide 7: Vaxart is a Financially Weak Merger Partner
Reason 3. We Believe Vaxart is a Financially Weak Merger Partner Vaxart faces going concern issue: Vaxart’s auditor has expressed substantial doubt about Vaxart’s ability to continue as a going concern due to net capital deficiency and recurring losses from operations. At current burn rate, Vaxart w
Slide 8: Supporting data: Vaxart, Opinion of audit firm
Supporting data: Vaxart, Opinion of audit firm Consent of Independent Auditors The Board of Directors Vaxart, Inc.: We consent to the use of our report dated August 4, 2017, with respect to the consolidated balance sheets of Vaxart, Inc. as of December 31, 2016 and 2015, and the related consolidated
Slide 9: Valuation analysis by Aviragen's Financial Advisor is flawed
Reason 4. We believe the valuation analysis by Aviragen’s Financial Advisor is flawed Vaxart’s value was inflated as a result of including companies with advanced clinical programs, especially for cancer Problems in Even though Vaxart’s clinical-stage programs are limited to norovirus (Phase 1) and
Slide 10: Valuation analysis by Aviragen's Financial Advisor is flawed (cont'd.)
Reason 4. We believe the valuation analysis by Aviragen’s Financial Advisor is flawed (cont’d.) Vaxart is nothing like the comparable companies selected by Stifel. It has one infectious disease program in Phase 2 and one infectious disease program in Phase 1. Stifel compared Vaxart to companies with
Slide 11: Valuation analysis by Aviragen's Financial Advisor is flawed (cont'd.)
Reason 4. We believe the valuation analysis by Aviragen’s Financial Advisor is flawed (cont’d.) Favouritism: Problems in • We noticed that Stifel’s criteria for picking “precedent transactions” are very restrictive for Aviragen, Selected whereas they are significantly less restrictive for Vaxart. Pr
Slide 12: Valuation analysis by Aviragen's Financial Advisor is flawed (cont'd.)
Reason 4. We believe the valuation analysis by Aviragen’s Financial Advisor is flawed (cont’d.) Problems in The liquidation and status quo valuations presented in the Aviragen Merger Proxy Statement are unrealistic, liquidation inconsistent, and understated leading to overstate and embellish the att
Slide 13: Valuation analysis by Aviragen's Financial Advisor is flawed (cont'd.)
Reason 4. We believe the valuation analysis by Aviragen’s Financial Advisor is flawed (cont’d.) Negotiated value with Vaxart: Aviragen negotiated a $60 million value ($1.55 per share) in its merger agreement with Vaxart. We believe that much of that value was derived from easily-valued financial ass
Slide 14: Development of Vaxart's drug candidates will be risky, time-consuming, and expensive
Reason 5. We Believe Development of Vaxart’s drug candidates will be risky, time-consuming, and expensive Novel adjuvants require enormously long, expensive trials: Novel adjuvants demand extensive study since vaccines are typically administered to healthy populations (infants, children, and the eld
Slide 15: Vaxart's decision to move production in-house adds execution risk
Reason We Believe Vaxart’s recent decision to move production in-house adds immediate 6. execution risk Terminating relationship with Lonza Based on our review of the Aviragen Merger Proxy Statement, Vaxart has been primarily working with Lonza, a major contract manufacturing organisation (CMO), for
Slide 16: Synergy: Neither Described nor Quantified
Reason 7. Synergy: Neither Described nor Quantified Although the Aviragen Merger Proxy Statement noted that Aviragen shareholders would benefit from “operational synergies” between Aviragen and Vaxart, management has neither described the nature of the synergies nor made any attempt to quantify them
Slide 17: Changes in Corporate Governance
Reason 8. Changes in Corporate Governance Significant control Following the closing of the merger, executive officers and directors of the combined company are expected to beneficially control approximately 51.2% of the outstanding shares of the combined company common stock. Board and management co
Slide 18: Price movement indicates shareholders disapprove of the proposed merger
Reason We Believe Price movement indicates that shareholders disapprove of the 9. proposed merger deals and support CAS group’s agenda Market has a negative view of the proposed Merger: Aviragen’s share price dropped 18% upon announcement of the proposed Merger and dropped by over 36% within 10 trad
Slide 19: Management team of Vaxart is not credible or proven
Reason 10. We Believe Management team of Vaxart is not credible or proven Trinity Biosystems, Inc., a biopharmaceutical company, was led by the current CEO of Vaxart, Dr. Latour (2005-2009) and the CFO of Vaxart, Mr. Harland (2008-2010). As per public documents, the company’s secured creditor forced
Slide 20: The CAS Group Urges You to Vote the Blue Proxy Card
THE CAS GROUP URGES YOU TO VOTE THE BLUE PROXY CARD (1) “AGAINST” THE STOCK ISSUANCE PROPOSAL, (2) “AGAINST” THE REVERSE STOCK SPLIT PROPOSAL, (3) “AGAINST” THE EXECUTIVE MERGER COMPENSATION PROPOSAL, (4) “ONCE EVERY YEAR” WITH RESPECT TO THE SAY-ON-PAY FREQUENCY PROPOSAL AND (5) “AGAINST” THE ADJOU
Slide 21: Contact Information
Contact Information InvestorCom, Inc. John G. Grau 65 Locust Avenue, Suite 302 New Canaan, CT 06840 Shareholders call toll free at (877) 972-0090 Banks and Brokers may call collect at (203) 972-9300