Maxygen’s board has agreed to liquidate and dissolve the struggling protein pharmaceuticals developer, touching off a change in its top executive, while setting the stage for a distribution of all available cash to shareholders.
The company said James Sulat will resign as CEO and CFO, and give up his seat on Maxygen’s board, on June 30. Sulat will be succeeded by Isaac Stein, the board’s executive chairman.
If the dissolution plan is approved by shareholders, Maxygen would file a certificate of dissolution with the Delaware Secretary of State and delist its shares from NASDAQ. The company estimated it will initially reserve between $9 million and $10.4 million to pay all operating expenses and other known noncontingent liabilities—as well as set aside $2.5 million toward a reserve for any contingent and unknown liabilities, required by Delaware law.
Maxygen estimated it will distribute to shareholders its remaining cash, which it estimated at between $68.2 million and $69.6 million—between $2.45 to $2.50 per share—based on 27,792,520 shares of common stock outstanding as of May 31.
The dissolution plan comes a month after the company reported a drop in first-quarter net loss compared with a year ago, to $2.1 million from nearly $2.6 million in Q1 2012. Maxygen has no significant recurring revenues, and generated only half the Q1 technology and license revenue it made in the year-ago quarter, $3,000 vs. $6,000.
Maxygen has long struggled to develop its drug candidate MAXY-G34, a pegylated, granulocyte colony-stimulating factor for chemotherapy-induced neutropenia and acute radiation syndrome. The company retains rights to the drug candidate, and said in a statement it will “continue to focus on creating value from this program for our stockholders, principally through a sale or other transaction.”
In recent years, most of Maxygen’s activity has focused on sales, distributions, and other arrangements it said generated more than $250 million in cash and property to shareholders since 2009.
The company distributed about $100 million cash last September, four months after receiving a final $30 million from Bayer HealthCare in return for selling a recombinant factor VIIa product candidate (formerly MAXY-VII) and other hematology assets in 2008 for $90 million. Maxygen also gained $76 million when it sold its interest in Perseid Therapeutics to Astellas Pharma, but spent $67.9 million to repurchase about 12.5 million shares of its stock.
“While the company’s board and management devoted substantial time and effort in identifying and pursuing additional opportunities to further enhance shareholder value, the board has now reached the conclusion that it is in the best interest of the company and its shareholders to dissolve the company,” Stein said in a statement.