Affymax Board Announces Decision to Dissolve the Company
Affymax, Inc., a biopharmaceutical company, announced that its Board of Directors has approved the liquidation and dissolution of the company, subject to stockholder approval, and plans to distribute all available cash to its stockholders as soon as legally permitted and reasonably practicable after paying or making reasonable provision for all known and potential liabilities and other obligations of the Company. Based on the information the Company currently has available, which is subject to change, the Company estimates that the aggregate amount of the distribution to stockholders could be a few cents per share, based on 37,490,095 shares of common stock outstanding as of April 30, 2014 and the remaining cash of approximately $4 million as of May 2014.
Plan of Liquidation and Dissolution
The Company's Board of Directors has approved a plan of liquidation and dissolution of the Company, which is subject to stockholder approval. The Company intends to call a meeting of its stockholders to seek approval of the dissolution and will file proxy materials with the Securities and Exchange Commission as soon as practicable.
This decision follows the recent joint announcement by the Company and Takeda Pharmaceutical Company Limited (Takeda) that Takeda has completed a detailed investigation of the postmarketing reports of serious hypersensitivity reactions including anaphylaxis, which may be life-threatening or fatal. As announced, Takeda confirmed that no quality or manufacturing issues were present, but it was not able to identify a specific root cause for the reactions that were observed. In light of these findings, OMONTYS would not be permitted to be returned to the market and Takeda is working with the FDA to withdraw approval. Based on this outcome, the Board has determined it to be in the best interests of the stockholders to dissolve the Company.
The plan of liquidation and dissolution contemplates an orderly wind down of the Company's remaining business and operations. If the Company's stockholders approve the dissolution, the Company intends to file a certificate of dissolution with the Delaware Secretary of State, satisfy or resolve its remaining liabilities and obligations, including but not limited to contingent liabilities and claims, lease obligations, and costs associated with the liquidation and dissolution, and make distributions to its stockholders of cash available for distribution, subject to applicable legal requirements. In order to conserve its available resources and assets, the Company plans to seek relief from certain of its reporting obligations under the Securities Exchange Act of 1934, as amended and, upon the filing of the certificate of dissolution, the Company also intends to cease trading in its stock on the public markets, close its stock transfer books and discontinue recording transfers of shares of its stock.
Subject to claims that may be presented to the Company as part of the dissolution process, the Company currently estimates that it will maintain an initial reserve for any contingent and unknown obligations and liabilities, in accordance with applicable law until the resolution of such matters. Any remaining cash is expected to be distributed to stockholders as soon as reasonably practicable and permitted by applicable law. The amount distributable to stockholders, however, may vary substantially from the amount estimated above based on a number of factors, including the resolution of outstanding known and contingent liabilities, the possible assertion of claims currently unknown to the Company, and costs incurred to wind down the Company's business. If additional amounts are ultimately determined to be necessary to satisfy any of these obligations, stockholders may receive no distributions or amounts substantially less than the Company’s current estimate.
If, prior to its dissolution, the Company receives an offer for a transaction that will, in the view of the Board, provide superior value to stockholders compared to the value of the estimated distributions under the plan of liquidation and dissolution, taking into account all factors that could affect valuation, including timing and certainty of payment and closing, and proposed terms and other factors, the plan of liquidation and dissolution could be abandoned in favor of such a transaction.
The plan of liquidation also provides for an alternative procedure in the event that the Company’s Board later determines that an assignment for the benefit of creditors under applicable state law would be preferable to dissolution. In seeking stockholder approval of the dissolution, the Company will also seek stockholder approval of the alternative procedure of an assignment for the benefit of creditors.