Basilea's Board proposes Martin Nicklasson to succeed Chairman Werner Henrich and recommends to shareholders that they do not support the request for a capital distribution at this time
March 7, 2013 - Basel, Switzerland
Basilea Pharmaceutica AG /Basilea's Board proposes Martin Nicklasson to succeed Chairman WernerHenrichand recommends to shareholders that they do not support the request for acapital distribution at this time. Processed and transmitted by Thomson Reuters ONE.The issuer is solely responsible for the content of this announcement.
Basilea Pharmaceutica Ltd. (SIX: BSLN)released today the agenda for its April 9, 2013 Annual General Meeting(AGM).
The Basilea Board of Directors proposes Dr. Martin Nicklasson as designatednon-executive Chairman of the Board of Directors to succeed Werner Henrichwhoseterm will end at the upcoming AGM. Mr. Henrich will not stand forre-election as he will reach the statutory age limit for board members in2013.
Dr. Martin Nicklasson proposed for election to the Basilea Board ofDirectors
Dr. Nicklasson is a high-profile pharmaceutical business professional withlongstanding operational and board experience. He was born in 1955, is aSwedishcitizen and holds a PhD in pharmaceutical technology from the University ofUppsala, Sweden. He is Associate Professor at the Department ofPharmaceutics,University of Uppsala. Dr. Nicklasson has held numerous leadership andexecutivepositions in commercial operations and drug development at AstraZenecaPlc.,including as a member of its Executive Committee. He was the President andCEOof Biovitrum AB and Swedish Orphan Biovitrum AB, one of Europe's largestspecialty pharma companies focusing on rare diseases. Dr. Nicklasson servesas amember on the boards of a number of biotech companies in Europe and theUSA.
Immediate capital distribution considered not to be prudent
HBM Healthcare Investments (Cayman) Ltd. has requested that Basilea includeaproposal on the upcoming AGM agenda to distribute to its shareholders CHF5.00per share for a total of approximately CHF 48 million from capitalcontributionreserves. Basilea's Board of Directors recommends that shareholders do notsupport the proposal at this time.
The Board supports a capital distribution to shareholders in principal butconsiders the proposed timing not to be prudent given the significantmilestonesahead for the Company this year and the need for financial flexibility toallowthe Board and Management to optimize the value of the Company for allshareholders:
* First phase 3 results of isavuconazole for the treatment oflife-threatening fungal infections in transplant and cancer patients are expected in the second half of 2013. If Basilea reaches its isavuconazole developmentand regulatory milestones it is eligible for milestone payments, however,the vast majority of the milestones are not anticipated in the short term.
* Ceftobiprole may be granted a marketing authorization in Europe for the treatment of severe pneumonia in the hospital. The Company is aiming at partnering the drug to optimize its commercial value worldwide,including emerging markets such as China. Having less funds available would makeit more difficult for Basilea to implement certain partnering structuresthat could maximize the value of ceftobiprole.
* Phase 1 results of the innovative antibiotic BAL30072 to treatmultidrug-resistant Gram-negative infections and of the cancer compoundBAL101553 for the treatment of resistant tumors are anticipated to be available. Bothdrug candidates are unique and highly differentiated from current therapiesand other drugs in development. Paying out cash now may deprive the Companyof financial resources to appropriately fund its early-stage pipeline,which is the basis for continued value creation and growth, and may lead todelays or even discontinuation of promising projects.
Financial flexibility needed to achieve milestones and create value for allshareholders
A distribution of capital at this time may unduly limit the flexibility ofBasilea to achieve its critical milestones. These milestones may betransformational for the Company on its path to reach sustainedprofitability.
The Board and Management have successfully repositioned the Company andcreatedvalue through transactions as demonstrated through its most recentToctino®transaction. The Company will continue to seek partnerships, specificallyforceftobiprole and its phase 1 drug candidates, to optimize the value of itsdrugcandidates. It believes that it can continue to create value with thecapital ithas raised through this and other transactions and limiting thisflexibilitycould force the Company into less attractive deal structures with lessvalueretained for all shareholders.
Basilea is focused on achieving its milestones in 2013. Further, theCompany isstringently managing its financial resources to achieve these milestonesthat,if achieved, can create significant value for the Company and all of itsshareholders.
The full AGM agenda is included below and will be duly published in theSwissOfficial Gazette of Commerce. It is also available onhttp://www.basilea.com/Investor-Relations/Investors-calendar.
Indicatively, if HBM's proposal is approved, payment would be made on June21, 2013. The last trading day with entitlement to participate in thedistribution would be April 10, 2013. As from the ex-date of April 11,2013,shares would be traded without the right to participate in thedistribution.
About Basilea
Basilea Pharmaceutica Ltd. is headquartered in Basel, Switzerland, andlisted onthe SIX Swiss Exchange (SIX: BSLN). Through the fully integrated researchanddevelopment operations of its Swiss subsidiary Basilea PharmaceuticaInternational Ltd., the Company focuses on innovative pharmaceuticalproducts inthe therapeutic areas of bacterial infections, fungal infections andoncology,targeting the medical challenge of rising resistance and non-response tocurrenttreatment options.
Disclaimer
This communication expressly or implicitly contains certain forward-lookingstatements concerning Basilea Pharmaceutica Ltd. and its business. Suchstatements involve certain known and unknown risks, uncertainties and otherfactors, which could cause the actual results, financial condition,performanceor achievements of Basilea Pharmaceutica Ltd. to be materially differentfromany future results, performance or achievements expressed or implied bysuchforward-looking statements. Basilea Pharmaceutica Ltd. is providing thiscommunication as of this date and does not undertake to update anyforward-looking statements contained herein as a result of new information,futureevents or otherwise.
This press release can be downloaded from www.basilea.com.
Invitation to the 2013 Ordinary General Meeting of Shareholders
Basel, March 7, 2013
Dear Shareholder,
We invite you to the 2013 ordinary general meeting of shareholders ofBasileaPharmaceutica Ltd. ("Basilea" or "the Company") to be held on Tuesday,April9, 2013 at 2 p.m. (doors open at 1:30 p.m.) in the "Auditorium" of theHiltonHotel, Aeschengraben 31, in Basel, Switzerland.
Agenda and Proposals
1. Annual Report, Financial Statements and Consolidated FinancialStatements for2012
Proposal of the Board of Directors:
Approval of the annual report, financial statements and consolidatedfinancialstatements for the business year 2012.
2. Appropriation of the Results
Proposal of the Board of Directors:
Carry forward of accumulated deficit of CHF 2,447,655.
3. Release of the Members of the Board of Directors and of Management
Proposal of the Board of Directors:
Release of the members of the Board of Directors and of Management.
4. Election to the Board of Directors
Proposal of the Board of Directors:
Election of the following individual for a term of three years, i.e. untiltheordinary general meeting of shareholders of 2016:
The Board proposes Dr. Martin Nicklasson (born 1955, Swedish citizen) asdesignated non-executive Chairman of the Board of Directors, succeeding Mr.Werner Henrich.
5. Election of the Statutory Auditors
Proposal of the Board of Directors:
Re-election of PricewaterhouseCoopers AG, Basel, as Statutory Auditors fortheaudit of the stand-alone and the consolidated financial statements for thebusiness year 2013.
6. Distribution of approximately CHF 48 million to the Shareholders
HBM Healthcare Investments (Cayman) Ltd. proposes that Basilea make adistribution to its shareholders of CHF 5.00 per share (for a total ofapproximately CHF 48 million) from reserve from capital contributions. Youmayfind the precise wording of the proposal under the explanations to theagendaitem (Ad agenda item 6).
Explanations to the agenda items
Ad agenda item 4
The term of Mr. Werner Henrich, current Chairman of the Board, ends at thisyear's ordinary general meeting of shareholders. In view of the impendingstatutory age limit for board membership which he will reach during 2013,Mr.Henrich will not stand for re-election.
In 2012, Mr. Claude Schreiner reached the statutory age limit for boardmembership and thus does not stand for re-election.
Dr. Martin Nicklasson (born 1955, a Swedish citizen) is a certifiedpharmacistand holds a PhD in pharmaceutical technology from the University ofUppsala,Sweden. He is Associate Professor at the Department of Pharmaceutics,Universityof Uppsala. Dr. Nicklasson held a number of leadership positions incommercialoperations and drug development within Astra and Kabi Pharmacia beforejoiningAstraZeneca Plc. From 1999 to 2007 he held various Executive Vice Presidentpositions at AstraZeneca Plc., and acted as a member of the ExecutiveCommittee.From 2007 to 2010, he was the President and CEO of Biovitrum AB and SwedishOrphan Biovitrum AB, one of Europe's largest specialty pharma companiesfocusingon rare diseases. He is currently a senior partner at Nicklasson LifeScienceAB, an independent consultancy and advisory company to the pharmaceuticalandbiotechnology sector. Dr. Nicklasson is member of the board of Biocrine AB(Sweden), Pozen Inc. (USA), Oasmia AB (Sweden) and chairman of the board ofdirectors of Farma Holding AS (Norway) and Orexo AB (Sweden). He is memberofthe Royal Swedish Academy of Engineering Sciences, the Royal Bachelors'Club (Sweden), the Pharmaceutical Faculty Council of the University of Uppsala,andthe Swedish Academy of Pharmaceutical Sciences.
Ad agenda item 6
HBM Healthcare Investments (Cayman) Ltd. ("HBM") proposes the following:
* transfer of an amount of CHF 47,938,105*, corresponding to CHF 5.00 per share, from general reserves (from capital contributions) to freereserves (from capital contributions);
* distribution of CHF 47,938,105*, corresponding to CHF 5.00 per share,to the shareholders in cash, by reducing the free reserves (from capital contributions) and thus the additional paid-in capital correspondingly (without an amendment to the Articles of Incorporation);
* assertion of the presence of statutory auditors PricewaterhouseCoopersAG, Basel, as officially supervised audit firm and recognizing theiropinion that confirms that despite the distribution the claims of creditors are fully covered;
* authorization of the Board to determine the payment date of thedistribution herein resolved within a period not exceeding 75 days from the date ofthe shareholders' meeting.
In the event the resolution is approved, the reserves of the Company willchangeas follows:
+------------------------------------------------------------+------------+
|General reserve from capital contributions as of December | |
|31, 2012 before appropriation | 343,051,949|
+------------------------------------------------------------+------------+
|Appropriation to free reserve from capital contributions | 47,938,105*|
+------------------------------------------------------------+------------+
|General reserve from capital contributions after | |
|appropriation |295,113,844*|
+------------------------------------------------------------+------------+
|Free reserve from capital contributions before distribution | 47,938,105*|
+------------------------------------------------------------+------------+
|Distribution to shareholders from free reserve | 47,938,105*|
+------------------------------------------------------------+------------+
|Free reserve from capital contributions after distribution | 0|
+------------------------------------------------------------+------------+
*exact figure would change upon option exercises
Board positionThe Board recommends to shareholders that they do not vote for the proposalofHBM at this time.
The Board and Management have successfully positioned Basilea to be able toachieve significant value creating milestones in 2013:
* Basilea and its partner Astellas expect to report key phase 3 data on isavuconazole in the second half of 2013. Isavuconazole has thepotential to become the leading azole for the treatment of life-threatening invasive fungal infections providing several advantages over current therapies.
* Basilea's broad-spectrum antibiotic ceftobiprole for the empirictreatment of severe pneumonia and multidrug-resistant bacterial infections in the hospital setting has the potential to be approved by European health authorities this year.
* Basilea's novel antibiotic BAL30072 for the treatment ofmultidrug-resistant Gram-negative bacterial infections where currently only limitedtreatment options are available and the oncology drug BAL101553 for the treatmentof tumors resistant to current cancer therapies are planned to reportphase 1 data this year.
Basilea is focused on achieving these milestones. Further, the Company isstringently managing its financial resources to achieve these milestonesthat,if achieved, can create significant value for the Company and all of itsshareholders. The above mentioned milestones will bring the Company closertoprofitability.
It should also be of note that Basilea is not currently considering anymajortransaction prior to resolving the above milestones.
The Company has been very successful in creating value through transactionsaswith its most recent Toctino® transaction. The Company will continueto seekpartnerships to optimize the value of its drug candidates and believes thatitcan continue to create value with the capital it has raised through thisandother transactions.
The Board supports a capital distribution to shareholders but it does notconsider an immediate capital distribution to be prudent given thesignificantmilestones facing the Company and the need for financial flexibility toallowthe Board and Management to optimize the value of the Company for allshareholders. A distribution at this time may result in limited financialflexibility to achieve the Company's milestones and limited resources tocontinue funding the Company's early-stage pipeline that is focused onidentifying new medicines overcoming drug resistance in the areas ofanti-infectives and oncology; an increasing medical need.
The Board recommends to shareholders that they not vote for the proposal ofHBMat this time but rather defer this decision until after the Company hasachievedcertain major milestones and leave the Company with the financialflexibility tooptimize the value of the Company for all shareholders with the existingCompany's capital.
The Company continues to remain open to options that will optimize thevalue ofBasilea for all its shareholders and stakeholders.
Right to Participate/Proxies
Only shareholders and usufructuaries who as per March 28, 2013 are recordedinthe share register with voting rights are entitled to participate andexercisetheir voting rights.
No Trading Restriction on Shares: The registration of shareholders forvotingpurposes does not affect the trading of Basilea shares held by registeredshareholders before, during or after a general meeting.
Admission cards can be ordered from the Share Transfer Office of Basilea atSIXSAG AG, Basilea Pharmaceutica Ltd., P.O. Box, 4609 Olten, Switzerland, bymeansof the enclosed form "registration to attend".
Proxies: If you do not wish to attend the general meeting in person, youcan berepresented by any other person, by Basilea or by the IndependentRepresentative, Dr. iur. Kilian Wunder, Attorney and Notary, Steinenschanze6, 4051 Basel, Switzerland, pursuant to Article 689c of the Swiss Code ofObligations. The enclosed form "registration to attend" can be used togrant aproxy as well as to give voting instructions to the IndependentRepresentative.If the Independent Representative does not receive written instructions forsomeor all of the proposals, including proposals that may be made at thegeneralmeeting, he will vote in favor of the Board of Directors' proposals. If youarerepresented by Basilea, your vote will be cast in favor of the Board ofDirectors' proposals. Signed proxies left blank will be deemed to be amandateto Basilea to vote in favor of the Board of Directors' proposals. ProxiestoBasilea with other instructions deviating from the Board of Director'sproposalswill be regarded as proxies to the Independent Representative and forwardedtothe Independent Representative.
Annual Report 2012: You will find enclosed a copy of our Annual Report2012,which is also available on the internet at www.basilea.com. From March19, 2013, the Annual Report and the reports of the Statutory Auditors,includingtheir opinion with respect to agenda item 6, will be available forinspection byshareholders at our Basilea offices. These reports can also be obtained byshareholders upon request from the Corporate Secretary at BasileaPharmaceuticaLtd., P.O. Box, 4005 Basel, Switzerland.
Yours sincerely
Basilea Pharmaceutica Ltd.Board of Directors
Press release (PDF):http://hugin.info/134390/R/1683566/551033.pdf
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