SOUTH SAN FRANCISCO, Calif., April 14 /PRNewswire-FirstCall/ -- VaxGen, Inc. (OTC Bulletin Board: VXGN), a biopharmaceutical company, and diaDexus, Inc., a privately held diagnostics company focused on the development and commercialization of patent-protected in vitro diagnostic products addressing unmet needs in cardiovascular disease, announced today that they have entered into a non-binding Summary of Terms pursuant to which it is contemplated that, if a definitive agreement is entered into and requisite approvals are received, VaxGen would acquire diaDexus by a merger of a wholly-owned subsidiary of VaxGen with diaDexus in exchange for common stock of VaxGen. If the merger is consummated, upon the closing of the transaction, diaDexus will become a wholly-owned subsidiary of VaxGen, diaDexus stockholders will become stockholders of VaxGen, the officers of the combined company will be the current officers of diaDexus, and the combined company will be re-named diaDexus.
"We believe that this potential transaction with diaDexus represents an excellent strategy to maximize the value of VaxGen's remaining tangible and intangible assets and to provide our stockholders with the opportunity to participate in diaDexus' potential success as a leader in the development and commercialization of novel diagnostic products," said James Panek, President of VaxGen. "We believe that VaxGen's cash would provide capital for diaDexus to grow its product revenue and achieve profitability. The potential future value of the anthrax vaccine candidate, which was the subject of an asset sale agreement with Emergent BioSolutions (NYSE: EBS), and VaxGen's HIV/AIDS vaccine candidates, licensed to Global Solutions for Infectious Disease, would be retained and preserved within the combined company."
"The proposed merger provides an efficient path for providing capital to fund the growth of our commercial organization, to continue activities needed for broader reimbursement of our PLAC® Test, and to provide for potential expansion of our product portfolio," said Patrick Plewman, President and CEO of diaDexus. "The PLAC® Test for Lp-PLA2 is the only blood test cleared by the FDA to assess risk for coronary heart disease and ischemic stroke, the #1 and #3 annual causes of death, respectively, in the U.S."The non-binding Summary of Terms has been approved unanimously by the boards of directors of both VaxGen and diaDexus. The companies expect to negotiate and execute a definitive merger agreement consistent with the Summary of Terms within the next 30 to 60 days, assuming they are able to reach agreement on definitive terms. The merger would be subject to customary closing conditions, including approval of the merger by diaDexus' stockholders, and approval of the amendment of VaxGen's certificate of incorporation to increase the authorized number of shares of VaxGen by VaxGen's stockholders.