SAN DIEGO, July 6, 2010 (GLOBE NEWSWIRE) -- MediciNova, Inc., a biopharmaceutical company that is publicly traded on the Nasdaq Global Market (Nasdaq:MNOV) and the Hercules Market of the Osaka Securities Exchange (Code Number: 4875), today announced that on July 1, 2010, it completed the sale of all of its Auction Rate Securities ("ARS") held by UBS AG at par value. After repaying the ARS Loan described below, MediciNova netted $9.5 million from the transaction, all of which has been invested in money market funds.
In August 2008, UBS AG and its affiliates ("UBS"), the brokerage firm through which MediciNova purchased the majority of its ARS investments, entered into a settlement with the SEC, the New York Attorney General and other state agencies. Under the settlement, UBS issued to MediciNova the Auction Rate Security Rights, which would allow MediciNova to sell to UBS its ARS held in accounts with UBS ("ARS Rights Offer"). Pursuant to the ARS Rights Offer, MediciNova received the right to sell to UBS the ARS held in accounts with UBS at par value at any time during the period beginning June 30, 2010 and ending July 2, 2012. As part of the settlement, UBS also offered to MediciNova a no net cost loan program ("ARS Loan"), whereby MediciNova was able to borrow up to 75% of the market value, as determined by UBS at its sole discretion, of MediciNova's ARS that were pledged as collateral at an interest cost that would not exceed the interest being paid on the underlying ARS investments.
MediciNova continues to hold $1.8 million of ARS consisting of private placement securities that are classified as long-term investment securities. None of the underlying collateral of the ARS consists of subprime mortgages or collateralized debt obligations."We will use this cash to facilitate the further development our lead compound, MN-221 for the treatment of acute exacerbations due to asthma and COPD," said Yuichi Iwaki, M.D., Ph.D., President and Chief Executive Officer of MediciNova.