Progenics Pharma (PGNX) Files Presentation with SEC Challenging 'Flawed Arguments' by Velan Capital
Progenics Pharmaceuticals, Inc. (NASDAQ: PGNX) today filed a presentation with the U.S. Securities and Exchange Commission (“SEC”) in connection with its upcoming 2019 Annual Meeting (“Annual Meeting”) scheduled for July 11, 2019. The presentation addresses Velan Capital, L.P.’s (“Velan”) latest flawed arguments and is intended to supplement the investor presentation Progenics filed with the SEC on June 21, 2019 detailing the Company’s historic and ongoing actions to enhance shareholder value.
In addition to highlighting a number of illogical, contradictory and categorically untrue statements made by Velan, the presentation makes clear that:
- Velan’s comparison of AZEDRA to XOFIGO and LUTATHERA as a precedent for commercialization speed is deeply flawed and highlights its own complete lack of understanding of the oncology and radiopharmaceutical space. AZEDRA is a complex radiopharmaceutical designed to treat ultra-orphan cancers, has a high level of radiation and requires patients to be treated in an “in-patient” setting. XOFIGO and LUTATHERA, on the other hand, are for broader indications, have lower levels of radiation and can be administered in an “out-patient” setting. As a result of these differences, AZEDRA has a significantly more complex commercialization process than XOFIGO or LUTATHERA and comparing them is illogical. There is no disagreement that Progenics’ Board and management team saw the value in MIP and acquired AZEDRA at a steep discount. Since then, they have worked tirelessly to develop AZEDRA into a life-saving drug that analysts estimate has the potential to generate $130 million to $230 million of revenue annually.
- Velan’s criticism of the Company’s decisions regarding 1095 are totally illogical and without merit. Progenics began to develop 1095 when it was strategically and financially logical and prudent to do so—following the release of positive PSMA-617 Phase 2 clinical data from the Peter Mac study, which concluded near the end of 2016.1 Contrary to Velan’s assertion, “strong clinical data” did not exist when Progenics acquired 1095 in 2013. This point is further evidenced by the fact that no other company developed PSMA-617 before the release of this watershed data and that Endocyte’s share price increased nearly 17 times following the Company’s acquisition of the asset shortly after this data was released. These facts suggest that the market did not know the value of PSMA-617 before this point in time due to the lack of promising data to support development. Progenics had three viable pipeline assets in 2013 and made the sound business decision to focus on the later stage assets with strongest clinical data (AZEDRA and 1404), moving 1095 forward in its pipeline when there was strong data for success to support the responsible allocation of capital. Furthermore, when the Company turned its focus to 1095, it took shrewd steps to ensure that it would have clear competitive advantages over PSMA-617, including treating a larger market size, using a better understood isotope, being a leader in combination treatment and synergistic production with AZEDRA. Progenics’ strategy for developing 1095 consists of calculated decisions to maximize shareholder value, rather than gambling shareholder capital on an early stage asset with no viable data as Velan evidently would have preferred.
- Velan’s proxy campaign is about attempting to take control of the Progenics Board and the Company’s strategic direction. To date, Velan has refused ALL settlement offers that did not include a Board seat for Bala Venkataraman or one of his business partners that have histories of reported price gouging. This negotiating posture ignores our legitimate concerns that adding directors with associations with unlawful pricing practices could jeopardize the valuable relationships Progenics has forged over many years with regulators, doctors, payers and patients, among many other constituencies. In fact, Velan did not even respond to Progenics’ latest offer, which would have allowed Velan to designate two additional directors (over 20 percent) to the Board for a period of two years with requisite experience and without ESG concerns, such as past price gouging. We have therefore made a good faith effort to reach a compromise that balances Velan’s position as a shareholder owning nearly 10 percent of the Company against the valid ESG concerns identified by the Board about Velan’s candidates.
Your vote is important, no matter how many or how few shares you own. The Progenics Board strongly recommends that shareholders vote on the WHITE proxy card “FOR” all of Progenics’ experienced director nominees. If you need assistance voting your shares, please contact Progenics’ proxy solicitor MacKenzie Partners, Inc. toll-free at (800) 322-2885 or firstname.lastname@example.org.