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Progen Shareholders Call Meeting to Spill Progen Board and Offer Merger or Full Cash Back to Shareholders
Date:1/28/2009

MELBOURNE, Australia, Jan. 28 /PRNewswire/ -- Cytopia Ltd (ASX: CYT) has joined with other Progen Pharmaceuticals Ltd (ASX: PGL) shareholders to call a Progen general meeting to elect a new board, pursue a merger and enable the first full share buyback offer to Progen shareholders.

Key resolutions being put to Progen shareholders include:

  • Offering those shareholders who wish to do so the opportunity of having their shares bought back for $1.10 per share
  • Removal of the current board and replacement with three independent directors who would be elected on a declared platform of exploring a merger between Cytopia and Progen

To minimize cost and inconvenience the meeting notice requests Progen to put the resolutions for consideration at the same time that a general meeting is held to consider the proposed merger between Progen and Avexa Ltd (ASX: AVX). This will give shareholders much greater flexibility of choice and all resolutions can be dealt with in one forum.

A copy of the Requisition of General Meeting notice and a Members' Statement are appended to this announcement. The Members' Statement provides further detail on the calling of the meeting and the proposed resolutions.

The meeting resolutions provide clear choice for Progen shareholders. By not capping the buyback of shares, every shareholder has the opportunity to either support the further development of Progen under new board and management or, redeem cash of $1.10 per share, subject to available net cash reserves. This is currently denied to Progen shareholders under the proposed Avexa merger terms where only $20 million is available for the share buyback.

Cytopia is of the view that the Progen board appears to have lost the confidence of many investors after seemingly few achievements in the past few years.

Three well qualified and experienced directors, Mr. Robert Collins, Dr. Damian Pethica and Mr. Tom Williams, are proposed for appointment to the board of Progen. These candidates bring a strong mix of commercial and scientific skills necessary to drive corporate results for Progen and are strongly supportive of a merger between Progen and Cytopia. Biographies of each candidate are also appended to this announcement.

To avoid any conflict of interest no Cytopia representative has been nominated to the board. The candidates will be obliged to act in the best interests of Progen and the remaining Progen shareholders and their intentions will have been openly communicated to all parties. This will allow for a fully informed decision to be taken by Progen shareholders at the meeting.

"We believe that Cytopia would make an excellent partner for Progen and together we can build a bluechip oncology drug development company with a broad and advanced portfolio of programs," said Mr. Andrew Macdonald, CEO of Cytopia. "For those Progen shareholders who remain committed to this vision our merger proposal is based upon an excellent fit of complementary skills and programs in small molecule biotechnology. There is considerable opportunity to unlock value in both stocks.

"Cytopia is a world class drug development company with drug candidates ranging from the JAK3 program partnered with global pharmaceutical company Novartis through to CYT997, a vascular disrupting agent which is now in Phase II clinical studies. Our business strategy of supporting multiple drug programs and partnering prior to long and expensive Phase III clinical studies is a very commercial strategy.

"Today's actions by the requisitioning Progen shareholders are actually very consistent with the Beerworth and Partners Ltd report recommendations communicated by Progen."

Mr. Macdonald said, "Progen was once a strong player in the Australian biotech space. The proposal can restore the company to one of Australia's leading cancer drug developers through a merger with Cytopia. The calling of this meeting is a serious turning point for Progen."

Cytopia will provide further commentary once Progen has responded to the requisition notice.

    Enquiries:
    Mr. Andrew Macdonald
    Chief Executive Officer
    T: +61 3 9208 4232
    andrew.macdonald@cytopia.com.au

    Mr. Rudi Michelson
    Monsoon Communications
    T: +61 3 9620 3333
    rudim@monsoon.com.au

About Cytopia

Cytopia Ltd is an Australian biotechnology company focused on the discovery and development of new drugs to treat cancer and other diseases. Cytopia conducts its research and drug development through subsidiaries based in Melbourne, Australia and San Francisco, USA and specializes in developing new small molecule compounds with an improved therapeutic profile for the treatment of cancer.

The company's lead drug candidate is CYT997, a vascular disrupting agent (VDA) for the treatment of various cancers, which is currently being trialed in Phase I and Phase II clinical studies. Cytopia is continuing to build on its range of JAK inhibitors and kinase expertise, with CYT387, a novel oral JAK2 inhibitor focused on the treatment of myeloproliferative disorders, expected to enter Phase I clinical studies in early 2009.

Website: www.cytopia.com.au

Director Candidate Biographies

Mr. Robert J Collins

Mr. Robert Collins has over 30 years experience in senior positions of both listed and unlisted companies in Australia and overseas. He was the Managing Director of the ASX listed company Candle Australia Limited from 2001 to 2007 and was also on the Board of the Health Insurance Commission (now Medicare Australia) which administers programs including Medicare and the PBS System. During his tenure from 2000 to 2005, he was also Chair of the Audit Committee and served on the Fraud and Audit Service Committee. Mr. Collins has a Bachelor of Science degree from Monash with majors in Genetics and Immunology, and is also a Fellow of the Australian Institute of Company Directors.

Dr. Damian Pethica

Dr. Damian Pethica worked for CibaGeigy in Basel, as a group head in the medical department, pharmaceutical division, and then as Medical Director of CibaGeigy New Zealand. Following the merger of CibaGeigy and Sandoz, he became Medical Director of Novartis New Zealand. He subsequently joined Flemings in London as a biotechnology equities research analyst. After the acquisition of Flemings he became Vice President, Biotechnology Equity Research for Europe for JPMorgan Chase. Dr Pethica was educated at Oxford University (Mathematics) and London University (Medicine), and was in general medical practice for about seven years. He is a Fellow of the Faculty of Pharmaceutical Physicians, Royal College of Physicians, London, and a current authorized representative of JT Campbell & Co, Melbourne. He is a current member of the Medicines Assessment Advisory Committee, New Zealand, and Chairman of BrainZ Instruments Ltd (ASX: BZI).

Mr. Thomas Williams, BSc (Hons)

Tom Williams, BSc (Hons), has had extensive experience in pharmaceutical and biotech companies beginning with Glaxo Australia where he was responsible for new drug applications and introducing new mediabased marketing methods. He recently retired as CEO of listed biotech BioDiem Ltd where he negotiated deals with big pharma for their novel flu vaccine and directed the development of other compounds into the clinic. He also has a broad business background as a marketing consultant and as a fund manager with a merchant bank.


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SOURCE Cytopia Ltd
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