OxiGENE’s New Merger (NASDAQ:OXGN)

OxiGENE and VaxGen on Thursday morning announced that they have entered into a definitive merger agreement where OxiGENE will acquire VaxGen in exchange for common stock of OxiGENE Inc. The merger has been approved by the board of directors of both the companies, OxiGENE and VaxGen and the transaction is speculated to be finalized and complete by the first quarter of 2010. Once the merger deal has been closed, VaxGen will turn into a wholly owned subsidiary of OxiGENE and at the closing of this deal, OxiGENE will be providing more 15.6 million shares of common stock in exchange for all outstanding shares of VaxGen’s common stock. Once the deal is finalized stockholders of VaxGen will automatically become stockholders of OxiGENE Inc.

VaxGen shareholders will get 0.4719 of a share of OxiGENE for every share they own of VaxGen, which will leave them around 20 percent of the equity once the deal is finalized and the companies are merged. OxiGENE CEO Peter Langecker said in an announcement that the merger is a timely and efficient strategy to strengthen OxiGENE’s cash flow and fund operations till 2011 and that these funds would help them in their clinical development programs.