Mergers and Acquisitions

* On June 4, 2013, Novavax, a US vaccine development company, has announced that the company has made a public tender offer to acquire all outstanding shares and warrants of Sweden-based Isconova. The total transaction is valued at approximately $29.6 million USD based on the June 3, 2013 closing stock price of Novavax’s common stock. Novavax will acquire all outstanding Isconova AB shares for approximately 15.5 million shares of Novavax common stock, corresponding to an offer value of SEK 15.46 for each Isconova share. In addition, Novavax has offered to cash out all outstanding 2005-I warrants and 2005-II   warrants for SEK 140,277, based on a “Black-Scholes” valuation. Pursuant to the private offer for stock options, Novavax intends to issue 218,120 shares of Novavax common stock, corresponding to a value of SEK 8.30 for each option share. Following completion of the Offer, Novavax’s current intention is that the executive management team of Isconova will be offered positions subject to their commitment to the combined company. The board of Novavax believes that the prospects for employees of Isconova will generally be enhanced through the strengthened market position and growth prospects of the combined company. Novavax currently has no intention to make any significant changes regarding Isconova’s employees, their terms of employment or the location where the company conducts business.

Novavax will implement the combination via a recommended public offer by Novavax to the holders of shares and warrants in Isconova. According to the terms of the Offer, Novavax will issue 15,454,471 shares of its common stock, with an aggregate transaction value of SEK 192.8 million (USD 29.2 million), based on the closing price of Novavax shares on 3 June 2013, the last trading day prior to the announcement of the Offer.

Assuming full acceptance of the Offer and that all holders of stock options accept the private offer to waive their rights under their stock options (see below), the Offer is expected to result in Novavax’s present shareholders holding 91.1 percent of the combined entity, and Isconova’s present holders of shares and stock options holding 8.9 percent of the combined entity, based on the number of issued shares in each company at full dilution. 
Tthe Board of Isconova has unanimously recommended holders of shares and warrants in Isconova to accept the Offer.

Novavax is currently developing recombinant vaccine candidates across a wide-variety of disease indications with four clinical-stage programs in seasonal influenza, pandemic influenza, RSV and rabies, as well as a number of other programs currently in earlier-stage pre-clinical development. Three of these clinical-stage programs are currently testing adjuvants, which are substances that act to enhance immune responses to specific vaccine targets. Novavax has been and continues testing adjuvants in all of its pre-clinical programs to see whether they enhance the immune responses to those vaccine candidates. In October 2012 Novavax published successful results of its Phase I clinical pandemic influenza vaccine trial using a third-party’s saponin-based adjuvant. Based on these data and Isconova’s published clinical data, Novavax believes that Isconova’s vaccine adjuvant technology will complement and strengthen its existing vaccine programs and provide Novavax with greater control of the development and use of adjuvants within these programs.