Chiron/Viagene Merger Objections

A shareholder asking for an injunction against the merger of Chiron and Viagene (Marketletter May 1) was dismissed as a "nothing issue" by Cowen & Co biotechnology analyst Joyce Lonergen. The suit alleges that the compensation is inadequate and that the defendants breached their duty to the shareholders.

Such mergers and subsequent lawsuits are common, she said, noting that once the merger is announced you can set your watch and one or two days later someone will file a lawsuit.

Sector analysts generally feel that the merger makes sense, given market conditions in the biotechnology industry. Ms Lonergen noted that Viagene had $32 million in cash or two years worth of working capital in December, and company officials realized the current difficulties of raising capital. Chiron supports the gene therapy that Viagene is pursuing and is in a position to contribute needed funds, she added.