Pacgen Biopharmaceuticals Corporation (Pacgen) announced that Pacgen and Medigen Biotechnology Corp. (Medigen) have mutually agreed to terminate their letter of intent for a business combination of the two companies.

In accordance with the letter of intent signed in October 2008, the closing of the proposed business combination was subject to certain terms and conditions, including obtaining necessary approvals to enter into a definitive agreement. The parties determined that, in a share for share exchange transaction, the regulatory requirements in Taiwan would require an issuer to redeem dissenting shareholder interests for cash. Both parties anticipate that this requirement would negatively affect the liquidity and capital resources of the combined company, and that the proposed merger would be a significant undertaking given current financial market conditions. As a result, both parties have mutually elected not to proceed with the signing of a definitive agreement.

"We are disappointed that the merger is not completed as planned despite the strong intention of both parties," said Chung-Yu Wang, chairman and interim president and CEO of Pacgen. "Pacgen will review all strategic alternatives in light of this development," added Wang. "Medigen shares the same disappointment and appreciate the diligence efforts by both teams in the proposed merger," said Dr Stanley Chang.

Pacgen is a life sciences company focused on the development of therapeutics for the treatment of infectious and inflammatory diseases.

Medigen is a biotechnology company focused on the development of biopharmaceuticals for liver diseases and cancers in particular.