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Biotech / Medical : Biotechnology Value Fund, L.P. -- Ignore unavailable to you. Want to Upgrade?

To: LLCF who wrote (725)	6/17/1999 3:24:00 PM
From: scaram(o)uche	Respond to of 4974

The first cyber-death threat that I ever rec'd was when I indicated that Lidak, now Avanir, would fail. That was back in the days of misc.invest.stocks, when LDAKA was selling at $7/share...... Thursday June 17, 2:29 pm Eastern Time Company Press Release SOURCE: AVANIR Pharmaceuticals AVANIR Pharmaceuticals Receives Ruling on Motion in Katz Lawsuit SAN DIEGO, June 17 /PRNewswire/ -- AVANIR Pharmaceuticals (Nasdaq: AVNR - news) recently was notified by the San Diego Superior Court that the court has ruled favorably on the company's motion for summary adjudication of certain issues in the lawsuit brought by David H. Katz, M.D., relating to his termination as president and CEO of the company in March 1998. The motion had been filed by the company in April 1999 to narrow the issues and shorten the trial, which is now scheduled to begin on August 23, 1999. Three of Dr. Katz's original fifteen claims were withdrawn by Dr. Katz prior to the court's ruling, including his claim for quiet title to the company's IgE technology, recovery of damages for invasion of privacy, and alleged plagiarism. One additional claim relating to Dr. Katz's stock options had been rendered moot when the company honored his exercise of options to acquire 375,000 shares of Class B common stock. The recent ruling by the court reduced Dr. Katz's remaining causes of action from eleven to six. Five of Dr. Katz's claims were summarily adjudicated by the court in the company's favor. In so doing, the court refused to grant Dr. Katz relief on his claim that sought to overturn several decisions of the board of directors, including the decision to terminate Dr. Katz's employment. The court also rejected Dr. Katz's request for an extension of time to exercise certain stock options, and the court ruled that Dr. Katz's employment agreement requires that he give the company a general release as a condition of receiving any severance benefits. The court further granted the company's motion with respect to Dr. Katz's claim for indemnity relating to unspecified expenses that he had incurred, including reimbursement for legal fees incurred opposing the termination of his employment. The trial is set to go forward on the remaining causes of action, which include Dr. Katz's claim for reinstatement of voting rights with respect to the Class B shares of stock he previously had sold to HealthMed, Inc. Trial also will include a determination whether Dr. Katz was fired ''for cause'' and therefore is entitled to severance pay; whether the exercise date for Mrs. Katz's options to 10,000 shares of Class B stock should be extended; whether Dr. Katz was ''defamed'' by company statements that he was fired ''for cause''; whether AVANIR interfered with any contractual relations between Dr. Katz and Medical Biology Institute; and finally, an accounting for unreimbursed expenses allegedly advanced to the company by Dr. Katz. The company expects its cross-complaint against Dr. Katz will go forward to trial. That cross-complaint seeks recovery of compensatory and punitive damages for Dr. Katz's breach of fiduciary duties as a director and officer of the company, including a plan to gain control of the company to the disadvantage of shareholders, a failure to protect the company's technology, and the deliberate and continued disruption of AVANIR's business. Acting pursuant to Dr. Katz's agreements with the company, the cross-complaint also asks that the court order Dr. and Mrs. Katz to assign any interest they may possess in a pending patent application pertaining to the company's proprietary IgE down-regulation technology. Dr. Katz is the company founder and served as chief executive officer from 1988 to March 1998. He served as a director from the company's inception to February 1999 and was president of the company from 1988 to 1989 and again from 1992 to March 1998. AVANIR Pharmaceuticals develops novel therapeutic products for the treatment of chronic diseases. The company is awaiting a decision on marketing approval of its lead product, docosanol 10% cream for the treatment of recurrent oral-facial herpes, from the U.S. Food and Drug Administration. The information contained in this press release, including any forward-looking statements contained herein, should be reviewed in conjunction with the company's Annual Report on Form 10-K/A and other publicly available information regarding the company, copies of which are available from the company upon request. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. Forward-looking statements usually contain the words ''anticipate,'' ''intend,'' ''believe,'' or similar expressions, and are subject to numerous known and unknown risks and uncertainties. In evaluating such statements, prospective investors should carefully review various risks and uncertainties identified in Form 10-K/A. Such publicly available information sets forth many risks and uncertainties related to the company's business and such statements, including risks and uncertainties related to drug development and clinical trials. The company can give no opinion as to the likely outcome of any litigation as trial results are unpredictable and outside of the influence and/or control of the company. SOURCE: AVANIR Pharmaceuticals