Biotech Values

[DewDiligence]

AGIX Plunges on Debt Default

[The market cap has fallen more than 40% during the past three days.]

http://biz.yahoo.com/ap/080902/atherogenics_mover.html

›INDIANAPOLIS (AP) -- Shares of AtheroGenics Inc. sank 27 cents, or 42 percent, to 38 cents Tuesday after the drug developer said it would default on payment for 2008 convertible notes due Sept. 2, and it would miss interest payments.

The Alpharetta, Ga.-based company said it would miss scheduled interest payments on the 2008 notes and on 4.5 percent convertible notes due in 2011.

AtheroGenics said it tried to restructure its 2008 notes before they matured, but it failed to agree on acceptable terms with note holders.

The company also said in a statement that it retained Morgan Stanley "to assist it in evaluating restructuring alternatives to its current capital structure."

AtheroGenics CEO Dr. Russell M. Medford said in the statement the company's "very large debt burden" impeded its ability to develop its leading drug candidate and main asset, AGI-1067, which treats diabetes. The drug is in late-stage testing, and the company currently has no products on the market.‹