Dimethaid shareholder group demands big changes
2004-09-07 12:09 ET - News Release
Mr. Dan Chicoine reports
CONCERNED DIMETHAID SHAREHOLDERS MAIL CIRCULAR
A group of concerned long-term shareholders of Dimethaid Research Inc., whose total share ownership is approximately 10 times that of the current chief executive officer and board members, have announced that they are soliciting the votes of Dimethaid shareholders in support of a new slate of directors pursuant to the filing of a proxy circular. A website with more information for shareholders has been set up at www.yellowproxy.com.
The decision to nominate a new board comes after years of frustration with the direction of the company and with its depressed share price, which continues to reach new lows. The concerned shareholders believe that fundamental change, beginning with the replacement of the board of directors, is required to turn the company around.
"Despite the fact that Dimethaid has an innovative product and two promising technology platforms, we believe that current management has failed to successfully commercialize or develop products to their full potential," said Daniel Chicoine, a member of the concerned shareholders and a nominee for director. "While management fumbles, patents expire, competitive products emerge and science moves on," Mr. Chicoine said in a letter to Dimethaid shareholders.
"We need no more evidence of the need for change than the fact that our stock price is languishing at a multiyear low of about 30 cents and the company, by its own admission, is in a depressed financial condition," Mr. Chicoine said.
"Our vision for Dimethaid is diametrically opposed to that of the current management and board of directors. We believe the current strategy being pursued -- that is, creating a fully integrated pharmaceutical company -- has failed. We believe that our objective is more realistic and achievable -- to focus and capitalize on Dimethaid's core competency -- being a biotechnology development company. We believe that this path, which is more common among biotechnology companies, is the best way to create value for shareholders," Mr. Chicoine said.
"We believe Dimethaid still has a future if decisive action is taken immediately. But we see the need to fundamentally alter the course that the company has been on for far too long." The group announced a list of immediate priorities it will pursue if successful:
replace the current CEO with Henrich R.K. Guntermann, and appoint an independent chairman of the board;
address and rectify the depressed financial condition of the company by putting in place stable, long-term financing;
focus on R&D and early-stage drug development while eliminating non-core activities;
ensure that cash flow from approved drugs covers the infrastructure needed to support them;
share the risk and cost of new drug development by partnering with other industry players;
bolster the company's capability in business development for licensing and marketing arrangements; and
reduce, and ultimately eliminate, the costly dependence on dilutive financings, simply to finance day-to-day operations.
The concerned shareholders are proposing a board of directors with experience in the pharmaceutical industry and a track record of transforming unprofitable businesses into profitable ones. The nominees for the board are Daniel H. Chicoine, David A. Copeland, Anthony E. Dobranowski, Dr. Henrich R.K. Guntermann, Dr. Klaus von Lindeiner, John C. London and Dr. Jacques Messier.
The concerned shareholders propose that Dr. Guntermann become CEO of Dimethaid and Mr. Chicoine the new independent chairman of the board. Dr. Guntermann is an MD with experience in the life sciences sector, including business development, restructuring and corporate financing. In conjunction with a group of distinguished life sciences entrepreneurs, he founded BioAlliance AG, a German-based life sciences private equity and consulting firm.
Mr. Chicoine is currently the vice-president, finance and corporate development, for the Cosma Group of Magna International Inc. Since 1982, he has held various positions at the Magna group of companies, including as president and chief executive officer of Atoma International Inc., where he succeeded in growing its business from $300-million per year to $1-billion and effected a major restructuring. More information on the nominees is available in the group's circular, which can be found on the Internet at www.yellowproxy.com.
"We have limited time to bring about the necessary change at Dimethaid, but are confident that the vast majority of shareholders will agree with us on its need," Mr. Chicoine added.
Shareholders supporting the need for change are asked to follow the instructions on the yellow proxy that they either receive in the mail or obtain from www.yellowproxy.com. |
