Here is why that is unreasonable:
Let's pretend you discovered a chemical that may be used to treat cancer (nearly all cancers). Assuming - that the drug is legitimate and will work - which after many many many hours of research, I believe is the case -
you leave your current company (which was using laser technology to try and treat cancers). You take your $20-$30 million dollars (essentially severance) and pour it into this new chemical (Rose Bengal). You begin testing, experimenting, and for several years you work on clinical trials. You devote your life to it.
Excited that it works BETTER than you had initially thought, and moving ahead in trials, etc, you get milestone bonuses. Much deserved. You're going to make the company and shareholders a ton of money, if approved.
You do your best to not waste money. No luxurious private jets, no five star hotels or business dinners, you use the top melanoma experts in their fields. You keep your same crappy office and don't wast money on new offices, furniture, etc. You only spend $150,000 to get where you are now - when the average to get a drug approved is $500 million and 7 years...let alone a cancer drug. DNDN spent $1.6 billion and 16 years...just for reference).
Saving the company MILLIONS, maybe tens or hundreds of millions, you feel justified in taking bonuses. Shareholders vote on a regular basis to approve it.
You're working on your SPA for phase 3. Excited to start phase three, you're working with certain people to give them the details and setup the trial design they wish.
Then the FDA Changes. They do a reshuffling and you're working completely new people.
Then the FDA starts changing laws and rules. You continue to not complain and try to reshuffle, adjust, and get what they want. Yes, frustrating.
Then, with lack of progress, in 2012, the bonuses stop. Then, BTD becomes a new option. Breakthrough therapy designation did not exist before 2013. They feel the FDA wants their drug, but wants to know how things work. They continue to run murine (mouse) and human clinical data trials, they continue to keep improving the drug, filling patents, and making things more pure.
The stock starts to climb. Then, 1/23 happens. Bashers lie and it crashes. They are called a fraud, even threatened with death, and are inundated with people who are understandably upset.
They continue working, likely nonstop, for months, to get the application, data, checking, rechecking done. They work with the FDA, consultants, etc. To get the BTD application in. They continue to work on what the FDA needs and feel confident that the FDA will approve it.
Tell me, how would you feel if you were being accused of fraud, or threatened by shareholders (a small minority) to be kicked out of your own company? Very, very unreasonable.
Maybe they felt justified in their bonses. I don't think, given the situation, that they were that outrageous. IF investors had problems, they should have voted against them.
But to keep rehashing it or to think of removing them (now, especially - that would really send things into chaos!) is a bit much.
It's ludicrous, in my opinion.
They have not done anything so egregious or anything illegal, or anything that has not been approved. But now investors know and can vote differently.
And the fact they were so obliging to return the money says a lot about their character. I probably would not.
And if you're long, you'd better hope they don't decide to get a bit upset about the way they are being treated and portrayed (I might) and start selling warrants or shares. Because that will hurt the share price.
I bet most wouldn't care if they had given themselves more stocks or warrants instead. But that would actually have diluted and given them way more cash in the long run.
Sorry to the longs who find this offensive - but you should understand that the nature of a biotech company is that it takes several years to see movement. So be patient.
To suggest you oust those who are responsible for the discovery, however, seems unreasonable. |
