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Annual Meeting Notes,
(from someone who sat next to you no less, Dr McNamara!
Looking forward to any notes you might care to post.
These notes from AOL board. Many thanks to Spyros.
Regards. Peter)
Subject: May 20 Annual Meeting
Date: Wed, May 20, 1998 14:35 EDT
From: Spyros1950
The following is from my notes at today's stockholder meeting.
1). the meeting lasted the typical fifty minutes. 30 minutes of regular business, and 20 minutes of questions from the floor.
2). Regarding ADCON : L(umbar) and T/N (tendon) are currently selling outside the USA, P(elvic) is in clinical trials, and the last three (Abdominal, Implants, Cardiac) are under development in the Glia lab. The approval of Adcon-L will help the other adcon family members gain quicker approval IN EUROPE, but NOT in the USA . ( In the USA, the approval process will be just as thorough for each of the other family members).
3). Adcon L and T/N have now been used in over 12,000 surgeries in 29 countries. USA launch of Adcon-L is for mid 1998. The USA market penetration target for Adcon-L is for 5 to 10 % for the first 12 months. Over the next five years, the target is 35%. The overall USA market for Adcon-L is estimated to be at $200 million.
In Europe, the resale rates to existing accounts are rising. In five years, competition will come into the market. Adcon is achieving 60% gross margin. The 400 patient German Study will be completed by the end of 1998. In Japan, the PMA application has been filed, and Adcon will probably be approved late 1998, or 1999 at the latest.
4). For Adcon-L, the USA target market is the surgeon ( as opposed to the hospital or patient). Independent sales agents will be used to sell to the doctors. In total there are 29 agents with 140 reps. They have targeted 2500 orthopedic and 4000 neurosurgeons as the market which should cover 85% of spinal surgeries. If a sales agent does not achieve the minimum 5% market penetration, a review will be held and appropriate actions taken.
Management is not aware of any off-label usage. (Note: there are different categories of spinal surgeries. Adcon is only to be used in the Lumbar.) Glia will charge $495 per unit. (The typical spinal surgery today ranges from $8,000 to $15,000.) The product is currently manufactured in the Netherlands. A USA manufacturer will be choosen after initial sales data is reviewed.
5). Cognitive Modulation Program - Glia is concentrating on the H3 Receptor. A lead compound has be identified. GT2331 will begin human testing in 4Q 1998.
6). Alzheimer - They are close to selecting a lead compound. Once selected, human trials will begin one year later. Johnson & Johnson is their partner only in the Alzheimer product . J&J owns 3% of Glia shares.
7). Two million additional shares will be issued soon. Management expects the market capitalization to increase.
8). The Case Western suit has been completed.
9). Relocation of the company will be decided by the middle of this summer. The State of Ohio has had several talks with the company. Another meeting with them is scheduled for later today.
In summary , that completes my notes. I hope that they help you. Additionally, at the meeting I sat next to Dr. Mike McNamera. You may want to check out the Silicon Invester board as he normally posts his notes there.
Good Luck to all,
Spyros
Subject: Re: Why up on Monday
Date: Wed, May 20, 1998 22:13 EDT
From: Spyros1950
Mike, here are a few comments for some of your questions:
1. Recent price action - As there was a large article on Glia in Monday's local paper, The Cleveland Plain Dealer, it is "normal" to see a small run-up in price. We have seen this happen several times in the past. Perhaps the key here will be trading volume. With Monday at 205k, Tuesday at 430k, and today at 126k, then hopefully we will see another big trading volume tomorrow. If not, chalk up this week's run up to the Plain Dealer.
2. Additional shares - When asked at today's meeting about the dilution of current shares by the new additions, The CFO stated that "the company expects the MARKET CAPITALIZATION to increase". This was "strange wording" to me as it really says NOTHING because a PRICE DROP combined with the increased number of shares could still give an increased market capitalization. (My gut feel is that the CFO pulled a fast one here. The question was straight forward: What will happen to the price of the current shares? The answer came back in terms of "Market Capitalization"??????)
3. Who receives shares - only your broker or even his boss only knows. I can guarantee you that the wording will make it appear that the offering is open to all, but as I said previously that was not the case the last time. As ZVCHRIS noted earlier, we can only hope that Glia does the right thing this time around.
4. Standard of Care - With a goal of 5 to 10% market penetration for the first twelve months, and a 35% goal in five years, it may still be a little early to speak about Standard Of Care. Of course, sales could always come in above expectations, but then again the company is expecting competition in the same five year period that will hold down Glia's market share.
5. Off label use. - per the CEO today, there is no off label use. The ADCON family has six products which are each designed for a specific body area and in the USA, each product will have to be thoroughly evaluated by the FDA. (The approval of one product does not necessarily make the next evaluation any easier. In Europe YES, but in the USA NO such luck)
In summary, nothing written above is carved in stone, and anything can happen. If anybody feels differently, then please share your thoughts. Through discussion, maybe we can all invest more wisely.
Good Luck. Spyros
Subject: Re: S-3
Date: Tue, May 19, 1998 01:48 EDT
From: Spyros1950
To : ZVCHRIS
I agree with your post and feel that your sales feedback will be very important to everyone on this board.
Additionally, I would like to add a comment on your question of "who" will purchase these shares.
The last time (1996?) Glia filed (and later withdrew) a request for a secondary offering, shares were not slated to reach the public or institutional investors. ALL the shares ( or at least the lion's part) were to go to Johnson & Johnson. ( The deal "looked" like a public offering, but J&J was going to receive the primary benefit. In a word, this transaction was an "accomodation for a friend". In another word, it was a "bad deal" for the small investor - if J&J wants to purchase shares , then let them do it on the "open" market so that the current stockholders can benefit by the increased demand. If on the otherhand, Glia REALLY (???) needed the cash, then why not let the real PUBLIC buy the shares. This deal may have been legal, but it sure stunk. It is probably also why I do not believe management when they speak today.)
A funny thing happened along the way, however, the open market share price fell and Glia cancelled the offering. Of course, now two years later, we can possibly repeat history.
I neither know the "selling plan" for this years offering, nor do I know how this deal will eventually work out. By posting what has happened in the past, I hope that all of us small investors may have a fairer chance to invest successfully.
Until then, "be careful, its a jungle out there".. Good Luck to all, Spyros |
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