PCP recognizes Anova’s leadership in Canadian fertility as Anova celebrates its third anniversary Healthcare-focused private equity firm Persistence Capital Partners ("PCP") announced a substantial investment in Anova Fertility & Reproductive Health, a female-owned fertility practice that prioritizes social equity and inclusivity. This investment will enable Anova to expand their operations across Ontario, and focus on providing top-of-the-line fertility treatments to women all across Canada. Founded three years ago to the day by Dr. Marjorie Dixon, Chief Executive Officer, Anova boasts a state-of-the-art embryology laboratory and a clinic inspired by Dr. Dixon’s desire to improve the patient experience and humanize treatment in fertility care. Keeping quality patient care at the forefront, PCP will work closely with Anova’s management team on a number of strategic initiatives to support future growth. These initiatives include, opening new clinics, pursuing investment and partnership opportunities, creating a collaborative and ‘cutting edge’ environment for physicians and other healthcare practitioners, and investing in the best global technologies and techniques to help Canadians grow their families. “We believe Anova has an exciting growth trajectory ahead and we look forward to working with Dr. Dixon, and her team, to build a leading company in this dynamic market with growth coming from increased awareness, improved technology, improved success rates, and the rising prevalence of infertility in Canadians,” said Adrianna Czornyj, Partner at PCP. “Anova has the most sophisticated and proficient lab and the highest patient success rates we’ve seen in Canada. Our investment is a recognition of the hard work and dedication of the Anova team over the past three years, led by an entrepreneurial physician CEO with a compelling vision for patient care across Canada. We look forward to helping Anova expand its footprint to help more Canadians access patient-centric fertility and reproductive care. I am proud to be working with an organization dedicated to women’s health and helping families.” “This is a very exciting time for Anova,” added Dr. Dixon. “Assisted fertility can be stressful and disarming. Since day one, we strived to elevate the patient experience by creating a humanizing and caring environment. Now, on the birthday of our clinic’s opening, we’ve received an injection of growth capital to take Anova to the next level. PCP is an ideal partner for us. They have been investing in, running, and growing healthcare businesses in Canada for over 30 years. PCP understands our mission and vision, and they share similar values, including our strong focus on quality and patient care. We endeavored to achieve what was previously deemed impossible in our industry. This culminated in a clinic with a stellar team whose mission was to bring that dream and vision to fruition.” Stuart M. Elman, Managing Partner at PCP, said, “Investing in and supporting game-changing Canadian healthcare businesses is at the core of what PCP does. We are proud to welcome Anova and its team to the PCP group of portfolio companies. Anova is our second investment in our most recent fund, as we continue to execute on our proven investment strategy.” About Persistence Capital Partners Persistence Capital Partners is Canada's leading private equity fund exclusively focused on high-growth opportunities in the healthcare field. With deep healthcare industry expertise, PCP aims to create significant long-term capital appreciation for its investors by identifying and developing attractive investment opportunities in the Canadian healthcare market. PCP has offices in Montreal, Quebec, and Toronto, Ontario. About Anova Fertility & Reproductive Health Anova Fertility & Reproductive Health opened in 2016 as a full-service fertility and IVF clinic. Anova is Canada’s first next-generation embryology laboratory, and is the leader in innovation, education, and communication for high quality patient centric fertility and reproductive care. The team at Anova strives to set the international standard for successful reproductive health and fertility centres, committed to making the right to family accessible to everyone. Anova is known for their culture of support, effective processes and their holistic approach to patient care. Source: Persistence Capital Partners
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Jonas Grossman As president of Chardan, an independent, global investment bank specializing in healthcare, disruptive technologies, and special purpose acquisition companies (SPACs), Jonas Grossman takes a worldwide view of capital markets. He has been head of global capital markets for 15 years, with transactional experience on more than 400 deals. In this interview with BioTuesdays, Mr. Grossman discusses how private healthcare companies looking to go public may benefit from using a SPAC, as opposed to a traditional IPO. Let’s begin with a brief history of Chardan. We are a full-service investment bank, headquartered in New York, and active across North America, Europe, Israel and Asia. We started the business more than 15 years ago, providing a full range of advisory and support services to private and public emerging-growth companies looking to raise capital, or who need help with mergers and acquisitions or strategic alliances. More recently, we have developed a sub-specialty within the healthcare vertical and are probably best known for our leadership position in SPACs. What sets Chardan’s healthcare franchise apart from other investment banks? On the healthcare front, we are committed to identifying and supporting sub-sectors and companies with the highest potential for investment returns by generating real value to society. Our work is built on robust scientific grounding that provides important inputs to fundamental investment research. We have five publishing analysts in the healthcare space covering nearly 100 public companies. Most of our analysts are MDs and PhDs, often with both science- and business-based backgrounds. We also host three of the leading conferences in the genetic medicines and microbiome space. In your experience, what are some drawbacks of the IPO process for healthcare companies? Typically, investment banks advise private biotech companies looking to go public to do a crossover round, or a private investment round, right before an IPO. These rounds are called crossovers because the companies go out and find one or more high-profile public biotech investment funds known for public market investing to participate (or crossover) in the private round. This is because the typical public IPO sales process often leaves little time for public healthcare investors to do their due diligence. The public investors like to rely a bit on the technical due diligence and research done by those high-profile crossover investors. As a result, you end up completing two transactions to go public – the crossover round and the IPO, both of which are done at significant valuation discounts to the ultimate public market trading value. This means that the company raising money may be forced to accept a lot of dilution in their value on the road to becoming publicly traded. What is a SPAC? SPACs are public vehicles that contain cash and a management team searching for a target partner: they exist solely to merge with a private company that wants to go public. SPACs are alternative go-public vehicles to IPOs that offer certain advantages, notably speed, cost, transparency and flexibility. In addition to IPOs, historically, biotech companies have used reverse mergers to go public so your readers may have some experience with that alternative to an IPO. SPACs offer a much better version of that old reverse merger transaction in that they are clean publicly traded platforms, they have no legacy issues, and they have a pool of cash raised in their own IPO. We think SPACs are a much better go-public path than merging with a pre-existing shell. What role has Chardan had in developing the SPAC approach for healthcare companies? Chardan is one of the pioneers of the SPAC industry. Since 2003 we’ve sponsored and managed five SPACs of our own and underwritten and advised over 60 for management teams raising capital. We have the market-leading SPAC practice, having been the number one underwriter of SPACs for the last three years. Within healthcare, in the past 12 months we’ve led three healthcare focused SPACs: ARYA Sciences Acquisition, sponsored by an affiliate of Perceptive Advisors; Health Sciences Acquisitions, sponsored by an affiliate of RTW Investments; and Chardan Healthcare Acquisition, a Chardan-sponsored SPAC. What trends are you seeing regarding SPACs as IPO vehicles? In 2018, one of every five IPOs was a SPAC. These transactions raised $11-billion in total. The latest SPACs have been backed by blue chip companies, private equity and venture capital firms. To us, this means SPACs are entering the mainstream of the capital markets. In the last few months, two of the leading biotech public investment firms have sponsored their own SPAC: ARYA Acquisition and Health Sciences Acquisition. We were underwriters of both deals. These are SPACs backed by industry experts who are now searching for great companies to take public. Given the typical dilution from crossover rounds leading to biotech IPOs, we think the SPAC should become a widely adopted alternative for biotech companies wanting to go public. What are the benefits of a SPAC as an IPO vehicle for healthcare companies? The quick answer is SPACs are efficient, flexible and can enhance value. By merging with a SPAC that’s already public, a company can collapse the crossover and IPO transactions into one transaction. Our data show that late-stage private crossover rounds typically are being done at 30% to 40% discounts to anticipated IPO pricing, and that subsequent IPOs are done at typical 20% discounts to comparable company trading ranges. We believe that a SPAC can provide a valuation uplift to the target company going public on a single-step merger, versus the multi-stage crossover round/IPO. The management and historic investors who have backed the biotech company over time receive public shares right away in the SPAC merger, thus eliminating future IPO risk. Other benefits include the speed of the transaction and the ability to use a highly-structured and confidential marketing process – including the pricing of a transaction – that allows the biotech company to target the right long-term investors to form the core of their shareholder roster, instead of what is often a somewhat disorganized IPO sales process. What would you say to a private company considering going public via a SPAC? There are a lot of efficiencies offered by SPACs, compared with the traditional pathways. Key private company investors are thoughtful, long-term healthcare investors that need a few months to conduct due diligence before feeling comfortable with a company, and the traditional IPO doesn’t lend itself to that. We understand the real need for private biotech companies to get a listing and go public so they can raise capital. They want to get listed with certainty – SPACs provide that without a lot of the uncertainties associated with a traditional IPO. What notable deals has Chardan been involved in? Last year, we were involved in 15 IPO transactions using SPACs, which raised about $2.2-billion. We raised nearly $7-billion when you consider our role in primary, secondary and PIPE transactions over the last couple of years. Earlier this year, we did an $80-million PIPE for MeiraGTX, a gene therapy company, with J&J, OrbiMed and Perceptive as key investors. We were involved in the Moderna IPO, one of the largest healthcare transactions of all time, as part of a broader syndicate. We also led a $115-million series A financing for Passage Bio, a genetic medicines company based on technology from the University of Pennsylvania. What is Chardan Healthcare Acquisition Company (CHAC)? As a leading investment bank to the biotech industry, and seeing SPACs as an effective vehicle for private companies to go public, we sponsored our own $70-million SPAC IPO in December 2018 to establish Chardan Healthcare Acquisition (NYSE American:CHAC). Our goal is to find an exciting private biotech company we can merge with and take public. We’re uniquely positioned to take advantage of our in-house expertise to find disruptive technologies in the areas of gene therapy, gene editing, the microbiome, autoimmune diseases and other fields of biotech we think are exciting. Tell me about Chardan’s senior leadership team. George Kaufman, partner and head of investment banking, has been with Chardan for more than 15 years and has broad experience in SPACs, as well as cross-border and complex transactions. Dr. Gbola Amusa is a partner, director of research and head of healthcare research at Chardan, as well as CHAC’s executive director and chairman. Dr. Amusa brings more than 20 years of Wall Street experience, has covered large-cap European pharma in his previous roles, and now covers more names in the gene therapy space than any other analyst on the street. He has a unique insight into what can really make a winning company. I am also the president and CEO of CHAC. • • • • •To connect with Jonas Grossman, or any of the other companies featured on BioTuesdays, send us an email at editor@biotuesdays.com. via Features | BioTuesdays by Kilmer Lucas http://bit.ly/2ZJfQCj Medical Facilities Corporation ("Medical Facilities," "MFC," or the "Corporation") (TSX: DR), is pleased to announce the appointment of David Watson as Chief Financial Officer, effective immediately. "We are pleased to welcome David Watson as our new Chief Financial Officer," said Robert O. Horrar, President and CEO of Medical Facilities. "David has built an impressive record throughout his career as a leader in finance and healthcare settings. Importantly, he has helped lead the growth and expansion of multi-site and multi-state operations, has significant experience working with physician partners, and he understands the complexities of the payor landscape. We believe David is an excellent fit for MFC and we look forward to his involvement our continued growth." Mr. Watson has 30 years of financial and accounting experience, mostly with multi-site and multi-state U.S. healthcare and institutional operations. Prior to joining Medical Facilities, he was Chief Financial Officer for the Florida-based Clearway Pain Solutions Institute. From 2011 to 2015, Mr. Watson served as Senior Vice President and Chief Financial Officer for National Surgical Hospitals – a leading owner and manager of physician-partnered surgical hospitals and ambulatory surgical centers. His valued depth of industry experience spans key areas of accounting and financial reporting, mergers and acquisitions, scaling organizations for growth, and navigating capital markets. Mr. Watson holds a Bachelor of Arts degree in Economics from the University of Virginia and an MBA in Accounting from Rutgers – The State University of New Jersey. Mr. Watson is replacing Tyler Murphy, who is leaving MFC to pursue other opportunities. "Tyler played a significant role in the expansion of our facilities portfolio and diversifying our revenue stream over the past few years," said Mr. Horrar. "On behalf of the entire MFC team, we wish Tyler all the best in his future endeavours." About Medical Facilities Medical Facilities, in partnership with physicians, owns surgical facilities in the United States. Medical Facilities' portfolio includes controlling interest in five specialty surgical hospitals located in Arkansas, Indiana, Oklahoma, and South Dakota, and an ambulatory surgery center located in California. In addition, through a partnership with NueHealth LLC, Medical Facilities owns controlling interest in seven ambulatory surgery centers located in Arkansas, Michigan, Missouri, Nebraska, Ohio, Oregon, and Pennsylvania. The specialty surgical hospitals perform scheduled surgical, imaging, diagnostic and other procedures, including primary and urgent care, and derive their revenue from the fees charged for the use of their facilities. The ambulatory surgery centers specialize in outpatient surgical procedures, with patient stays of less than 24 hours. Medical Facilities is structured so that a majority of its free cash flow from operations is distributed to the holders of its common shares in the form of dividends. For more information, please visit www.medicalfacilitiescorp.ca. SOURCE Medical Facilities Corporation Centric Health Corporation (the "Company") (TSX: CHH), one of Canada's leading healthcare services companies, announced today that it has divested its retail pharmacy location in Grande Prairie, Alberta.
The total purchase price for the sale was $2.0 million, plus the value of inventory at closing. The Company intends to utilize the net proceeds from the sale towards repaying a portion of its outstanding credit facilities and for working capital purposes. "The divestiture of our Grande Prairie retail pharmacy represents another step in our deleveraging efforts and better positions us to execute on our new strategic direction of establishing Centric Health as the leading provider of pharmacy and other healthcare services to Canadian seniors," said David Murphy, President and Chief Executive Officer of Centric Health. ABOUT CENTRIC HEALTH Centric Health's vision is to be the leading provider of pharmacy and other healthcare services to Canadian seniors. The Company is one of Canada's leading, and most trusted providers of comprehensive Specialty Pharmacy services and solutions to seniors. We operate a large national network of pharmacy fulfilment centres that deliver high-volume solutions for the cost-effective supply of chronic medication and other specialty clinical pharmacy services, serving more than 31,000 residents in over 450 seniors communities (long-term care, retirement homes, and assisted living facilities) nationally. With services that address the growing demand within the Canadian healthcare system, Centric Health's unparalleled national care delivery platform provides significant potential for future expansion and growth. FORWARD-LOOKING STATEMENTS This press release contains statements that may constitute "forward-looking statements" within the meaning of applicable Canadian securities legislation. These forward-looking statements include, among others, statements regarding business strategy, plans and other expectations, beliefs, goals, objectives, information and statements about possible future events, including the expected use of proceeds. Readers are cautioned not to place undue reliance on such forward-looking statements. Forward-looking statements are based on current expectations, estimates and assumptions that involve a number of risks, which could cause actual results to vary and in some instances to differ materially from those anticipated by Centric Health and described in the forward-looking statements contained in this press release. No assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur or, if any of them do so, what benefits Centric Health will derive there-from. SOURCE Centric Health Corporation The "Global In-Vitro Fertilization Market Size, Market Share, Application Analysis, Regional Outlook, Growth Trends, Key Players, Competitive Strategies and Forecasts, 2018-2026" report has been added to ResearchAndMarkets.com's offering. The global in-vitro fertilization market is set to reach from US$ 15,604.7 million in 2017 to US$ 36,854 million by 2026 expanding at a CAGR of 10.1% from 2018 to 2026.
Key Market Movements
Government healthcare institutes and hospitals are actively involved in providing funds to encourage egg and sperm freezing to bring down the rate of multiple pregnancies. Recent technological advancement in in-vitro fertilization technique such as Intracytoplasmic Sperm Injection (ICSI) and Assisted Reproductive Technology (ART) are being employed to increase the success rate of IVF treatment. Culture media are holding the largest market by an instrument in the in-vitro fertilization market. The chief attributing factors are increased research activities in improving the culture media and its capability to preserve sperm cells without compromising on the quality drive the market growth for culture media. Strict regulatory mandates and urging need to maintain optimum sterile condition during IVF treatment will propel the market growth for disposable devices at a rapid pace. Fresh non-donor is reigning the type segment for in-vitro fertilization market on account of the high success rate achieved during the first attempt of the treatment protocol. Frozen non-donor will be growing at a rapid pace in the near future owing to excellent live birth rate, lower miscarriage rate and reduced cases of ectopic pregnancy. Fertility clinics are dominating the end user segment for in-vitro fertilization market. Significant rise in couples opting for ART treatment and Gamete Intrafallopian Transfer (GIFT) drive the market growth for infertility clinics. Hospitals are showcasing steady growth on account of enhanced government funding to provide IVF treatment to poor families and rising public health awareness pertaining to infertility treatment. North America currently holds a 35% share and is the leading regional segment for in-vitro fertilization market. Rising prevalence of infertility and the existence of highly sophisticated fertility clinics drive the market growth in the North America region. As per the research citings of American Society for Reproductive Medicine (ASRM), approximately 11% reproductive population suffer from infertility in the United States. Europe holds a 30% market share on account of proactive government initiatives of providing financial aid for sponsoring the cost incurred during the IVF cycles. The Asia Pacific represents 20% share owing to the presence of a large target population suffering from infertility. Adoption of sophisticated technology and low treatment cost further bolster the market growth in the Asia Pacific region. SOURCE: Research and Markets Dr. Chin Kyu Huh As chairman of ILJIN Group, a leading business conglomerate based in Korea, Dr. Chin Kyu Huh made waves this month, unveiling a proxy contest to elect three independent directors to the board of Aurinia Pharmaceuticals (NASDAQ:AUPH; TSX:AUP) at its annual meeting on June 26. Aurinia’s claim to fame is a Phase 3 drug candidate named, voclosporin, which is in development for lupus nephritis, an inflammation of the kidneys, and could be ready for commercialization in 2021. Voclosporin also is in early development to treat dry eye syndrome and focal segmental glomerulosclerosis. So, who is Dr. Huh? Under his leadership, ILJIN Group has grown to become one of the 50 largest business conglomerates in Korea, with annual revenue of some $3-billion. The group has 28 business affiliates, of which five are publicly traded and 23 are privately held. Since founding ILJIN Group more than 50 years ago, Dr. Huh has played active roles in growing small ventures into established commercial organizations, effectively managing multibillion-dollar commercial operations. He has identified promising new technologies and successfully commercialized them into world-class industrial products. In this interview with BioTuesdays.com, Dr. Huh discusses the history of ILJIN’s investment in Aurinia and a predecessor company, attempts to reform the board and the reasons ILJIN feels Aurinia has failed its shareholders. Let’s begin with a brief history of ILJIN. We were established in 1967 and today, have more than 4,000 employees. In addition to medical equipment and biopharmaceuticals, we are engaged in diverse areas of industry, including heavy electric power machinery, high voltage electric cables, aluminum and steel tubing products, synthetic industrial diamonds, advanced industrial materials, curtain wall and construction, touch panels and electronic devices, compressed natural gas cylinders, information technology, television broadcasting and investments. Can you outline how ILJIN established its current position in Aurinia? We are long-time enthusiastic believers in the commercial potential of voclosporin, having first become involved with the drug through a 2010 development, distribution and licensing arrangement with Isotechnika Pharma, a predecessor company to Aurinia. As part of the transactions by which Isotechnika and Aurinia merged in 2013 and continued under the name Aurinia Pharmaceuticals, we became the largest single shareholder in Aurinia when it reacquired full rights to voclosporin from us. No shareholder has been more committed to Aurinia’s success and shown more patience with Aurinia’s board and management than ILJIN. We currently own about 14% of Aurinia and, to- date, have invested $58-million in Aurinia and the future of voclosporin. But enough is enough. It is abundantly clear that Aurinia shareholders require a board of directors that aligns with them and can guide the company toward successful commercialization of voclosporin. For this reason, we have identified three nominees that will act in the interest of all shareholders to realize voclosporin’s full potential. What do you see as investor sentiment towards Aurinia? While other shareholders have reduced their exposure to Aurinia significantly or exited entirely over the past several years, we have participated in incremental offerings by Aurinia to help it achieve its objectives and voclosporin’s unrealized potential. In 2018 and so far in 2019, we have acquired an additional 827,641 new common shares of Aurinia for about $2.3-million. We have been patient investors. For example, when Aurinia initially announced what were really very positive long-term outcomes from its Phase 2b trial of voclosporin in lupus nephritis patients, the investment community was confused by the company’s corporate communications and reacted negatively. This temporarily put a great deal of downward pressure on Aurinia’s stock price as many investors sold on the news. In contrast, ILJIN held strong. Later in March 2017, after the stock had recovered and then moved to new highs, Aurinia completed a significant public stock offering in which ILJIN participated. Since then, Aurinia has failed to communicate or execute a coherent strategy to maintain its momentum and realize the tremendous potential of voclosporin. Shareholders, ILJIN included, are losing confidence in a board of directors and management team whose interests are increasingly at odds with shareholders, as reflected in rising executive compensation, minimal stock ownership and an egregious lack of independence. There can be no other explanation for the fact that Aurinia’s share price has failed to move materially over the past two years. AUPH: 2 YR Stock Chart What is the objective of seeking three nominees to the board? ILJIN does not want to take control of Aurinia, nor can it with a minority slate of three directors on an eight-member board. [Editor’s Note: ILJIN currently has one representative on the board but is not supporting him for reelection.] We, along with all Aurinia shareholders, have waited patiently for current leadership to not only advance the commercialization of voclosporin, but to do so in a way that shows respect for its public shareholders, in terms of financial discipline, proper corporate governance, and prudent capital raising. Unfortunately, the current board has repeatedly failed to meet these responsibilities, and change is needed. What makes your dissident slate different? We want to give all shareholders more control. Unlike the complicated web of relationships that bind current board members together via allegiances and loyalties that conflict with their duties to shareholders, our nominees have no prior relationships with each other, of any nature, and have been selected because they have the requisite expertise and can be expected to act independently of each other and of ILJIN. You have given the current Aurinia board a failing grade on accountability. Could you briefly touch on the reasons? The Aurinia board has failed to properly manage executive compensation and align itself with shareholder interests. Executive compensation and option grants are bloated relative both to historical compensation and relevant industry peers. Aurinia has failed on other governance matters. For example, there are no stock ownership requirements for the CEO, executive officers and directors, all of whom currently have minimal or no investment in Aurinia, nor risk associated with the company’s success or failure. The existing board has failed to properly ensure independence. Plain and simple, this is not an independent board. It is the former chairman’s legacy of relationships. And finally, the board has failed to properly oversee and control expenditures, leading to explosive increases relative to Aurinia’s peer group. You have criticized Aurinia for failing to realize future expectations. Can you explain? As I have mentioned, Aurinia’s share price has failed to reflect the positive developments to-date for the three target indications in voclosporin’s clinical pipeline. This is both an indictment of past shareholder engagement and investor relations initiatives, as well as an inability to effectively communicate the implications of successes on the future direction of the company. The Phase 2b data release in lupus nephritis is perhaps the starkest example of this. But, it’s not the only one, as demonstrated by shareholder reaction to Aurinia’s announcement of Phase 2 data of voclosporin in dry eye syndrome. Overall, this reflects a failure of the board of directors to develop and articulate a long-term strategy. In addition, Aurinia appears to be recognized in the market largely as a binary investment, primarily focused on its lupus nephritis program approaching commercialization. Those risks are being priced into the current trading price. Aurinia needs to recognize the impediments to share price appreciation and magnify the considerable potential of its pipeline. And finally, Aurinia lacks a long-term strategy and the ability to convey to the market the underlying intrinsic value of the company. Aurinia needs a board of directors ready to take charge and focus their efforts on developing a clear, understandable and achievable long-term strategy that investors and the market can value and place reliance on. Can you explain how executive compensation is not aligned with shareholder interests? While shareholders should pay for quality management, the rampant escalation in total compensation relative to Aurinia’s middling share price performance is hard to reconcile. You might be surprised to realize that since its first full year following the merger with Isotechnika through to and including 2018, total compensation to Aurinia’s five highest paid executive officers grew approximately 23% to over $5-million. Over the same period, there was only modest growth in the share price. Regrettably, this trend has continued. With the hiring of Aurinia’s new CEO, Peter Greenleaf, the base salary for the CEO has gone to $650,000 from $504,000, plus a one-time potential cash bonus of $250,000. In addition, equity compensation increased to 1.6 million stock options from 1.05 million. This represents a single year increase of nearly 30% on salary and more than 50% on equity compensation. Moreover, Mr. Greenleaf currently sits on the boards of four additional NASDAQ- listed companies. Proxy advisors and institutional shareholders have long discouraged this kind of overstretching of time and attention. Shareholders should rightly question why the board has not implemented policies to manage these over commitments. Are there other governance practices that you take issue with? Aurinia has no policy that covers share ownership of directors and officers. Currently, only one director, Dr. Daniel Billen, owns shares of Aurinia, and only 20,000. If directors really believed in Aurinia, their own self-interest should compel them to buy stock. However, it is clear that this group is interested only in receiving cash and free stock. The picture is no better with shareholdings of executive officers. Excluding the new CEO, remaining senior officers collectively hold 726,013 common shares or approximately 0.79% of Aurinia’s outstanding shares as of May 31, 2019. If elected, our nominees will move to implement a more appropriate governance structure, including introduction of mechanisms to ensure the appropriate alignment between the interests of directors and senior officers and those of Aurinia’s shareholders. It’s about time those directly responsible for charting Aurinia’s pathway to success had some stake in the achievement of its objectives. How would you describe the makeup of the current board? Aurinia does not have an independent board; it is a legacy of relationships of former chairman, Dr. Richard Glickman, and his legacy of relationships, which calls into question any expectation of independence. None of our proposed nominees has any prior relationship with any of the current members of the board. Nor do any of our nominees have any prior relationship with each other. Our nominees are qualified, competent and professional and prepared to bring their considerable expertise and independent judgment to bear on matters of material importance to Aurinia. Such independence is absolutely critical in view of the historical poor governance practices of the current board, especially at this very important juncture in Aurinia’s development, as it transitions from a clinical-stage to commercial-stage pharmaceutical company. Has ILJIN had an opportunity to discuss its issues with the current board? Over the course of the past year, we has made numerous inquiries and attempted to discuss a number of matters critical to the proper oversight of Aurinia and the management of its corporate resources. These have included concerns about the escalation of operating expenses without justification; executive and equity compensation; and concerns about board governance and procedures, in general. No serious efforts were made to allay our concerns. While we have been an incredibly patient shareholder, the lack of respect for our concerns and unwillingness to engage has left us with no other choice but to take our concerns to other shareholders and attempt to introduce change through our nominees. What became clear during the course of the preceding year is that the existing governance and nomination committee was only prepared to make token gestures, which cannot effect the changes necessary to reset the governance balance at Aurinia that is so sorely needed. What can you tell us about your nominees? Dr. Robert Foster Dr. Robert Foster, together with a core team, discovered voclosporin in 2002. He was the founder and former CEO of both Isotechnika Pharma, a predecessor to Aurinia, and Aurinia itself. He is one of the most respected pharmaceutical scientists in the world and brings a proven ability in the discovery, development and commercialization of pharmaceuticals. Dr. Foster is currently President, CEO and a director of ContraVir Pharmaceuticals, a NASDAQ-listed biopharmaceutical company focused on the development of pleiotropic drug therapy for the treatment of chronic liver disease. With more than 30 years of pharmaceutical and biotech experience, Dr. Foster has published some 170 scientific papers and has been an honorary professor in the faculty of pharmacy and pharmaceutical sciences at the University of Alberta since 2016. He is named as an inventor on 242 patents, of which 216 are currently active and granted and was named one of Alberta, Canada’s 50 most influence people in 2012. Mr. Soon-Yub (Samuel) Kwon Mr. Soon-Yub (Samuel) Kwon is a senior attorney with, and heads, the International Practice Group of Lee & Ko, a premier law firm formed in Korea in 1977. It provides a full range of legal expertise, notably in the areas of intellectual property and life sciences and pharmaceuticals. Mr. Kwon has extensive experience advising both domestic and international healthcare-related companies over a broad range of transactional and regulatory matters, bringing more than 30 years of legal and business expertise to his role as a director. Dr. Myeong-Hee Yu Dr. Myeong-Hee Yu has been a principal research scientist at the Biomedical Research Institute of the Korea Institute of Science and Technology since 2000. She has more than 30 years of extensive international biotechnology experience, both as a researcher and through numerous advisory and committee roles within government and private industry. Dr. Yu has played a key role in the development of Korea’s biotechnology industry, earning numerous national and international awards, and publishing more than 120 articles in major scientific journals. What has been Aurinia’s policy on gender diversity at the board level? In 2015, Aurinia adopted a diversity policy respecting nomination of female directors. The fact that, four years later, that policy has failed to identify a single candidate for election strongly suggests that it was adopted purely as window-dressing intended to obscure what remains an old boys’ club of Dr. Glickman’s colleagues. The diversity policy is simply a mirage to persuade the proxy advisory firms into providing positive voting recommendations and nothing more. On the other hand, ILJIN has identified an eminently qualified female director in Dr. Yu, with years of relevant experience and expertise that will be immediately beneficial to the board and unencumbered by any conflicting loyalties either to ILJIN or Aurinia’s prior chairman and CEO. Did any negotiations on a compromise slate of directors take place after you delivered Aurinia your proxy statement? We have been a long-term shareholder of Aurinia’s stock and see no change for the foreseeable future; so preserving an amicable relationship while addressing our concerns was as much in our interest as Aurinia’s. Nonetheless, and to our great disappointment, we received no contact whatsoever from Aurinia after we delivered advance notice of our intention to nominate our slate of nominees. As it turned out, Aurinia informed Dr. Glickman, its former chairman and CEO, of our confidential advance notice and he contacted Dr. Foster, one of our nominees, to berate him for agreeing to stand for election. If you need confirmation as to the patriarch to whom the Aurinia board remains beholden, you need look no further. Source: ahealthieraurinia.com Cautionary Note: While neither BioTuesdays Publishing Corporation nor its parent, Kilmer Lucas Inc. (collectively, “BT/KL”), have any business relationship with ILJIN Group, past or present, BT/KL was engaged by Aurinia Pharmaceuticals Inc. and predecessor company, Isotechnika Pharma Inc., for select investor relations services from October 2011 through June 2014. In addition, BT/KL is currently engaged to provide select investor relations services to ContraVir Pharmaceuticals, Inc. Dr. Foster, one of ILJIN’s nominees to the Aurinia Board, serves as President, CEO and a director for ContraVir. So, while BT/KL is not conflicted, it would be fair to say that it is biased. • • • • •To connect with ILJIN, or any of the other companies featured on BioTuesdays, send us an email at editor@biotuesdays.com. via Features | BioTuesdays by Kilmer Lucas http://bit.ly/2Y3iDpP Andrew Grieve, CEO Despite being a new entrant in the cannabis market, Zenabis Global (TSX:ZENA) is making huge strides to become one of the largest licensed producers of medical and adult-use recreational cannabis in Canada. “Building on our proven agricultural heritage and cultivation excellence of our predecessor company, Bevo Agro, we are investing in initiatives that will grow our production to meet demand across our key markets and enhance value for our shareholders,” Andrew Grieve, CEO, says in an interview with BioTuesdays. “Looking ahead, we expect further growth from our cannabis operations, continued expansion of our facilities, and significant increases in cannabis revenue," he adds. Zenabis has production facilities at Langley and Delta, both in British Columbia; Atholville, New Brunswick; and Stellarton, Nova Scotia, where current cannabis production capacity of 13,400 kg is expected to vault to 131,300 kg during the third quarter of 2019, making it one of the top 10 producers in the sector. Ultimately, if all four facilities are fully built out and converted to cannabis production, they would have a design capacity to yield approximately 479,300 kg of dried cannabis annually. The company also has two greenhouses at Aldergrove and Pitt Meadows, both in British Columbia and earlier this month, received an industrial hemp production license from Health Canada. It intends to grow hemp on surplus land and in greenhouses off-cycle from other crops. "We have successfully undertaken a range of corporate development initiatives in the past several months, including securing key supply and distribution arrangements and additional licenses and approvals; expanding our product offerings across Canada; developing relationships in Europe; and obtaining financing to support our rapid growth,” Mr. Grieve contends. The strategy seems to be working. In the first quarter of 2019, Zenabis generated net revenue of $11.6-million, consisting of $4.1-million and $7.5-million in cannabis and propagation segments, respectively. That compares with revenue of $3.4-milion for the fourth quarter of 2018. The company had not yet begun cannabis sales in the year earlier first quarter. In the latest quarter, Zenabis began a transition to an alternative growing approach. “The first harvest using the alternative approach outperformed design capacity by 47.6%, Mr. Grieve says, adding that the company’s monthly production reports also represents “our approach to transparency because we are confident of delivering our expansion goals on time and on budget.” Zenabis is forecasting second quarter revenue from the plant propagation business to be in a range of $16-million to $18-million, and net revenue from the cannabis business to be in the range of $10-million to $12-million for total second quarter guidance of $26-million to $30-million. Mr. Grieve points out that net cannabis revenue does not yet include any meaningful impact from the production of oil products, as the third-party supply chain for oil products, including post-processing, adds a considerable amount of time from cultivation to realization of revenue. He figures this time differential should be significantly reduced when post-processing and additional extraction capacity at the Zenabis Delta plant is completed. “Currently, a significant amount of existing cannabis inventory is allocated to the third-party oil processing supply chain." In April, the company’s output exceeded design capacity by more than 31% and overall cultivation output was 63% greater than forecast, he contends. For three harvests in May, Zenabis exceeded design capacity by 28%. “With an additional harvest moving from June into May, we anticipate further strong total cultivation performance in May relative to forecast,” he notes. “This outperformance demonstrates the capabilities of our experienced cultivation team, and the quality of our facilities across Canada." The company’s existing cannabis brands include Zenabis, a medical brand of dried cannabis, with near-term oil products and future products, such as food and hemp products in development. Founders Reserve is Zenabis’ premium recreational brand and Blazery is a niche recreational brand of pre-rolled cannabis. The company, which also has additional recreational brands in development, with a focus on cannabis oils, sprays, food products and beverages, recently launched a line of soft gel capsules through its online and retail sales channels. Zenabis also is developing internally and with partners cannabis-infused edibles; flavored and sparkling water and other non-alcoholic beverages; topical creams; health and beauty products; vapes and do-it-yourself kits. Sales of those products are subject to new Health Canada regulations, which are expected in the fall. Mr. Grieve says that during the first quarter of 2019, Zenabis entered into supply arrangements with provincial distribution boards in Alberta, Manitoba, Quebec and Prince Edward Island, expanding its supply arrangements to a total of eight provinces and one territory. Distribution in Ontario is slated to begin in October. Another milestone achieved in the first quarter was entering a supply arrangement for its medical cannabis products with Shoppers Drug Mart, Canada’s largest pharmacy chain with more than 1,300 stores. Zenabis distributes its cannabis oils through Pharmasave, a 650-store pharmacy. Zenabis also is expanding its international distribution operations. The company has signed a non-binding letter of intent with a European distributor to supply 2,400 kg of dried cannabis equivalent a year, with the potential to provide 6,000 kg, starting in 2020. In Germany, Zenabis has entered into a binding term sheet for a three-year supply arrangement with Farmako, a leading pharmaceutical research company. Under the accord, Zenabis would receive biosynthetic cannabidiol (CBD) for sale in the Canadian market from Farmako, and provide medical cannabis to Farmako for sale in Germany. Zenabis also has signed a non-binding letter of intent to supply cannabis to a chain of 15 pharmacies in Malta along with conditional approval to develop a production and processing facility in Malta. And when cannabis is legalized in Panama and Paraguay, Zenabis has joint venture plans to annually supply up to 6,000 kg and 180 kg, respectively, to its partners. “Our team has 100 years of industrial-scale cultivation expertise and proven executive capabilities, and with our ongoing expansion, we are demonstrating our goal to be expert cultivators,” Mr. Grieve contends. • • • • •To connect with Zenabis, or any of the other companies featured on BioTuesdays, send us an email at editor@biotuesdays.com. via Features | BioTuesdays by Kilmer Lucas http://bit.ly/2MGgTRV Spring Fertility (“Spring”), a leading provider of fertility care in Northern California, today announced it has received a significant growth equity investment from Wildcat Capital Management, a New York based family office. Since opening in 2016, Spring has quickly become the premier fertility center in Northern California and one of the fastest growing fertility centers in the country by achieving consistently superior clinical results with high patient satisfaction scores. Spring anticipates using this investment to fuel further scientific innovation and expand access to its care platform in the Bay Area and across North America. Spring currently serves patients from offices in San Francisco, East Bay and Silicon Valley. Advanced procedures are performed in an innovative, state of the art lab which deploys unique, customized technology that more accurately replicates the body’s internal environment in the lab.
“We are proud to partner with Spring as it advances the science of fertility and delivers the highest-quality care possible. Spring’s focus on innovation and their relentless pursuit of improved clinical, lab, and experiential standards uniquely position it as a leader in the fertility sector.” Spring was founded by Drs. Peter Klatsky and Nam Tran, as they sought to change the experience and outcomes for patients seeking fertility care. Drs. Klatsky and Tran will retain majority ownership post-transaction. “Wildcat is excited to support the Spring team as they continue to re-invent the patient experience while providing exceptional clinical outcomes,” said Drew Tarlow, Principal at Wildcat Capital Management. “We are proud to partner with Spring as it advances the science of fertility and delivers the highest-quality care possible. Spring’s focus on innovation and their relentless pursuit of improved clinical, lab, and experiential standards uniquely position it as a leader in the fertility sector.” “After years of directing research at the best academic centers in the country, it’s rewarding to see those innovations quickly translate into patient care,” explains Spring’s Scientific Director Nam Tran, MD, PhD. “We have been able to accomplish several ‘firsts’ in our lab and are excited to use this investment to further develop our scientific research program and continue to innovate novel therapeutic options to help our patients. Our unique egg to embryo environmental controls have reduced attrition by over 25% from fertilization through embryo development. This means a significantly higher chance of success with fewer disappointing outcomes.” “We exist to help our patients pursue and achieve their goals. Our desire to innovate while improving access and quality aligns with Wildcat’s patient, long-term approach,” said Dr. Peter Klatsky of Spring Fertility. “With Wildcat’s investment, Spring will have the resources to continue expanding access while investing in our clinical and technological capabilities to create a differentiated and superior experience for our patients, employees, and physicians.” Bass Berry Sims advised Spring Fertility on the transaction, and McDermott Will & Emery, Alvarez & Marsal, Aon, and Avalere advised Wildcat Capital Management. About Spring Fertility Spring Fertility was founded by leading physicians with the goal of redefining the reproductive and fertility patient experience to improve comfort, communication and care while advancing scientific excellence. It quickly became the premier fertility platform in Northern California, and one of the country’s fastest growing. The Company was founded in 2016 by Peter Klatsky, MD, MPH and Nam Tran, MD, PhD and provides a broad range of fertility treatments including IVF and egg freezing. Spring’s state-of-the-art fertility lab is located in San Francisco and the company operates patient centers in Oakland and Redwood City. Source: Spring Fertility Allen Davidoff, Co-Founder, President and CEO XORTX Therapeutics (CSE:XRX; OTCQB:XRTXF) is awaiting several key milestones during the next few months as it works to redefine how progressive kidney disease is treated. “Our two lead programs are targeting uric acid lowering, which has been shown to have an important clinical effect in this disease,” Allen Davidoff, co-founder, president and CEO, says in an interview with BioTuesdays. “We have a strong IP portfolio and well established proof-of-concept for our XRx-008 to treat autosomal dominant polycystic kidney disease (ADPKD), an orphan market, and XRx-221 for Type 2 diabetic nephropathy (T2DN), a large market,” he adds. In August, XORTX expects to receive top line results from a Phase 2a study of XRx-221 in T2DN, under a co-development deal with Japan’s Teijin Pharma. XORTX also is expecting a European patent for its diabetic nephropathy program and is readying strategic discussions. ADPKD is a life-threatening genetic disease, where fluid-filled cysts develop and enlarge in both kidneys, eventually leading to kidney failure. More than 50% of people with ADPKD will develop kidney failure by age 50. Once a person has kidney failure, dialysis or a transplant is the only option. Dr. Davidoff explains that elevated uric acid is a bad actor in kidney disease. There is a substantial body of independent Phase 2 clinical trial evidence that suggests high levels of uric acid can lead to high blood pressure, vascular damage, kidney inflammation, fibrosis, decline in the kidney’s filtering capacity and high levels of protein in urine. Uric Acid (UA): a Bad Actor in Kidney Disease A peer-reviewed study published in BMC Nephrology in 2014 found that reducing uric acid levels in ADPKD patients increased kidney-filtering capacity by some 175% after one year, effectively reversing the course of the disease. XORTX’s patent portfolio covering uric acid-lowering agents used in progressive kidney disease extends to as late as 2037. Dr. Davidoff says that recent discussions with the FDA about XORTX's orphan drug program in ADPKD resulted in an accelerated clinical development program, with guidance that the program could advance to a pivotal Phase 3 registration trial under a special protocol approval (SPA). “The FDA discussion that clarified this approach, effectively halved the development time and cost for the ADPKD program and accelerated the opportunity to have a marketed drug for ADPKD patients within four years,” he adds. Dr. Davidoff also indicates that more than 10 international specialty pharma companies have reached out to XORTX, expressing interest in licensing the ADPKD program a variety of jurisdictions. XORTX’s XRx-008 drug candidate is a proprietary formulation of Oxypurinol, which already has an established safety and efficacy data. “Our formulation of XRx-008 has three times greater bioavailability than Oxypurinol alone, enabling increased oral dosing ranges, while its improved tolerability increases compliance and supports chronic dosing,” he contends. There are some 120,000 ADPKD patients in the U.S. and, at a projected revenue per patient of $30,000 a year, XRx-008 has the potential to generate annual peak sales of nearly $2-billion in the US alone. At the beginning of 2020, XORTX plans to conduct a one-month bioavailability study with XRx-008, ahead of initiating a pivotal study under a SPA in the first half of 2020. Data would read out in 2022. “If we can demonstrate slowing or reversing the decline in the rate of kidney filtration by 35% to 40%, we would reach the FDA’s approval threshold,” Dr. Davidoff suggests. Currently published pilot trials in ADPKD and T2DN both show clinically meaningful benefit for individuals far in excess of this threshold. XORTX intends to file an NDA for XRx-008 under accelerated review at the beginning of 2023 and achieve marketing approval one year later. The company's second program, to slow or even reverse progression of diabetic kidney disease, is in a co-development deal with Teijin Pharma that grants XORTX exclusive global rights to XRx-221. “We are indeed honored that Teijin has agreed to allow the XORTX Therapeutics’ development team act as the custodian for this next generation uric acid lowering drug,” Dr. Davidoff says. The agreement provides exclusive global rights to develop the drug for kidney diseases, including T2DN. XORTX views this milestone as a validation of the expertise and patent protection that XORTX provides. Dr. Davidoff says that following Teijin’s ongoing Phase 2a diabetic kidney study, which reads out in August, the company hopes to begin a Phase 2b clinical trial with some 400 T2DN patients to demonstrate the drug candidate’s ability to improve glomerular filtration rate – XORTX’s preferred, and an FDA approvable endpoint. “This potent, next generation uric acid-lowering drug candidate has the ability to re-define how T2DN is treated in the future,” he suggests, adding that a positive read out in August should “further solidify XORTX’s position as a leading global kidney disease drug developer.” Dr. Davidoff also points out that controlling uric acid levels in diabetes patients may delay progression to end-stage kidney disease, where patients must be on dialysis for four hours a day and only 50% of patients survive two years. There are no approved diabetic nephropathy drugs to treat progressive kidney disease due to uric acid injury, he notes. “A therapy that maintains and extends kidney health can redefine kidney disease treatment in the future.” Dr. Davidoff says the company’s treatment for progressive kidney disease, XRx-221, is a next generation xanthine oxidoreductase inhibitor, targeting T2DN. “Testing to date suggests that the drug candidate’s high potency inhibits production of uric acid in a large percentage of individuals, decreasing and maintaining serum uric acid levels in low-to-normal target range.” A study by Spanish researchers published in the peer-reviewed American Journal of Kidney Disease in 2015 showed that after seven years, decreasing serum uric acid in chronic kidney disease patients had the potential to halve the number of individuals who needed dialysis, and cut hospitalizations for renal events by 70%. Dr. Davidoff points out that in the U.S., the government covers the $90,000 average annual cost per patient undergoing dialysis. There are now some 10 million people with diabetic nephropathy in the U.S., with forecasts growing to 17 million by 2035. “And with 700,000-to-800,000 people starting dialysis each year, the savings to the health care system would be in the billions of dollars,” he adds. XORTX hopes to begin a Phase 2b trial with XRx-221 in 400 T2DN patients in 2020, with data expected at the end of 2022. If the study were successful, the company would begin two Phase 3 trials in 2023, releasing data in 2024 and 2025, which could lead to U.S. marketing approval in 2026. The two Phase 3 pivotal studies for the T2DN program are expected to enroll 1,200 patients each. Along with the Phase 2b study in 2020, the company also plans to conduct a pilot adolescent study with individuals aged 16-to-25. Data should be available by mid-2022. “This group of individuals is particularly at risk of uric acid injury to their kidneys. Recent studies suggest they may respond well to uric acid lowering, so we would expect data to provide some guidance how to proceed to our pivotal studies the following year,” Dr. Davidoff suggests. • • • • •To connect with XORTX, or any of the other companies featured on BioTuesdays, send us an email at editor@biotuesdays.com. via Features | BioTuesdays by Kilmer Lucas http://bit.ly/2QILWek |
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