Quintis has supplied over 1,200 kg of EISO to Galderma under the supply contract, with all supplies occurring in the 2014 and 2015 calendar years. In March 2016 Nestlé entered into an agreement to acquire a majority stake in Proactiv, the world’s leading non-prescription anti-acne brand. Quintis has not supplied any EISO to Galderma in FY2017 and EISO sales to Galderma have not been factored into the Company’s sales forecasts for FY2017.
The Board of Quintis was advised late yesterday that on 16 December 2016, Santalis and Galderma entered into an agreement that terminated Galderma’s licensing and supply arrangements with Santalis with the termination to take effect from 1 January 2017. Under the termination agreement, Galderma retained an option to reinstate the license and supply arrangements on or prior to 1 July 2017. Prior to yesterday’s advice, the fact and details of the contract termination had not been provided to current members of both the Board of Quintis and its senior management (outside of Santalis). Quintis Chairman, Dalton Gooding, said: “It is unacceptable that the current Board was not made aware of the contract termination when it took place. We are taking immediate and appropriate measures to ensure that this type of communication breakdown is not repeated.”"
Galderma hadn't bought any product since 2015, and QIN hadn't factored any sales to them whatsoever in FY2017 (so since June 2016)!
So the current board
- claims they were unaware that Galderma had terminated the contract given no orders for at least 18mo
- claims that Galderma ceasing to order product wasn't in itself material
- that a major subsidiary's management withheld information from the board that was clearly material
Whilst it seems that the board is alleging that Frank Wilson, the supposed bidder for the company:
- knew that Galderma had ceased ordering product when he signed the ASX query response which didn't provide this information
- withheld the information from current board members
This seems like criminal activity, and it took a short seller to expose it. I'm sure you will all join me in congratulating and thanking Glaucus for exposing this.
