the alcholics trial, page-36

directors were buying whilst we were selling to them, they had info they wouldnt share, shame on them, just typical of the spec stocks listed on the asx.




Solagran directors bought up stock


Email Print Normal font Large font AdvertisementVanessa Burrow
February 15, 2008

DIRECTORS of biotechnology company Solagran were buying up stock for more than a year before they released crucial details of a successful clinical trial.

Yesterday, Solagran told the market it had obtained "unexpected" excellent results with its drug Ropren in patients suffering from chronic alcoholism or drug addiction.

The trial took place during 2006 and 2007. Solagran said the board had embargoed release of written information until the company had secured intellectual property rights. "The company has been in possession of these results for some time," Solagran told the Australian Securities Exchange.

Since the start of last year, executive chairman and principal founder Vagif Soultanov has repeatedly increased his shareholding, taking it from fewer than 500,000 shares to 10.8 million.

Executive director and co-founder Denis Kilroy has increased his holdings from 6.6 million shares to 9.5 million.

Late last month, both men added to their indirect holdings, held by a related company, Solamind. And yesterday, they declared the purchase of a further 72,022 ordinary shares at a cost of $64,504.

Solagran shares have risen from 35¢ at the start of last year to 92¢ by yesterday's close. In the past year they have sold as high as $1.55.

Mr Kilroy said yesterday's announcement was extremely significant because it meant Ropren was effective in dealing with chronic liver disease, dementia and also the degenerative aspects of chronic alcoholism and drug addiction.

"That's a pretty big market worldwide," he said.

He also emphasised the company's need to protect its intellectual property.

"The substance is a natural substance, it's not a synthetic drug that we can own the molecule," Mr Kilroy said. "We need as much intellectual property protection as we can to ensure that someone else doesn't … try and do the same thing."

RMIT school of accounting and law associate professor Kevin Adams , said the situation created two ethical questions.

The first was how to balance the market's right to information with the need to protect intellectual property.

"The other dilemma is, should there be trading in shares by directors and so on when they're privy to information that is obviously going to have a potentially significant impact on the share price?" he said.

"Obviously that's an ethical question there, that really they shouldn't be trading when they're privy to information that the market's not aware of."

But Mr Kilroy rejected any suggestion of impropriety.

"Our shareholders have known that (an) announcement has been coming for over a year because we mentioned it existed at an AGM about a year ago," he said. "But we weren't prepared to release any written information on it until we had the patent locked away.

"Yes, the directors are continually buying … but we always know that the market is as fully informed as it can be."

An ASX spokeswoman said she could not comment on the specific case, but said the exchange was required to look into any potential breaches of continuous disclosure rules.

ASX listing rules require companies to disclose immediately information that is likely to have a material effect on the price or value of their securities. Exceptions are allowed in some circumstances.

An Australian Securities and Investments Commission spokeswoman said she could not comment on operational issues.