no one trusts or believes you peter

Quote

corporatefile.com.au
In July you announced the conclusion of your litigation against GSK through
mediation. The agreement provided for a $20 million payment to Biota, with
each party bearing its own legal costs. Given you claimed losses of $564
million to $704 million in relation to GSK’s failure to use its best endeavours
in the development of Relenza, why did you settle for a much lower amount?
CEO Peter Cook
On 27 May, the Supreme Court set aside the previously scheduled trial date of
4 August. After that, the view of our legal advisors was that a trial was
potentially 12 to 18 months away and perhaps even as late as 2010. Such a
delay would necessitate further costs, potentially well in excess of the total
incurred to date. Furthermore, the trial itself could be expected to run for six to
nine months, with additional costs associated with that, not to mention the
possibility of additional costs and time associated with any appeal. To see the
process through, we were looking at a funding level of up to $100 million. In
those circumstances, we saw that settlement best met our objective of
balancing the risk and cost the litigation posed with the expected rewards.
The claimed losses you mentioned have caused considerable confusion. They
were a damages claim, and were for interlocutory purposes before the court
and most closely resemble a whole-of-life valuation. They were never a
‘settlement amount’, which many thought them to be. They were an estimate
of the total royalty stream from Relenza, in an ideal, competitive market, from
the date of launch to the date of termination of the last patent.
There are a number of reasons the settlement amount would never even closely
approach those numbers, including that the Relenza patent still has six years
before expiry, on which no royalties have yet been paid. To compare the
damages claim figure with the settlement outcome you’d value the latter by
adding $20 million for the settlement to the $60 million of royalties received to
date, plus an estimate of the next six years’ royalties of $120 million to $240
million (based on the last two years), a total of potentially $320 million or
more'

BUT IN THE LETTER TO SHAREHOLDERS DATED AUG 08 YOU SAID

'The litigation process involved a number of stages: initial pleadings (details of claims by Biota and defences by GSK), discovery (identification and supply) of relevant documents predominantly held by GSK, provision of detailed expert and lay (employee) witness statements, mediation and ultimately, in the case that mediation failed, a trial. The litigation covered events back to 1999, the year of Relenza’s global launch. The discovery process was protracted and very complex. In the course of discovery, GSK provided our lawyers with over 3 million pages of documents.
During this process, settlement proposals emerged with the last in 2006 and still in the early in the discovery stage of the proceedings. Those proposals and other developments strengthened Biota’s view of its case and encouraged the company to continue with further discovery of GSK’s documents. Biota’s position at that time was that its case was tracking positively.
More recently, the market performance of Relenza improved significantly. The emergence of pre-pandemic Government stockpiling markets for avian flu antiviral drugs increased global demand for antivirals considerably. As well, it appeared that Relenza’s share of the stockpiling market would grow to at least 20 per cent from its very low starting point. This change in performance was significant in relation to the case because it lead to increased royalties from Relenza sales, which would have to be offset.'

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How can you say on one had you were confident of achieving a higher figure but then on the other hand say that the higher figure was never achievable? Peter, how much better did you want if you were offered approx $120 million to settle in 2006 and according to you the claims of over $564 to $704 million which you stated earlier you were holding out for were never going to be achieved and were not the realistic claim amount that you were touting to shareholders since then. So, it would be reasonable to say an adequate amount to settle for would be between say $100 and $200 million, the very region of the offer you rejected. No one trusts a word that comes out of you mouth anymore Mr Cook, or at least I don't. It was stated that an important milestone in this financial year is to re-appoint the directors, but an even more important milestone would be for them to graiciously step down or be removed and competent directors take their place.