Ann: Notification of buy-back - NEU, page-59

NEU has not stated any reason for the buyback. Three or four million shares is not a sufficiently large buyback to have any strategic purpose. As there is clearly no strategic reason for it, then what is the reason? Why do it? What problem is it intended to solve?

If the buyback is intended to prevent shortselling, then when it is exhausted shorting will simply resume, even more so if the SP has risen.

NEU's SP appears to be easily manipulated, as evidenced by a relatively high number of apparently automated trades. One of the reasons why some stocks are easier to manipulate than others is because of a relatively low number of shares in circulation. The buyback will make manipulation even easier because it will reduce the number of shares.

Small pharma is a risky business to be in. If something negatively impacts NEU's Daybue revenues, for example if a severe side effect emerges after longterm dosage, then the Daybue revenues will dry up and NEU could eventually be forced to raise cash to continue funding its various trials, depending on how much of its cash it has squandered. An adverse reaction would also cast doubt on NEU's pipeline. Atm, NEU is getting interest on the $50m. In a couple of years time it might have to borrow $50m at more than double the rate of interest.

If anybody is wondering why some market players appear to be selling NEU, then look no further than an apparently pointless buyback that could damage the company.

The buyback in my opinion is a squandering of NEU's strong cash position. Management has questions to answer. Messaging needs to be improved. I have reduced my holding because in my opinion, in addition to the unavoidable and unknowable risks, there is an unnecessary risk that NEU may be lacking in some financial competencies that I consider to be essential for any listed company.


(Other reasons why some players are selling may be related to risk. For example, NEU's management did not have answers to all the FDA's questions at their recent ph3 meeting, and apparently the outstanding issues are still not resolved, which is a risk because it does not reflect well on the skills of NEU's management. For example, NEU is considering going it alone with ph3 trials, which many regard as a big risk because NEU has not performed ph3 trials before. Another risk is that poor quality of communications in some companies has sometimes been known to camouflage something negative that the market finds out about later. Any bad news atm could send the SP below $10.)