Ann: ACW Science Forum today - Preparing for commercialization, page-44

in reply to @revolution

Keeping an open mind behind their reasons to exit, I thought I'd walk through their timeline...

• They came on board when Bill Ketelby was around. Invested $A10m at 5c on the day the interim results were released for Xanadu in mid-2018. So clearly Alzheimer's was the focus of their investment
• Xanadu results came out in mid-2019. Other substantial holders like FIL sold a heap on this news and AEF exited straight away. But BVF stayed on board.
• They put another $500k in at 2.2c in the Oct 2020 capital raising. Use of these funds was mainly aimed at XanaMIA and to a lesser extent FragileX.
• Bill left in early 2021 and Steve came on board
• BVF put another $1m in at 13.5c at the end of 2021. So clearly had confidence in Steve at that stage. The strategic update that was part of the capital raising confirmed that depression was added as the third focus. XanaMIA was obviously still the main focus. And FragileX was still lurking in the background.
• This was the last capital raising that they participated in
• The next two capital raisings were at 2.5c and at that point they were probably pissed that their $1m they put in at 13.5c was down so much and were overall down over $5m on their investment. So obviously not keen on putting any more funds in.
• The strategy of the company wasn't the reason for not participating in those raises because the use of funds was for XanaCIDD (depression) and XanaMIA which is in line with the same strategy from the 13.5c capital raising that they participated in
• XanaCIDD results came out in Aug-2024
• They started selling out in Nov-2024

So thinking logically there's only a few other specific reasons I can see that would trigger their decision to exit:

• The diversified focus of depression and Alzheimer's - there's every possibility that they either weren't impressed with the depression data, or weren't happy with the decision to put it on the back burner. It's possible that no longer having two shots on goal was a concern for them. And bearing in mind the last $1m they put in was based on depression being a main focus.
• Shifting timeline for starting the XanaMIA trial - there's no hiding the fact that this trial pushed back significantly. But the changes made to the trial design on the back of this is invaluable and I don't think anyone in their right mind can disagree. We've reduced the number of patients and trial duration, but most importantly incorporated the biomarker study findings to target the right patients and give us the best chance of success. And I think BVF would have been well aware of the delay ahead of time, so I think if this was the reason for their exit then they would have sold out long ago and not when we're right in the middle of the trial with the pace starting to pick up.
• Loyalty to management - they were supportive of Bill. But his exit and Steve coming on board didn't seem to change their support for the company. They still put $1m in Steve's main capital raising. But maybe some promises made as part of this capital raising might have left a sour taste in their mouth when they look at the share price performance since then.
• Confidence in the science - other than the XanaCIDD results ultimately leading to putting this focus on the back burner, I can't see anything that would lead BVF to lose confidence in the probability of success for XanaMIA based on the drug itself. And I don't think backing another horse or the competition from GLP-1's for example would factor into their decision. So I'm ruling this one out.
• Delay to the release of full results for XanaMIA - it's taken me a while to get to this point but I've gone back and looked at what ACW reported in our recent quarterly reports. Through 2024 it went from results anticipated in H2 2025 and then out to mid-CY 2026 by the end of the year. Coincidentally their selling started right after our Oct quarterly report came out which confirmed the mid-CY 2026 timing for full results.

Either way I'm comfortable that their exit has nothing to do with our science or the probability of success for XanaMIA and that's what it all comes down to for the value of the company.

I'm looking forward to the interim results at the end of the year. And I wouldn't be suprised to see another substantial holder added to the register then in combination with a capital raise to see us well funded until full results.

Just hoping that the selling dries up so the price can recover from the last week or so. Would feel a lot better to see the price consolidate in the 3c - 4c range for a bit. Not a lot management can do at the moment to change things. Just a matter of waiting for results.