CYP (ASX) Ann: Appointment of Ms Janine Rolfe to the Cynata Board

Originally posted by JB1975: ↑

I see no mention of biotechnology experience in the announcement regarding Ms Rolfe. "multiple sectors, including highly regulated industries and complex global businesses" doesn't mean she has biotech experience let alone stem cell experience or FDA experience or even biotech regulatory experience (in the US or Australia or Europe of anywhere). If she did have those I think they'd have made for things worth mentioning.

Knowledge in the biotech sector or stem cell sectors would been a good combination with contract writing and deal formulation if she has contract writing (most lawyers get that in law school) and deal formulation skills.

I see "Janine's extensive experience in M&A, governance and growth businesses."

This announcement is dated 30 August 2022 and it says "the appointment of Ms Janine Rolfe as an independent Non-Executive Director" (is) "effective 1 September 2022."

I think Ms Rolfe may be being brought in, in part, to deal with low ball take over offers. I hope its not to seek out low ball take over offers (such that directors that came to the company after the Sumi offer can claim a victory at multiple the low points of the price the company share's have fallen down too) because it should never be forgotten that CYP already had a $2 offer. Years ago. And the company has never admitted that it has lost value due to poor management since. To the contrary company announcements suggest the view of the company management is that is has gained inherent value over time not lost it.

According to the announcement of today (in bold)

Ms Rolfe said:

"I am delighted to be joining Cynata at a time when the Company's robust clinical product development pipeline is advancing rapidly, and the Company's commercial and strategic opportunities continue to progress. Cynata is the global leader in the development of induced pluripotent stem cell (iPSC) derived cell therapy products and I am very excited to be involved in the next stage of the Company's growth".

My questions for MS Rolfe would be 1) When you say at a time when the Company's robust clinical product development pipeline is advancing rapidly - is this a statement that covers the period in which the MEND trial was essentially announced to be discontinued? Because that looks to me like a decline in the development pipeline and quite recently - indeed the annual report still had traces of the MEND in it like the chairman thought we had an ARDS trial on going. But CYP's ARDs trial was in effect part of the MEND trial. With MEND off, sepsis and COVID19 and ARDS are less in the pipeline now than recently it seems, recently we had the prospect of getting some results (unless we didn't and the company knew we didn't). So what is your timeframe of reference for "when" "the developing pipeline is advancing rapidly? And what do you consider to be rapid?

2) How do the Company's commercial and strategic opportunities continue to progress in your view? Please recognize that there was a $2 takeover offer and that it is not progress to be dealing with or accepting takeover offers at less than that. That is regress. Not your fault if the company regresses before you join it. But progress is progress and regress is regress. I think you might be brought in with performance options way below $2. And that the board might consider takeover offers below $2. But that isn't progress over $2 - lets be clear about that please.

3) By what standard do you regard Cynata as the global leader in the development of induced pluripotent stem cell therapy products?

Dr Geoff Brooke, Cynata's Chairman, said :

"Cynata continues to build a team with proven leadership capabilities and with Janine joining the Board of Directors we welcome a new skill set and contemporary outlook. Janine's extensive experience in M&A, governance and growth businesses will add a new depth of talent to the Company at a very exciting time in our maturation. ..."

Dr Brooke - I'd also like to point out that a $2 Sumitomo offer was reported to have been made for you to recall. Because I'm also wary that you too might consider getting less than that from here to be a great victory. It's nearly a 6 bag from here. And a near 6 bag looks like quite an achievement for those that come in later and get it. But that is the standard of where the value once was. You haven't replaced or removed any of the directors for seeing the share price drop to here. Adding new directors to share in a takeover offer below what was previously offered will not be a great achievement in my eyes.

My questions to you would be - 1) "what good is proven leadership capabilities in other irrelevant areas if its getting added to a proven track record of value loss in this relevant area of iPSC-MSC commercialisation? 2) If CYP's board contains members with a non contemporary outlook - why are they still there? Why are you adding expenses to the board by not cutting costs?

I do not believe it would be fair, equitable or just for directors who have overseen the loss of value of CYP shares to hang around for a cheap payout via a takeover offer below what CYP already received.

A takeover typically replaces the management. You and Ms Rolfe might fairly benefit from takeover premiums (to current price or price on when you took up your directorships) if you've add valued - but I don't see any justice in allowing directors that have overseen loses in value hang around for a cheap takeover below what was once offered.

Just my opinion.

Expand

I don't really get the negativity around this appointment. Lawyers are needed in every industry, particularly when you're negotiating complex licensing arrangements potentially across more than one indication. In fact, our legal expenses were up $150k last FY, so appointing someone to the board for 1/3 of the cost sounds like sound financial management, no?

My opinion is that this appointment is mainly to do with M&A. Not just potentially warding off (or attracting) suitors for Cynata, but also the potential acquisition of the Tekcyte technology, should the DFU trial go well.

I don't think the sins of the past should be forgotten (the lost months of 2019 with Sumi's $2 offer, the director loans debacle). However, you do need to assess things from the perspective of the present, rather than the past.

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Last 17.0¢		Change -0.015(8.11%)		Mkt cap ! $38.41M

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Ann: Appointment of Ms Janine Rolfe to the Cynata Board, page-4

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