EGM Wrap

As promised, here are my notes and impressions from the EGM. Sorry it’s a bit long-winded.

Preamble:
Presumably everyone has by now read the presentation from the Chairman and CEO. Apart from that, there was a short message read out from Wayne Holman of Ridgeback Capital, wherein he spoke about his commitment to PRR and strong support for its aims and objectives.


Formal Business:
Resolutions 1 – 3 were passed easily with only minimal question and answer. As expected, as they were pretty much fait-accomplis.

Resolution 5 passed with a small amount of discussion and a strong endorsement of MV’s capabilities and efforts from the Board.


Resolution 4 was where things got quite interesting. The proxies cast were announced prior to discussion and formal vote and were much tighter for/against. If I recall correctly around 100m for and 80m against.

I posed 4 questions on the resolution. I should make clear that the answers below each are not verbatim by any means, merely a synopsis of my interpretation.

Q1. What assurance or undertaking do we have from Ridgeback that they will continue to be a stable cornerstone investor, and not simple dump their shares on market, following the 3 month escrow period, as was the case with Springtree and Bergen?

A1. Ridgeback is a very different type of insto investor than the previous two. They conducted significant due diligence on Prima with a view to a long term involvement. Wayne Holman has a medical degree and background, is widely respected in the med-investment area and has previously made a number of long term investments in the field. Note that they could have sold some or all of the shares they already acquired for a significant windfall profit, but haven’t done so.


Q2. The proposed warrants issue includes a provision for a “Cashless Exercise”, whereby Ridgeback can acquire almost all of the 380 million new shares without payment of the $9 million exercise fee.
In the Boards opinion, what is the likelihood they would utilise this option?

A2. The answer to this was somewhat less than satisfactory IMO. There was some discussion about the reduced number of shares if that option was exercised, but I think it’s clear that Ridgeback will most likely use it.

Q3. Prima has indicated that Ridgeback’s involvement offers other potential benefits to the company, in terms of attracting investors, researchers, in-licensing opportunities, partners etc.
Can the Board offer examples of other bio-tech companies where Ridgebacks involvement has been directly beneficial in this way?

A3. They feel Ridgeback has a very good reputation and that their involvement in PRR carries almost a defacto endorsement of the company. LT did mention a few other companies, but I wasn’t immediately familiar with them and didn’t really catch the names. Stuart did promise to get further info to me.

Q4. Why did the Board choose not to offer the Share Purchase Plan to shareholders at the same time as the announcement of the Ridgeback deal, and on the same cost basis?

A4. This was pretty interesting.
At the time, management were pretty much flat out to get the Ridgeback funding arrangement in place and make the announcement to comply with continuous disclosure requirements. It wasn’t feasible to concurrently complete the other discussions and legal/underwriting arrangements for the SPP. They just didn’t have the manpower and resources. They did apply to the ASX for a waiver of the maximum SPP discount rule but were knocked back.

On this particular point, after the meeting I got further elaboration. The massive market reaction to the Cvac trial results a few days later was totally unexpected, particularly on the Nasdaq. Possibly a big part of that was due to a significant short-squeeze, where shorters were desperate to unwind at any price.



A few other snippets and impressions from post meeting discussions:

Negotiations over the entire deal terms were tough. PRR was essentially in a tight situation, with only a few months cash in hand. Ridgeback were clearly holding the majority of the cards so it’s hardly surprising they could press their advantage. We will just have to wait and see if they actually prove to be as beneficial to PRR as we hope.

On Cvac partnering opportunities, MV seems cautiously optimistic but he’s very conservative in his approach to managing expectations. Seems allergic to false promises and hype.

I asked whether there was now a move towards working with the EMA as opposed to the FDA on product/trial development. The answer was Yes for a number of reasons. Geographically it makes sense as the company’s main R&D facilities are in Paris and the patient trials will be mainly in Europe. Also because EMA has a more collaborative and transparent process for trial development and product approval.

This is my best recollection. I hope I haven’t left anything important out.

Cheers,
K