As we approach the upcoming general meeting, we are reaching out directly to you, the true owners of Percheron Therapeutics, to discuss the critical resolutions that will define the future of our company.
Under the leadership of the current Board, Percheron’s value has been significantly diminished and currently remains severely depressed, trading well below cash backing. This reflects a clear lack of market confidence in the Board’s ability to create value for shareholders. The recently released notice of meeting commentary signals plans to maintain a high-cost structure, further depleting cash reserves—an approach that is unsustainable and detrimental to shareholder interests.
In stark contrast, we are already engaging with multiple parties eager to explore new opportunities for investment and strategic growth. With the right leadership, Percheron Therapeutics can once again be positioned as a competitive and respected company in the biotech sector.
Why Change is Needed Now
When assessing the board's performance, the most important metric for shareholders is share price performance. Despite all of the drug development experience touted by the current leadership, the company’s current leadership has presided over significant value destruction, even without taking into account the failed trial:
- Since Dr Charmaine Gittleson became Chair, the share price has plummeted by approximately 70% (not including the post-Phase II Topline results trading).
- Under Dr James Garner’s tenure as CEO, the share price has fallen 33% (not including the post-Phase II Topline results trading) over just 16 months in the lead-up to the Topline results release.
This is similar to the disappointing performance of other companies highlighted in the directors' bios, where they were involved immediately prior to and / or during their tenure with Percheron. Interestingly, the logos of these companies—Patrys Limited, NeuroBo, and Kazia Therapeutics—are not displayed.
At the recent AGM, shareholders delivered a clear message of dissatisfaction by voting against the remuneration report and issuing a first strike. This reflected a growing concern about disproportionate pay and bonuses awarded to the current Board, despite poor share price performance. The Board’s response was to edit out critical feedback raised during the AGM from the video shared with shareholders—yet another example of their reluctance to face accountability.
Key Concerns from Shareholders
- Financial Management: Resorting to high-interest loans (~16% p.a.) against future R&D rebates demonstrates poor planning. Borrowing, in any form, in a non-revenue generating venture makes little sense, given company had sufficient funds in the bank.
- Disregard for Shareholder Rights: Proposed constitutional changes undermined shareholder influence, further eroding trust.
- Optics: Sending the CEO to a JP Morgan conference during a board challenge and following a failed trial was a misstep and gross waste of shareholder funds, especially when a US based director could have represented the company. The current directors had the opportunity to address the shareholder meeting requisition notice and work towards a better outcome for shareholders. Instead, they focused their efforts on producing a 26-page blame-shifting statement that fails to take accountability for their role in the company’s under-performance.
- Inconsistent Messaging: The Board’s announcements regarding the Phase IIb trial have been riddled with contradictions, omissions, and missteps, creating confusion and eroding investor confidence. Key issues include:
- Premature Conclusions: The negative announcement on 18 December 2024 should have been qualified to indicate that there may still be a path forward for ATL1102 in DMD pending a complete analysis of all results as previously advised by the Board would be received during 2025. Instead, the decision to prematurely abandon the program significantly undermined investor value and confidence.
- Unexplained Discrepancies with Phase IIa Results: The Phase IIb results were completely at odds with the earlier Phase IIa findings, yet no explanation or context for this discrepancy was provided in the initial announcement. This raises serious questions about the reliability and validity of the data presented, which the Board has failed to address adequately.
- Conflicting Messaging Across Announcements: The initial announcement was concise, focused on the drug’s failure, and outlined immediate next steps, but the follow-up communication shifted tone significantly, offering a more detailed and empathetic narrative. Despite this, inconsistencies persisted: in the same paragraph, the Board states, “our assumption at this stage is that the drug will not move forward in DMD,” only to later suggest the possibility of “not abandoning it prematurely.” These conflicting messages have created confusion and uncertainty among investors, further damaging the Board’s credibility.
- Contradictory Post-Trial Access Announcement: The announcement on 28 October 2024 regarding the launch of a post-trial access program for ATL1102 stands in stark contrast to the reported Phase IIb trial results. While the company indicated it would continue providing ATL1102 to patients on compassionate grounds, the trial results were presented as conclusively negative. This inconsistency was not addressed or explained, leaving shareholders questioning the credibility of the data and the decisions based on it. A clear explanation of why the trial results completely contradicted this earlier optimistic announcement was warranted but never provided.
- Lack of Clear Plans and Timeline: The initial announcement failed to include detailed future plans or a clear timeline for further analysis and strategic review. This omission left investors in the dark about the company’s direction, potential recovery strategies, or whether alternative interpretations of the data were being seriously considered.
This pattern of inconsistent and poorly thought-out communication demonstrates a lack of strategic foresight and an inability to manage shareholder relations effectively during critical periods. It has also exacerbated the already significant loss of shareholder value.Reflecting on the above, the current Board’s attempt to rewrite the company’s history, coupled with their use of personal attacks, further underscores why Percheron Therapeutics shareholders deserve new leadership they can trust.
A Clear Path Forward
We, Gregory Peters and Gennadi Koutchin, are committed to restoring value, trust, and strategic clarity at Percheron. Should we be elected as directors, our priorities will include:
- Appointing a Third Director: Should Gil Price resign as per his stated intention, we are prepared to appoint a third director immediately. We have multiple capable candidates available to fill this potential vacancy, ensuring continuity and strengthening the Board’s expertise. Several professional services groups have indicated their willingness to provide interim director coverage for compliance purposes should that be required.
- Identifying a New CEO: Our broad financial markets and business networks allow us to access the most capable people to advance the company moving forward. A new CEO appointment will be made as soon as required, depending on the outcome of the strategic review and the pipeline opportunities selected to ensure alignment with the skill set needed for the company’s future direction.
- Cost Control: We willinvestigate trial closure costs estimated by the current board, in the December quarterly report, to be in the range of $6.0m to $7.0m,whichappears to be exceedingly high. We will restructure the company cost base to operate efficiently and align funding reserves and expenses with realistic goals.
- Strategic Review: Conducting a comprehensive review of the Phase IIb data and exploring viable paths forward for ATL1102 or alternative strategies if required.
- Advancing Discussions on New Pipeline Opportunities: We are already engaging with multiple parties and will continue sourcing additional investment and strategic growth opportunities. These will be screened by our panel of biotech specialists to conduct due diligence on the most attractive opportunities that, in our panel’s view, would resonate with investment markets.
- Shareholder Engagement: Fostering transparency and collaboration by keeping shareholders informed.
- Capital Markets Confidence: Leveraging our expertise in financial strategy to stabilise the company and position it for future growth.
Unlike the current Board, we will focus on value creation, shareholder returns, and operational excellence.
Why the Current Board’s Approach is Failing
The Board’s 26-page response to the notice of meeting is filled with blame-shifting and excuses. Requisitioning shareholders’ statement was limited to 1,000 words in accordance with the Corporations Act and buried in small print on page 40 of the notice. In contrast, the current directors faced no such constraints and used 26 pages to drown out our Substantial shareholder message. This imbalance reflects not only their disregard for fairness but also an abuse of power to suppress shareholder voices and justify their performance.
The decision to hold the general meeting in Brisbane—far from the company’s Melbourne base—is an attempt to distance themselves from shareholders. This action speaks volumes about their disregard for transparency and accountability.
Your Vote Matters
This is a pivotal moment for Percheron Therapeutics. Your vote can determine whether we continue down the path of value destruction or take bold steps towards a brighter future.
How to Vote Online
Follow these simple steps to cast your vote to support us:
1. Visithttps://www.votingonline.com.au/pergm2025.
2. Enter your postcode (or Country of Residence if outside Australia).
3. Enter your Voting Access Code (VAC) provided in the Notice of Meeting correspondence.
4. Direct your proxies as you wish, this can be Gennadi Koutchin, Greg Peters or your professional adviser.
5. Vote'For'on each resolution.
Finding Your Voting Access Code (VAC)
To locate your VAC, visit the company's share registry, Boardroom Limited, via the InvestorServe portal:https://www.investorserve.com.au
Access your holding using either:
Registered User Log In (if you have an account), or
Individual Investment Access using your HIN or SRN, post code and the name of your holding.
Navigate to: Statements & Advices → Click View on Percheron Therapeutics Limited - Notice of General Meeting.
Your VAC is located towards the top left of the page under 'To Appoint A Proxy Online' - Step 3.
To support us, direct your proxies toGennadi Koutchin, Greg Peters or your professional advisor, then select to vote 'For' for each resolution.
Contact Us
We welcome the opportunity to discuss these matters further. If you have questions or would like to share your thoughts, please reach out:
Let’s seize this opportunity to put Percheron on the path to recovery and growth. Together, we can restore shareholder value and rebuild confidence in our company.
Sincerely,
Gregory Peters & Gennadi Koutchin
Proposed Directors, Percheron Therapeutics Ltd
