THE EMPEROR’S NEW CLOTHESWe now sadly know that the Emperor...

THE EMPEROR’S NEW CLOTHES

We now sadly know that the Emperor (SBN) was always naked.
The Emperor’s milliners (the SBN board) tried to convince us otherwise – that is, that the Emperor was clothed in the finest materials (O4, O8, Visualine, Bioscreens split cup, Probeline).

For a while, many of us – shareholders (including), SiYi, MPS, Express Diagnostics, the Nuevo Leon Department of Education, Medinat, Bioscreens, the Latvian Police Department and CMM) - believed them.

Many of us no doubt were attracted by the surface glitter of what appeared, on first blush, to be a strong management team and a strong register (Mike Fitzpatrick and Dr Sun).

But sadly, we were duped. Despite the surface glitter, this board and management team has fallen disastrously short of its promise. It could not have failed more dismally. Individual board members have lacked focus, commitment and care. They have been, and are, bankrupt of ideas.

With these failings – together with their arrogant remoteness and lack of transparency – they lost the confidence of all their partners, customers and shareholders and really had no choice other than to shut up shop.

Some shareholders, to their credit, saw the cracks (crevasses?) of this emerging scenario earlier than others.
The question that remains for us is just how could a company with a strong set of ‘competitive advantages’ and a broad portfolio of prospects (as strongly articulated in last July’s Rights Issue Prospectus) – together with a highly successful outcome for the Rights Issue (100% take up) - blow it all in the space of just 6 months?
The Board has never explained this (and this is surely the main reason they have lost the faith and respect of ALL shareholders – many of whom are now ex-shareholders) merely lumping the responsibility on partners and/or the international recession.

The inadequacy of the board was amply demonstrated in the recent telephone conference briefing. I could not take part in it but my understanding (from talking to some who did) is that board members appeared bereft of strategy and were virtually ‘fishing’ for ideas on how to take the company forward.

How totally belittling and embarrassing for the Board – and what ridiculous timing! The time to ask for advice was at the outset (during construction of the business plan) or at the first signs that the plan wasn’t working. Not after the company has virtually folded! The ‘wake up call’ clearly came too late.

And, besides, most shareholders invested in the company on the (now known to be mistaken) belief that the board knew what it was doing.

So why, exactly, did SBN fail?

We’ll probably never know the true answer to that – given the board’s stinginess with information and their collective lack of courage in telling us just why all their partners lost faith/interest in them or why the IP was suddenly found to be of no value (either to SBN or anyone else).

Had the Board, itself, been duped about the intrinsic value of the IP or had something gone catastrophically wrong with it (in the scientific and/or market sense) since it was acquired by SBN? We are owed answers to these questions!

Despite the lack of clarity, these, in my view, are a few of the likely causes of the failure:

1. Insufficient diversity of skills and experience - particularly those of relevance to the specific needs of running a biotech start-up - on the Board,

2. Lack of individual board member commitment and enthusiasm for the company (demonstrated by the lack of “skin in the game”)

3. Inability to execute the business plan,

4. Alienation of customers (through poor relationship management and/or cross-cultural faux pas)

5. Failure to hire and groom sufficiently skilled management

6. Arrogance – in not accepting advice (e.g. re a commoditization rather than production/sales model) at an appropriate time in the company’s life cycle

Essentially, to use a seafaring metaphor, the board had launched the good ship SBN with only half a crew. The captain (King) was left at port preoccupied with other matters. So they commenced the voyage with just a first mate (Kerins), a purser (Hallam), assistant purser (Paice) and engineer (Dr Sun). They ‘forgot’ to recruit a navigator (an entrepreneurial type experienced with biotech start-ups).

So, there they were, on the high seas, without a captain or a navigator, their fate in the hands of a relatively inexperienced first mate. And this situation soon worsened – with the purser (Hallam) assuming the captaincy with the first mate (Kerins) being relegated to the status of bosun.

We very soon had a rudderless ship just ripe for ruination on the reefs of folly.

One wonders how ashamed and culpable the Board members are feeling for just how they have ‘shipwrecked’ this company.
Not much, probably, given their on-going predilection for avoiding and not explaining the true story behind the failure. But they should feel it – and most considerably.