Letter to ACL and response below (more to some):
Dear Mr Hughes, Mr Poutakidis and Ms Pilcher,
I have been a shareholder in Alchemia since May 2007.
I refer to the announcement of 3rd July, 2015 – Alchemia Announces the Assignment of VAST Technology.
I understand one of the three key management staff of Alchemia, Wim Meutermans, is also a founding and major shareholder in the company, VAST Biosciences P/L, which has been assigned the VAST Technology. Further I understand that Mr. Meutermans was and is being paid by Alchemia for his part in developing the VAST technology.
Given the responsibility of Directors/Key Management to ensure that a company does not act in a manner ‘contrary to the interests of its members’ I would appreciate some evidence as to why this is not the case in this matter, particularly in light of the 23rd April, 2013 announcement anticipating “up to $240m in milestones, plus R&D expenses and royalties” from a collaboration with AstraZeneca. It would appear that the minimal upfront payment of $100k, with potential royalties in future would seem to be a pathetic return on the investment made by Alchemia in the VAST Technology to date.
Regards
REPLY:
Dear ,
I am responding to your letter of 7th July 2015 regarding the assignment of the VAST technology. Following the failure of the phase III clinical trial, Alchemia was unable to continue to fund the development of the VAST technology or the HyACT platform. This was announced to our shareholders in the shareholder update in January. We engaged Evolution Life Sciences to assist us with a transaction on the VAST technology. Despite the potential promise of the technology, it is still in its early stages and has not yet reached the crucial value inflection point of getting a compound into clinical trials. As a result, the technology as it stands today has little value attributed to it. Any milestones from the Astra Zeneca deal are still some way off in the future and require input from the VAST scientists with knowledge of the intellectual property (the agreement is a collaboration) to maximise the chances of success. The group who took on the VAST technology are willing to invest in its continued development and pay a return to Alchemia by way of a royalty on net revenues. The royalties offered (5-10%) are standard in the industry for early stage discovery deals. For your information, there were no other offers received, despite a 6 month marketing effort by Evolution Life Sciences.
I do not know what arrangements the acquirers have put in place for the VAST scientists but it is customary for them to be incentivised through the issue of shares or options. Alchemia offered similar employee incentive schemes to its scientists.
I hope this helps to address your concerns.
Kind regards,
Tracie Ramsdale
Non-executive director
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