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Lesley
Zohar is NOT remaining on the Board of Puretech but is going to be "an observer" what ever that means.
A bizarre changing of the guard with Chowrira taking over as CEO who has been a senior executive in Puretech for some time.
I see Invesco as the main instigator behind the ousting of Zohar after 8 years of chronic underperformance in the share price ( £1.80 in 2015 ..£2.14 today)
Invesco has maintained its 24% over the past year or so but had c33% in 2021 /22.
It had to reduce below 30% to accord with internal Invesco rules on holding large stakes in companies after a major review in 2021.
I was quite critical of the buyback at £2.5 in my correspondence with Kana in Investor Relations and now appear to be blanked.
Strange behaviour indeed.
Where does it say they’ve reduced ? They have 24% it’s never reduced
Patience indeed! Years in most investors case.I would contact Puretech 3 to 4 times a year and always got a polite reply. I contacted DZ after the tender and politely said in my opinion 2.50 was a bit low.She then blocked me So again very politely contacted Puretech asking why DZ departed at such a strategic time.So far nothing in response.I have one positive that DZ is still staying on their board.Any comments anyone?
Thanks JSB for your thoughtful assessment. I am a holder who feels positive about the potential value, one way or the other. It is also healthier that Invesco has sold down some of its massive interest. Obviously there are risks, but for patience there is a real opportunity for good results.
There is no love for the company. The hub and spoke model and company strategy significantly derisks them as a biotech but it doesn’t seem to attract the appetite of many investors.
Many mid cap biotechs are one or two trial results from being boom or bust. Had Puretech kept a significant % of Karuna and it failed P3, they would have been left with very little but in hindsight we can look and say that they could have had another couple more billion if they held a higher % for longer.
I see four valuable assets in Puretech now. We have Seaport, Gallop, Vedanta and LYT-100. I’d expect the first two to list on the NASDAQ at some point as Karuna did and more value unlocked as they progress through clinical trials.
I don’t know what the answer is to unlocking the true valuation but here is hoping that our new CEO does. The share price is dire for what is on offer. The company is sitting on $600+ million (pre tender offer) and the valuation just under $750 million. So you have the above mentioned for $150 million and the remaining royalties and milestone payments from KAR-XT still to come.
I am not that stupid
Sorry
Hi Dallo, if you don't mind can you please name the small pharma that you wanted PRTC to acquire. Thanks
Unprecedented
Firstly Invesco hasn't been selling down recently and was instrumental in getting rid of Zohar imho.
Short term traders didn't effect the SP and it was the $50m buyback plus the BMS takeover of Karuna that generated a small lift in the SP.
LYT-100 is awaiting Phase 2 trial results later in the year which may spark a rise in the SP if positive but still will require a Phase 3 study which normally takes 2/3 years.
Seaport and Gallop are at an early stage of drug development and will require years of positive trials before commercialisation.
Vedanta is much closer to a breakthrough and could be a big winner.
The market and Invesco didn't appreciate Puretech trying to bale out Gelesis where Zohar's husband was CEO.
Why would Zohar leave Puretech to run an effective start up when she was CEO of a large Public Company which she founded if she wasn't pushed.
I presented an opportunity to Puretech to buy a small Pharma company where one of it's drugs is in Phase 3 trials and another drug in Phase 2/3 trial each with market potential of over $5billion with significant other assets for a cost much less than the tender offer amount of $100m.
Only a deeply unimaginative management would use its cash surpluses to buy back its shares at £2.50 which effectively says they cannot think of any alternatives to enhance shareholder value other than giving back the funds at a derisory valuation.
I didn't ask for a return of £2.50 a share but told them ,if they were going to do it....do it big at £3 to reflect management's view that the share price was totally undervalued.
It would have cost an extra $30m of our $300m proceeds from Karuns with the $400m royalties still to come and the cost savings in R&D from the hiving off of Seaport and Gallop freeing up major cash outlay over the coming years.
With all this good news, if this does not attract buyers in London I see no alternative but a move to the US. This must be in to the directors minds.
Unprecedented
I am not a short term trader and I have been invested in Puretech for 6 years.
My problem is that you live and die as a CEO of a Public Company on the basis of the share price .
The SP was £1.80 in September 2015 and par a brief jump 2 years ago , it remained at c£2 which when you apply an inflation discount over the past 8 years the £2 is worth a little than the £1.8 of 2015.
In other words a disastrous performance given the circumstances and Zohar had to go imho.
Hopefully the new CEO can be more investor focused
but how long more can we long termers wait for a return on our investment.
That's why I was disappointed with the £2.50 tender offer and is why I urged Zohar to be more aggressive with the surplus cash and look at acquisitions as a possibility.
The market has shrugged at Zohars departure and the tender offer.
Where are the next catalysts for a rerating of the share price?
I will continue to hold for a while longer but I am getting old!!
Just to add to that - I believe we are broken up following pressure from the likes of Invesco so we end up with three conventional biotechs. No big pharma would take over a hub and spoke company - but each of the separate companies would be very attractive take over targets.
Well the FDA seem to think that we have found a cure for cancer. Longer term, it appears to me that PureTech are effectively broken up into three units, lyt100, gallop and seaport - and the current board are being split up alongside to run those three units. Time will tell. The problem with the share price I think is two-fold. There is a longstanding problem in that Invesco are reducing their exposure and they have been doing so for some time. And the other problem is that recently we have had an influx of short time traders, that got the price up from 180 220 - we are mentioned many more times on twitter/x these days. My guess is that some of those traders seem to have abandoned their bets recently, it’s all taking a bit too long for them…
You can’t have it both ways Dallo. On the one hand you’re complaining that we are not trying to keep 100% share of our most promising spin offs yet you have been asking for greater shareholder returns for some time. My preference would have been to play the long game and keep a larger share of Seaport rather than a buyback but it looks like they have given in to you and other short term investors. No wonder investor relations have stopped responding to you. And your attacks on Daphne Zohar are unfair, the takeover of genesis was considered only when it was about to run out of money and as a major shareholder I expect us to consider that.
I get the feeling if Puretech found a cure for cancer the shares would drop.News in the main has been positive over the last couple of years Also Zohar must have known this announcement was coming so her timing leaves me bamboozled
Today again positive but the SP falls! And that in spite of the promised tender to us at (at least) £2.50!! Seems a strange response but I am beginning to learn that right now there does not seem to be a lot of love out there for Puretech!
Lesley
Zohar also tried to get Puretech to buy Gelesis one of its founded entities who had developed a weight loss product, Plenity, and who happened to be run by her husband.
Once Ozempic the wonder weight loss drug arrived on the scene, the game was up for Gelesis and the Puretech Board aborted the bid.
The classic case of an Entrepreneur trying to manage a complex business in a Public Company without the experience and skills required and just holding 5% of the company.
Good riddance.
She had her own agenda from the start.Remember she tried another disastrous merger 2 / 3 years ago and failed.Why would she move on when she herself said this was a breakthrough year for Puretech?
Soundman
Inevitable that Zohar had to go as 9 years of a stagnant SP was totally unacceptable to the big Institutional investors like Invesco.
She proved to be a poor CEO and letting Karuna and KarXt slip from the grasp of Puretech's shareholders and be sold for $14b was a disastrous decision...despite her protestations to the contrary.
The wheel / spoke model is too obscure for general investors and the last straw was the miserable $100m tender offer at a derisory £2.50 a share....in effect saying to the market that management felt this was what the company was worth.
Again the market couldn't care less and no reaction to the tender or Zohar being moved aside.
There may after all be a bigger offering in the Tender by shareholders at £2.50 than I originally thought but we will wait and see.
Dallo - No posts since 22 March.
Any thoughts on today's RNS and current SP as we close in on Results and Launch of tender Offer?
Sorry... 3rd line should read 'already'
..... is huge good news for small shareholders who intend to keep at least most of their holding. Daphne hands over top management to someone with better management experience and we get someone alpeadt with full knowledge of the group and how it works. Also an exciting ( I hope) new subsidiary.
...or of course they could always do the right thing and up the tender offer to 275/300.
That would put the cat amongst the pigeons
What we need is the SP to head towards 250 and then all get the special divi due to there being no tender take up and also keep our shares, or simply sell out at that level.
It's all down to the price at the point the tender closes. I can't see how it can be much less than 250 and the process serve its purpose.
If the SP at tender close is 240+ then you might get to sell 90% of your holding (as not many will bother) but by the time you add fees and duties you won't make much if anything buying back. But if it is 245 then, as an RI, why bother with the tender? You could just take 245 and not have to wait for the money or have a partial take up.
Alternatively, if the SP is only 220 then you'll probably get to sell only 20% of your (tendered) holding anyway as everyone will think it is easy money, but...
I think with the significant reduction in liquidity once 14% has been removed from the market, that one way or another the SP will be 245+ and you won't get to buy back for any less than you sold for. The question you need to ask yourself is are you happy to walk away with 250, which is what they want you to do.
Questions, question...
Would sell at2.50 and buy on drop ?