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Alzheimer's and inflammation. I have read just a few posts on this board regarding this. I am aware of a small biotech company that is developing treatments based on controlling and reducing neuroinflammation. People with Rheumatoid Arthritis are 8x more likely to get Alzheimer's than people who do not have it. Here is a little cut and paste from their website:
******* is a protein biologic that targets soluble TNF (sTNF) and may have many beneficial effects in patients with Alzheimer’s disease by decreasing neuroinflammation. We believe that decreasing neuroinflammation may slow or stop the progression of the cognitive and psychiatric symptoms of Alzheimer’s patients and improve in the overall quality of life of the patient and their care-givers.
FWIW
I paraphrased a very brief comment from a bigger report. The report did not go into any detail about specific sourcing of API and did not mention any suppliers by name for any of the generic companies. I am unable to provide a link and you would not be missing anything. Sorry
OMEGA 3 manufacturer owned by private equity is for sale:
Amarin's market cap is slightly higher than the estimated value of the proposed transaction, but half of Amarin's value is in cash. I assume the manufacturer is for OTC supplements, so how much more is a branded, patented, pharmaceutical grade company worth?
Capiton exploring potential IPO of fish-oil maker KD Pharma
Jan. 18, 2022 3:35 PM ET
German private equity group Capiton is exploring a possible sale or IPO of KD Pharma Group, a leading manufacturer of Omega-3 products derived from fish oil.
Jefferies, USB and Evercore are said to be working with Capiton on a potential deal that could be worth up to $1.1 billion, Bloomberg reported, citing people close to the matter.
Jefferies and UBS declined to comment on the report, while Capiton, Evercore and KD Pharma did not respond to inquiries for comment, Bloomberg said.
KD Pharma, which is based in Switzerland, is a maker of Omega-3 fatty acid ingredients for use in the pharmaceutical and nutritional products industries. The company was sold to Capiton in 2013, according to its website.
In late October, KD Pharma bought a 51% stake in Trigal Pharma, a marketer of medical cannabinoid products.
Hikma/Dr. Reddy's: I just read a research report that states Hikma is stagnating at a 14% market share but Hikma expects API supply to progressively improve over the year. They expressed concern that Hikma might not be able to gain market share and margins will therefore be constrained. They have DR. Reddy with a 12% market share. Apotex recently launched but is expected to have the same problems with API supply as the other generics. The author of the report did not seemed convinced that the API supply issue will soon be resolved. FWIW
Lizzy, what an interesting journey it must have been. Congrats on your achievements and breaking a few barriers. I might have to get the private message service. Good luck with your fund.
Lizzy, Shorting against the box was used to reduce risk, not take on more risk. I am not sure if we are talking about the same thing. If you had a long position that was less than a year hold, you could short to lock in your profit and wait until the holding became long term and then close the long and the short. Of course a plummeting stock could create a gain on the short position that would be ordinary income and you would have all the gain in the short and not the long position. One could also defer a tax by shorting in Nov/Dec and closing both the short and long in the next tax year.
Oh, the good old days.
Were you involved with costless collars and proprietary products? Not sure what the prop desk does (or did). Interesting stuff-
I normally do not like investing in companies with large short positions. Other than a buyout arbitrage, it always scares me to wonder what do they know that I do not.
Lizzy, I personally do not lend my shares unless I am generously rewarded. That is why I required a minimum of 20%, which still did not really awe me. It does not bother me to lend shares if I am being generously compensated as my lend will not determine or influence the success of the company in the long run. They or I will be rewarded based on our respective beliefs. Sometimes a large short can really be a hedge and just a timing issue. They did away with shorting against the box years ago, but I have done this for myself when it was legal. I believe some shorts (not all) do provide liquidity to the market and serve a very valuable service by identifying companies that are cooking the books (Enron, Worldcomm etc). My personal opinion, professional shorts are more informed than long stock holders. Shorts have unlimited loss exposure which means they better know what they are doing (like shorting a company whose net short position exceeds the float-heavy sarcasm). That was a general statement and I am not defending the practice as it exists today.
With respect to your question about keeping stock in cash: stock can be held in cash (type 1) or margin (type 2). This is old industry jargon. If you hold in cash, you cannot borrow (margin) those positions. If stock is held in margin, the brokerage firm can lend your stock without your knowledge. This is why I got a call from the stock loan department because I held the position in cash (type 1). They could not borrow without me moving the stock to margin, where it sat in a different type-done for segregation purposes.
I hope I was able to clarify my comments and answer your questions. Please let me know if you have any other thoughts or questions on the topic.
Lizzy, I am happy to answer any questions that you have. I have an account at one of the do it yourself firms (Schwab/Fidelity etc). I was contacted directly by the stock loan department as they can see what the firm holds in client accounts. I was contacted because someone needed/wanted to short the stock in question. I have some thinly traded obscure stocks that are not well followed. The Investment company could satisfy this themselves and make money from it, or borrow the stock from another firm to help their client. In my case, when they offered me 40%, the borrower paid the firm 60%. This confirms your comment about the stock loan dept being very profitable. Once I loan the stock, I am not prevented from doing anything. If I want to sell the position the next day, I am not prevented from doing so. The firm would then have to find someone else to borrow the stock from. Naked shorting is a crime that does not seem to get punished. The risk goes to the borrower (the person who shorted) as stock availability can dry up and then they are forced to cover. The rate promised to me from the Investment Firm is day to day, and they can return the stock to me after 1 day if they so choose to.
I set a limit that I would not be interested in loaning any shares unless I was paid 20% annualized. It is my understanding that shares cannot be borrowed unless they are held in margin. I keep all my positions in cash (instead of margin) so I do not unwittingly let the investment firm lend my stock to someone who is betting against me.
I hope this helped. Please feel free to ask any other questions you might have.
Lizzy, The cost of borrowing shares to short is mostly determined by demand and thus availability. The size of the float is also a contributing factor. Volatility of the underlying security also impacts the "cost" of the borrow. I have lent my shares of a few companies when I was being paid 40+% to do so. I declined when they offered me 15%. When lending one's shares to be shorted, you are allowing further shorting, or prevent someone from getting squeezed when the shares they had "borrowed" were taken back. I have seen rates as high as 110% on Gamestop, and somewhat surprisingly, my cost to short Tesla a few years ago was less than 2%. Unlike options, the general level of interest rates should not materially impact the cost to borrow shares unless rates are very high. I hope this helped.
Walgreens, CVS, and Walmart were found guilty in Ohio for helping create a public-health crisis by failing to properly monitor opioid prescriptions.
The federal-court panel backed claims by northeast Ohio’s Trumbull and Lake Counties that the pharmacy chains failed to create legally mandated monitoring systems to detect illegitimate opioid prescriptions.
Here is an interesting quote from the plaintiff's Lawyer: "Laws regarding proper monitoring of prescription drugs are to be taken seriously and not ignored or downplayed.”
Anybody see a parallel to not monitoring illegitimate filling of prescriptions for non approved use? I understand off label prescribing, but the magnitude of the abuse here is arguably a complete failure to dispense patented medication for it's intended use. Plain and simple, willful ignorance being used for profits is not an acceptable business model, especially when your blind eye is driven by higher profits than you would otherwise legally be entitled to.
This could have no bearing on any of the lawsuits but I do see an interesting crossover of legal principles.
Any thoughts?
CaptBeer, I wish I had read your post before I went on my little investigative endeavor. Your find was cleaner and more on point.
Thank you.
Regulatory language in Amarin filings. I will provide a link to the prospectus that has a 2017 date but also seems to be "updated" for the 2019 stock offering. I will also copy and paste the language used to define what is under the "risk" section of the document. They specifically allude to the risks of protecting their patents and protecting their IP. For what it is worth:
https://www.sec.gov/Archives/edgar/data/897448/000119312519198150/d743482d424b5.htm#toc743482_2
our ability to generate revenue and otherwise maintain sufficient cash and other liquid resources to meet our operating and any debt service requirements;
• the success of our current and future research and development activities and clinical trials, including the timing and nature of any interim or final results of such trials;
• decisions by regulatory authorities regarding whether and when to approve our drug applications, as well as their decisions regarding labeling and other matters that could affect the commercial potential of our products;
• the speed with which regulatory authorizations, pricing approvals and product launches may be achieved;
• whether we can execute on our existing strategic collaborations with respect to our products or product candidates;
• whether and when we will be able to enter into and consummate strategic collaborations with respect to our products or product candidates on acceptable terms;
• the success with which developed products may be commercialized and otherwise accepted by our approved markets;
• competitive developments affecting our products or product candidates, including generic and branded competition;
• the effect of possible domestic and foreign legislation or regulatory action affecting, among other things, pharmaceutical pricing and reimbursement, including under Medicaid and Medicare in the United States, and involuntary approval of prescription medicines for over-the-counter use and the trend toward managed care and health care cost containment;
• our reliance on third party manufacturers and suppliers;
• our ability to protect our patents and other intellectual property;
Marjac, Thank you very much for your kind words. I would offer an equally effusive comment about what you have meant to the this board, what you have done for aggrieved investors, and your genuine desire to right what is wrong (not limited to Amarin's issues). Thank you!!!
Marjac, I essentially agree with everything you wrote. I did not take it personally and did not feel it was directed at me. As an attorney, your experience dwarfs any comment that a non combatant could rightfully offer.
I empathize with the situation you alluded to about the last stop for the aggrieved when there is no place left to go. I have had to sue
to protect my name and reputation against the big employer and my self- employed attorney beat the large firms go to attorney. He saved my arse and I am eternally grateful. My chosen career could have been completely derailed by the corporate attorney who thought he could squeeze water from a stone. I was really referring to the large boiler plate lawsuits filed by how many firms, copying the predecessors filings, without doing any work to determine the merit of the claim, amongst other specious lawsuits.
Thank you for all you do, and you are a shining star in a clouded business.
Sincerely.
Mateo, I wish their licenses were at risk for filing baseless claims (not suggesting AMRN would be a baseless claim). The only way to cut down on the brain numbing amount of lawsuits is to add an element of risk to the plaintiff's attorney or firm. I know it could be argued that some legitimate claims might not find their way into court, but I doubt a legitimate case could not find a qualified attorney. It looks like the "Greenspan put" has made its way to the legal profession by putting a floor under their activities when there should be a risk. What do they have to lose if there is no risk?
Meowza, anticipating your next question. I was not clear. Marjac does not have to get past the stock price drop to assert a fraud or misrepresentation claim. Any lawsuit would have to specifically identify what the claim is and how it is supportive of further inquiry IMO. Once again, I am not a lawyer and this is just my opinion.
Meowza, I was not questioning Marjac or offering a legal opinion as I am not a lawyer. The comment about the stock price drop was to express a personal opinion about the class action lawsuits having no merit. I was not confusing the 2 of you. I asked you the question in my reply because you referenced (I believe) Marjac possibly pursuing his theories. I was curious, and still am, if anyone can express an area where there might have been fraud or the company made material misrepresentations. I am not confronting anyone or questioning anyone who has that opinion or believes that it is true. I am curious where some of the more active/informed posters could suggest where this might have some traction.
Bouf, Class action lawyers are in a league of their own. I find most of them to be a scourge and waste valuable resources (court time, company resources, and money). One firm files a lousy, ill-conceived complaint and it gets copied and filed by others. Looks like generic drug-copycats. I wish there were sanctions imposed on frivolous suits.
Thank you for your response.
Meowza, My response reflected my opinion about the 4 causes of action that the lawsuits seem to be pursuing. I find them to be disingenuous and unprovable. I personally doubt they would see the light of day in a courtroom.
If someone wants to allege fraud or misrepresentation, making a statement as such does not make it so. A fishing expedition to pursue a vague claim is tested in court before any discovery can be done. I have seen nothing to
indicate there was a fraud perpetrated or any material misrepresentations. If anything, a fraud might have been perpetrated on the company regarding qualified legal representation and competency ( I say this sarcastically).
The comment about the stock price drop was intended to indicate that the market was not expecting the patents to be invalidated. The efficient-market hypothesis is a hypothesis in financial economics that states that asset prices reflect all available information. An unexpected result lead to a huge stock drop where a victory might have provided a very small increase as that is what was expected.
Can you comment on where you think there was a fraud or misrepresentations were made?
Thank you for your response.
North, I was referring to the secondary offering when GS was the book manager and they were involved in the road show. All public offerings (IPO's and secondaries) come with thick prospectuses that no one would invest in if they believed all the risks that are outlined. They are written to avoid liability and not to induce investors by painting a rosy picture. I believe Sarbanes/Oxley mandated that any corporate executive signing 10K's/10Q's etc can be sued personally if there were any false/misleading statements, or for lack of material disclosures.
Fair value opinions are a different animal and I am not familiar with security laws surrounding it. The board of directors could be liable for failing to satisfy their fiduciary responsibilities. I am not sure a judge is the best trier of fact when these opinions are more subjective than objective.
Brokerage firms are interested in getting deals done, covering their arse,
and moving onto the next transaction. Getting things right is not a priority.
Thank you for your response.
Marjac, I disagree that the case has merit. For the case to have any merit, one has to get passed the sharp drop in the stock price after the court ruling. If it was so obvious, why wasn't the market more in tune with the legal proceedings when they were argued? One would also have to include Goldman Sachs and any other brokerage firm that was involved with the secondary offering which is full of disclosures and risks. Was Goldman and the others also at fault for helping perpetuate the fraud?The company has to disclose the risks, not predict or offer an opinion about what is going to happen. How does one reconcile "the increasingly high risks that the certain patents would be invalidated" when the Hikma CEO was quoted as saying "it was a longshot that was worth taking" after the verdict? How does one rightfully sue a company for letting litigation get in the way of a takeover that can never be publicly disclosed and maybe there were discussions. Every company could be liable for not selling themselves once an undefined problem manifests itself. How does one predict or discuss that companies are going to break the law and take your legally protected (loosely used here) market?
I am not a lawyer and these are my opinions. I have lost a lot of money here and I will take my lumps. I would be interested in hearing how you, or any other lawyer here would have made the appropriate disclosures to avoid a lawsuit. How does one quantify the risks of litigation and it's outcome?
I am not arguing with you and do not want to appear to be combative or in any way suggesting that you are wrong. I just don't see any merit here.
Thank you for all the work that you have done and trying to save the day. I did contribute to kitty to fund some of your legal work.
Sincerely.
STS- You are incorrect about companies leaving the US to avoid taxes. Corporate inversions were a big thing a few years ago until legislation diminished the incentive.
A tax inversion or corporate tax inversion is a form of tax avoidance where a corporation restructures so that the current parent is replaced by a foreign parent, and the original parent company becomes a subsidiary of the foreign parent, thus moving its tax residence to the foreign country. Wikipedia
https://www.ft.com/content/ddcd9ad6-a5cf-11e4-ad35-00144feab7de
Kiwi,
All are valid arguments.
Not sure a doctor on an airplane could be sued for not helping a stricken traveler as they have been sued for trying. Amarin must fulfill their contractual obligations and I would not argue against that.
I agree the current lawsuits are the correct way to go, and I just read an informative rely by North4000 to you. My questions/comments were all theoretical as pulling a drug like this from the market would be a crime against humanity. That said, has the interference from the FDA and the courts provided that same result?
Thank you.
Iryokabu,
I would like to thank you for efforts on this board. I check the board from time to time and have found your posts to be very informative (to the extent I could follow them).
My point or question, which in the context of hypothetical events is: from a legal and business point of view, would Amarin be in a better or worse place if they vacated the market due to the patent infringements? Sue and see what happens? Fight ridiculousness with an extreme and risky approach?
My mind wonders...
Thank you for your response.
Sleven,
You hit the nail on the head:
"I would think medical societies and lawmakers would have a few things to say about that".
I for one would really like to hear what they have to say about the screwed
up situation that the lawmakers created and the court's interpretation of what they meant and intended.
I agree this is part of a theoretical discussion and was not intended to be advice or a recommendation. I do not advocate pulling the drug from the market.
Pfizer is making money on their vaccine and the government has already discussed forcing the vaccine makers to share their recipe for "the greater good".
Thank you for your response.
Whalatane,
Would your answer change if Amarin could not make a profit from Vascepa
due to the generics market activities? There clearly is a proven medical need and it clearly appears that the generics are supplying a market they are not entitled to. If that encroachment causes a legitimate branded drug provider from being able to make a profit on their product, are they not entitled to damages? How could a company stay in business if all they do is lose money on a product that has a medical need? If they vacate the market, does that allow others to violate patent law?
I raise these as questions, I do not have an answer.
Thank you for your response.
Dancing in the Dark, I do not understand (I need clarification) your comment about meeting the demand and the supply component. I would ask if they pulled the drug from the market, how could they be sued in the US courts if they are not selling the drug in the US? There would be no patients to supply if they pulled the drug. Nobody would be getting Vascepa in the US.
I just made a more comprehensive post that might shed more light on what I was thinking.
Thank you for commenting as my intent was to hear from the board, not propose a strategy that would have little chance of happening, but what if?
STS- I was being sarcastic about their legal successes.
My comments were a total out of the box hypothetical. I do not have any medical industry experience or a legal background, but I keep thinking about how Amarin gets through the minefield.
With respect to your "abandonment" comment, if Amarin argued that the infringements made it financially impossible to make a profit, is there a legal claim to be made? Can you be forced to protect your patents by losing money when the market you have exclusivity on is being poached? Would it defeat any claim that they are 'cornering" the supply? Many people have opined the US market is done/lost. I take no position on that, but if it were to be the case, does Amarin have a better chance of making money marketing the drug or suing to protect what they should have been entitled to? Was the Hatch/Waxman legislation approved so a generic can underprice a branded drug by 8-10%? That doesn't seem like that was their intent.
My initial post stated the absurdity of pulling the drug from the market to gain a potential legal edge or put more pressure on the generics. But does the strategy have some merit? I was curious how some others might view it.
I am very long the stock and loaded with options. My hope is based on the impact this drug has on people and this major medical advancement will ultimately see the light of day.
The absurdity of this question is not lost on me. From a practical perspective it would never happen, but what if........
If Amarin stopped selling Vascepa in the US, and the generics capture 100% of the market (above and below the 500 trig level) how could there not be an infringement? How does a generic company defend them self against that?
If 10% of the market equals x, and they are selling 10x, how can they claim a blind eye to the numbers? Treble damages would certainly exceed any money "earned" from selling into the patent protected market.
Given the company's stellar record in court and in front of the FDA, would an extreme risk be the best chance of establishing the company's rightful place in the market? The absurdity of what has taken place so far might require an equally absurd dynamic to let the blind see again.
I am not advocating this as a strategy, nor do I believe it to be the right move at the moment as the current legal cases work their way through the courts, but what if.....
Dr Reddy 2nd quarter conf call Q&A on Vascepa: FWIW
Q:So, if you look at Amarin's commentary on their product Vascepa. They've been talking about how the product has been able to retain market shares, because the out-of-pocket expenses for the patient, is actually lower with the brand compared to the generic. Do you see this as a challenge for Dr. Reddy to gain market share in the market?
A:I cannot comment on those. On this stuff, I can tell you that so far we did not see challenge to that much.
Q:And second, on the API supply for our generic Vascepa launch. I just wanted to get a sense on, when do you think we will get to our fair market share for the product? And do -- is API anymore or concern in terms of our ability to ramp up this product, the supplies from partners?
A:At this stage, I don't see concerned with this.
Q:Okay. And when do we think we can get to a fair market share, in your assessment?
A:I don't know what is fair, fair incremental option. I think that the probably in Q2 you should see different results that in the contribution of this product, as we launched the product in the last few days of the quarter and actually Q2, for example, we will be looking for third quarter.
Q:he second question is just on Vascepa. I know you've answered. I'm looking at four-week data that is available now in IQVIA and your market share is under 3% for a drug which say is a second player that's 90% still branded. So why is the market share ramp-up so slower here? And how should it pan out?
A:Normally, when you launch, people are taking the relevant stock and then we are trying to do it. So, our sales is not in accordance to the acute brand.
CBB, IMO, I would be slashing all unnecessary expenditures. This could include the bloated salesforce and advertising. If the insurance companies/PBM's/state laws requiring generic fulfillment when available, dictate the distribution of medication, educating the public would be a waste of resources. The only way to compete against the generics is to beat them at their own game (includes litigation). This strategy requires higher margins and lower costs. The court cases pending (minus one) could have a big impact on the market and marketing which might be the reason the company has not yet gone down this road. The problem with this approach, is it would lower the price, and thus the profits on the 90% of the market that Amarin is supposedly entitled to. I would spend the money on litigation and throw away the trash. Go big or go home. If pet rocks could be sold, why does the best medication to hit the market in years have all these problems? Clearly company focus and competency, maybe arrogance got in the way. A new direction, whatever it might be, is desperately needed.
On a separate note, why was Hikma selling the generic at a 10% discount to the branded drug? I do not believe the legislation opening the door for generics was so a company could charge 10% less than the brand when 30-50% is the norm (IMO). This situation makes a mockery of our courts and politicians.
FWIW, investment firm analyst had the following comments about DRL entering the market. The analyst believed that Hikma had supplied a little over 14% of the volume based market share as of 6-11-21. They estimate net brand sales of approximately $700 million (annualized) as of 6-21-21 and is growing at a rate of 20%.The real interesting part is the expected price erosion of at least 50% as more generics enter the market. They expect future generic market share to be between 25-30%.
It should be interesting to see who wins/survives the price war as economies of scale would dictate the largest supplier has the lowest cost of production. Alternatively, cheap supply of inferior API could change this but that would indicate an inferior product.
Anybody have an idea about the quality/cost differential between suppliers?
Johngnatt, it was an analyst's comment (one line) in a research report that he authored. I did not participate in the viral meeting and did not hear it first hand. This has no litigation value. I shared the comment as I do other comments I read in research reports if I think the board would be interested and I have not seen it addressed by any of the more active posters. FWIW
The comment came via a large investment firm who held a virtual summit with the CEO and the firm's investors. I read the comment in their follow up research report.
Hello Sleven, common sense has no place in a courtroom. I would agree with you, but they are separate actions, have separate facts, and there is a time element as well. Lawyers on the board are better equipped to address this, but how does one bring a lawsuit against a competitor for monopolistic actions (cornering supply) when there were no competitors? Hikma's CEO was quoted as saying the case was a longshot. Would a company that does not expect to win, go out and buy supply before they secure a victory?
The good supply comment might be accurate for now (quality is still in doubt), but that doesn't address Amarin's past business relationships and activities. An interesting dynamic from my perspective is the 10% market for the 500 and above trig count. If someone has already secured 10% of the market, and this data is published, how could they possibly argue they are not infringing as a new competitor? Is it first come first serve? Will any third party on the insurance or PBM side want to catch this hot potato? I would not think it is worth the risk.
Just my opinion.
FWIW, DRL last week stated gVascepa is on track for early Jul '21 launch with good supplies.
A buyout in my opinion is a longshot in the short to intermediate term UNLESS the acquirer is willing to pay up for the possibilities. An example would be when Gilead bought Pharmasset for 11 billion in 2011 for the Hepatitis franchise. They knew what they were buying. Pharmasset was a medical development company not a sales organization (Amarin is not one yet either). What interests me about any potential settlement, which I do not expect, is would any suitor have to approve it? Any settlement encumbers the acquirer as well. Would the settlement be indicative that the (a) potential suitor is defining their risks by eliminating uncertainty?
It appears that we could connect the dots with the Merck connections, but we still have a valuation issue. This is the most complicated, unpredictable, screwed up story I have ever seen in any company I have ever followed. I am very long, not swayed by short term movements, and expect one day to be handsomely rewarded. Sorry for the delay in responding, I was in Kentucky visiting horse farms and some of my horses. Thank you for the post.
Baker Brothers just became a active investor in Immunocore after acquiring more shares according to Barron's. They now have a 7.7% position. According to Yahoo, they have a 6.7% position in Amarin. Are they becoming more of an activist on their larger holdings? Food for thought if they change their involvement with Amarin. Thoughts?
Short Interest and "borrow costs": I contacted one of the large discount brokers who told me there was no spike in borrow costs and there is plenty of available shares to borrow (16 million through them alone-.75% annual interest charge). They did mention that some of the sources for shares to borrow can be a little sketchy and unreliable which is why it is classified as hard to borrow. It appears the players and sources of the available shares are responsible for the noise.
The short numbers as posted are not indicative of a difficult stock to borrow IMO. Based on Yahoo numbers as of April 30th, I calculate the short position to be 7.3% of the float.
For what that was worth.
Lizaa, Amarin cannot do what you are asking about. They could list the stock on foreign exchanges to raise money, but they cannot segregate ownership by geography tied to specific revenues. A wholly owned subsidiary (ex: a company they acquired) could be spun out, but you cannot dilute equity ownership in the manner you are questioning. The bio company you referenced probably went bankrupt and the creditors to that company became the new owners. The previous equity owners probably lost everything they had invested.