Sums it up in a nutshell:
The History Of Avid
For the last two decades, Avid (under its previous name, Peregrine Pharmaceuticals) pursued a twin-track strategy of drug development and CDMO operations.
In early-2016, after spending more than $300M attempting to develop its flagship drug bavituximab, the drug failed its Phase III clinical trial.
Management reacted to the news with half-measures – modest cost reductions in drug development, a small investment in the CDMO business, and no cuts to corporate – when an aggressive pivot from biotech to CDMO was required. Peregrine was left with a bloated cost structure, overpaid executives and board members, a biotech business in shambles – and a valuable, under-the-radar biologics CDMO with tremendous potential.
In 2017, an activist investor arrived to set things straight.
At Peregrine’s annual meeting in October 2016, shareholders registered their discontent with the company’s direction by casting a significant protest vote against the board of directors (even with no challenger on the ballot) and by nearly voting down the firm’s executive pay package.
When the activist investor announced it had launched a proxy campaign with a well-qualified slate of candidates for the 2017 annual meeting, it quickly became clear that the vote would be a rout. It was only a matter of time before the incumbent board folded.
In December 2017, the two sides came to an agreement. Peregrine accepted a full overhaul of its board, including the nomination of three candidates from the activist slate plus a new independent chairman. In return, the activist agreed to stand down. Peregrine now had a new board, a new strategy, and a new path forward for its business.
