Hi Cherry:
Thanks for sharing your discussions with Mr. Innes(DI). You have also raised an extremely important issue wrt a reverse split(RS). Here are some comments.
First off, I don't know DI but with over 30 years in the markets and managing $175 million in assets, he brings two important capabilities to NWBO: a client book and market experience. As such, he will bring alternatives to financing/clients which NWBO likely did not have available previously. He will hopefully be able to advise and guide management wrt to market reaction and the suitability of whether a reverse split is advisable. For reasons that I will explain herein below, I firmly believe that an RS is not advisable and would engender disastrous harm to the share price. I have been through a couple of these and, trust me, they were not pretty.
In order to attract an individual like DI, NWBO most probably had to offer him a handsome compensation package and NDA-like information, all of which convinced him to leave his likely well-rewarded and comfortable position at Oppenheimer. I doubt very much that he is exaggerating his background. It is easy enough to check. Managing $175 million in assets means that he has been quite successful in his business and would have little to no reason to jump over to NWBO. By doing so, he has invested not only his money but also his career in NWBO. DI is certainly not stupid and would not have made a move like this where he is "fully" invested unless he was convinced of the opportunity. Relatively few individuals invest both their money and careers in a single company. Diversification is usually better, unless, of course, one is pretty sure about the configuration of the tea leaves.
I think that DI's hire has important ramifications. However, I think many on the MB ascribe too much concerning DI's influence. DI is the new guy on the block. He is not going to change PR policies over night. Changing NWBO's secretive culture is a difficult if not impossible undertaking. At least de facto, he will be vetted by LG, his boss for all practical purposes, on what he can say to investors and what he can do. DI can certainly recommend a certain course of action, but LG is the decision maker. Right now, DI is an extra layer between LG and investors. It will be DI who takes up the bulk of responding to shareholder and MB inquiries. Since he is likely being well paid for this, let's hope that his hire is worth it to enable LG to pursue other important activities. IMHO, if he can dissuade any RS course of action, his hire will have been well worth it, at least to me. DI will need to be very skilful in his dealings with LG who, I think, is very difficult to persuade and is a lawyer to boot. DI certainly cannot circumvent LG with LP or the BOD and so he will be walking along a tenuous tightrope. Certainly not an insignificant challenge.
Right now, I think that DI has been well indoctrinated by LG. His statement to you wrt to an RS and that there is "nothing off the table" is very reminiscent of a similar oft used expression by LG. I doubt very much that DI will reveal any more information and be less circumspect than LG has been. He will be schooled by LG until it is felt that he can fly with less(pun intended) oversight. In this respect, I expect little change except for the IR mouthpiece. It should be well noted that DI's at least official role is to manage IR. It does not mean corporate media marketing and PR. For now, at least, DI will be parroting the company's various mantras to the shareholder/potential client constituency. In this respect, DI will not bring anything new to the table.
Is DI an appropriate hire for IR? Yes, indeed, I believe that he is. Brokers are skilled in IR; that's what they do in order to be successful. You don't get a $175 million client book, if you are not skilled in IR. So undoubtedly, DI is a good fit for this position.
NWBO needs to have very strong positive results for four main reasons: approvals by RAs so it can become part of mainstream SOC for at least ndGBM; credibility for its platform for other indications; NICE/ insurance reimbursements; and, last but not least, share price appreciation.
If NWBO is going to get any significant share price appreciation, it must achieve the primary/secondary endpoints in addition to OS milestones/longtail which covers a relatively significant spectrum of ndGBM, e.g., M+ plus MES as an example which likely corresponds to about 60% of the ITT. In fact, all important endpoint protocols should be met for purposes of significant as well as sustainable share price appreciation. If that is the case, the share price will rise organically without need for an RS. The value of the therapy is undeniable and the demand by patients(and doctors) for it unstoppable and over-whelming. This appears pretty obvious to me.
In the above respect, LG's statement on April 28, 2018 is prophetic as well as telling in connection with NWBO's strategic direction: they will continue the trial and collect data until the results are "undeniable".
Not just for RA approvals but also for all the other objectives mentioned above including critical share price appreciation. Thus it is vitally important to achieve the PFS and OS endpoints for the share price appreciation objective even if falling short of their achievement would not necessarily derail RA approvals at least wrt some jurisdictions. Accordingly, LP is in no rush to get to data-lock but is "proceeding" towards it and is thus very vague about the timeline to top line data revelation, all the while collecting data and hoping that it optimally covers ALL the bases. LP and LG know this is critical for the all important share price appreciation objective.
OTOH, if the PFS/OS achievement of the endpoints falls short, an RS won't help. It will just give the shorts more welcomed altitude to short the bejesus out of the stock.
Bottom line, an RS won't be advisable in either case. If the results are stellar and all endpoints are met, the share price will overwhelmingly take care of itself---at least I would think so. If the results are mixed and endpoint achievements fall short, an RS won't help. Nefarious market forces will make sure of that
The real question is whether there will be appreciable and sustainable share appreciation in the face of stellar top line results or are dark market forces too powerful to prevent what would otherwise be a corollary result? This would be a case of great science but a bad investment none-the-less where you can't fight nefarious "city hall". What a shame. JMHO.
AI
