A Tale of Two Companies Part II
Now back to our tale. After reading that the FDA approved LaViv, I fully expected Fibrocell’s share price to increase 50 -100%. Can you honestly blame me? LaViv was the first autologous cell transplant technology for aesthetic facial rejuvenation with further indications down the road (acne scarring, full face, periodontal etc.). If this cannot raise the share price then what can? A simile would be good ol’ Jed Clampett shootin at some food when up through the ground came a bubblin crude – oil that is, black gold, Texas tea- only to find that now, his property has decreased in value!!!
I was in a daze. I could not believe my own eyes. Surely this was someone’s idea of a sardonic joke. But who would be that deranged? Trying to make sense of these events was maddening. No matter how much I agonized over the data and the resulting share price, this was shaping up to be a Greek tragedy. I don’t mind a Shakespearian tragedy. God knows I have character flaws that have, and will, shape my destiny; but to have the company’s share price plummet despite the long arduous work that led to these amazing results is just exacerbating! I felt that I was in some bezaro universe where the fabric of reality was torn and I was drifting without the benefit of natural laws to guide me. As I lie bemused, a thought suddenly emerged in my mind – out of nowhere, with a big bang – and guided me back to reality.
I suddenly realized that this is a Shakespearian tragedy and that gave me some hope. All tragedies are regrettable, however I am sure you would agree that one that is due to one’s own actions is infinitely more preferable than one that is outside of one’s control. After all, one can work on one’s character. But whose character is to blame? And what characteristics have to be modified? After much contemplation, the answer to these questions became obvious. The culprits are the management and the shareholders. Yes, that means me. It’s true the management runs the company and the trials, but I have an share in the success of the company and thus must shoulder some of the responsibilities.
Management failed – big time in my opinion – to adequately capitalize on FDA approval. They or their marketing department were somehow able to grab defeat out of the jaws of victory. To say that this was a marketing failure is akin to saying that the Hindenburg disaster was an engineering glitch! Management should have been out front with the news – on CNN, CNBC, FOX Business Chanel, Wall Street Journal, and Bloomberg etc.… Basically, they should have been in the face of anyone and everyone who has eyes and ears. Amarin did just that. Fibrocell did not.
Now to the shareholders. The bile regurgitating, gut-wrenching fact is that we, the shareholders are also culpable. Message boards are inhabited by all sorts of creatures – some intelligent while others not so, some hoping to capitalize on a company’s share price appreciation, while others hoping to capitalize on a company’s share price depreciation. It is the responsibility of intelligent, well-informed shareholders to post well thought-out messages – not to do so creates a vacuum that becomes filled with nonsensical drivel intended to misinform the potential investor and drive the share price down. To this end, I would like to thank Atownwater, Laltrader, Biolover, Eyebuystox, Kipperdo, Rickkkk, and others (I apologize if I missed someone, this list is not all inclusive) who tirelessly search and provide information that we all can use.
As shareholders we also have a responsibility to evaluate our investment strategy to see if modification is necessary. When objectively evaluating my investment in Fibrocell I have come to the following conclusion: 1- My assessment of Fibercell’s autologous cell transplant technology was accurate. 2- My assessment of the likelihood of FDA approval was correct given the Advisory Committee report. 3- The potential for LaViv in the aesthetic market is significant (my opinion only, not fact). I base this upon discussions with other dermatologist as well as interest from my own patients. 4- My assessment of management’s credentials, experience, and potential was woefully wrong. Without really knowing the management, I retained my investment (Actually 30%. I sold 30% pre-PDUFA and 40% the day of PDUFA) in Fibrocell post-FDA approval. My mistake was that I fell in love with the technology and I exacerbated that mistake by allowing it to cloud my judgment. Great technology gets you FDA approval – great management gets you a company with a successful product while rewarding investors for their trust.
After this painful catharsis I realized that this tale might not be so much a tale of two companies, but rather, a tale of mice and men. Men know what they own, why they own it, and forge their destiny. Mice, although they may be blessed with good fortune, have their destiny determined by forces they see outside of their control.
