Nuvo Pharmaceuticals Inc NRIFF

No Vote

[consultant99]

The Nuvo Shareholder lists were acquired late last week and we have some really great volunteer shareholders that are working the phones as we speak. A website was established to provide shareholders with the reasons we have concerns and are planning to vote No. You can visit the site at Change Nuvo

I personally bought into the company because of Pennsaid. The job Horizon has been doing marketing it in the US is vindication of why I invested in the first place - it is a world class drug and could very well do $500 million to $1 billion annually in sales someday.

There has been a lot of diversitions and frustrations along the way. Nuvo Research is a drug development company with a manufacturing capability - I get that. What I don't understand is why management keeps wanting to move away from that. For instance:

• Management initially wanted to stop contract manufacturing, close the Quebec facility but ultimately ended up stopping the expansion and selling off surplus eqiuipment.
• Management sold off the Canadian Pennsaid marketing group to Paladin because Nuvo was not a marketing company.
• In 2011 the rationalization for the Zars merger/takeover was that analysts said Nuvo was a "one trick pony" and needed a diverse base of products to unlock shareholder value.
• To capture the value of Synera, one of the Zars products, Nuvo used a contract sales group in a failed marketing attempt.
• Around the same point in time the company asked for shareholders approval for a RS to increase the share price. "This share consolidation allows Nuvo to attract both U.S. and Canadian institutional investors that avoid penny stock investments and improves our capital structure," said Stephen Lemieux, Nuvo's Vice-President and Chief Financial Officer. "It will also allow Nuvo to continue its capital market strategy of listing its shares on a U.S. based stock exchange in the future.In 2013 the RS went through but there seems to be fewer instituitional shareholders today and no US stock listing.
• Management told shareholders that they would not be diluting the company further. After the RS there were 8.7 million shares outstanding - going into the Special Meeting this has grown to 11.2 million - just 28% more. If the split goes through you can add additional shares for mangement compensation to the share float.
• On April 16th there was a PR that the company had examined strategic alternatives and with a view to increasing shareholder value they were planning to spin-off WF10 related assets into a new R & D company. Beyond 2015 R & D expenditures within Nuvo would be reduced and limited to projects for which partners fund clinical trial costs as Nuvo transitioned from a biotech company concentrated mainly on drug development into a more diversified profitable cash flow positive business.
• The company mysteriously changed course before the WF10 results were released to undertake a different strategy again - this time proposing a split with R & D joining WF10 in a new company and the Pennsaid franchise and manufacturing plant staying with a new Pharma company.

We expect that the success of Pennsaid will drive Nuvo profitability in 2016. If the course announced in April 2015 were followed R & D would be curtailed until partners were found to co-develop the drug pipeline - that makes perfect sense. What makes no sense is to less than 5 months later change course again presumebly before the WF10 results were known.

Shareholders deserve better than this and will be heard on Thursday