RE:RE:RE:RE:RE:Advisory BoardI think you're overstating the impact of Citagenix. I didnt notice much change in wider market interest from before and after Citagenix deal. They were largely ignored then, they're ignored now. It may have not been the positive they hoped for but I dont see it as that much of a negative either. You're also ignoring all the positive strides Antibe has made that many biotech just fail to achieve.
Biotech development is a challenge, many fall along the way, a discontinued Phase I trial can easily sink a biotech, certainly make its future a struggle. My personnal view is they've done exceptionally well just to keep moving this thing forward, to have three regional deals in their pocket and to be closing in on the big prize. It wont take an experienced executive to get us to the next major milestone and they cant afford to buy one now.
I agree if this company was in California, run by Ivy-leaguers with a long history of biotech experience then it would be valued completely differently. It isnt, it never has been, when you invested (at peanut prices) it wasnt any of those things. Its pointless to repeatedly complain about what Antibe isn't. You probably bought in at a valuation of $10mil or $20mil or $40mil now you want it at $500mil? Well dreams dont come true. You get the management you invested in with all their strengths and weaknesses, you get the products you invested in with all their pros and cons. You dont get to buy a KIA and then get handed a Mercedes for free.
What you need to invest in is a new company Allogene. Two ex-Kite executives and a respected biotech analyst make-up the management, investment community gives them $700mil, Pfizer give them access to a couple of promising early products and they have 5 years to make a success. Problem is you'll have to buy in at a valuation of $1.4bil.
You get what you pay for!
CyrolQue wrote: I argue that ATE is undervalued primarily because of Legault. He is the one that bears the responsibility about the Citagenix fiasco and his presence casts a cloud over ATE’s prospects. He screwed up once. What makes you sure he won’t do it again? Another unrelated acquisition maybe? A wise investor would command a high risk premium on ATE just because of that. I believe the market fears that ATE mgmt does not have what it takes to make it big. The risk of Legault screwing it up again is too real and too big to not take into account.
Regarding Legault’s “openness”: to my knowledge his has never admitted the mistake he made about acquiring Citagenix. Maybe he made a bad call (very-very bad call) or maybe he was conned. I don’t know. But ok, it was a mistake to buy Citagenix. What has Legault done to make the company profitable ever since? More importantly, where are the results? It’s being three years since the acquisition. There are no excuses anymore. He has failed.
Worse, I have seen no sincere comments from his side regarding Citagenix. All his communication revolves around wishful thinking: “now we’re going to grow and blah blah blah”. This is not my definition of a CEO being “open”.
I have my share of experience with markets and companies. I have seen CEOs openly admitting a bad business call, many times an acquisition, at conference calls. This was sweet music to my ears. Being upfront, sincere, reliable, these are qualities that the market values greatly. None of these attributes apply to Legault.
I keep on referring to the Citagenix acquisition not only because of the huge loss that caused shareholders but, even more importantly, because of its symbolism. So long as Citagenix and Legault are on board the market will command a higher risk premium on ATE.
I don’t know the man. But his presence is a drag on ATE. He might be replying to all the emails he receives but his business track record is just horrible. He should be removed.
Instead, ATE grants him the biggest share of the RSUs. The market sees all that and values the company accordingly.