Hawaii Biotech Coup Fails
Hawaii Biotech Coup Fails: Shareholders Vote To Oust Director Seeking Removal of CEO And Fellow Director [The Honolulu Advertiser]
From Honolulu Advertiser (HI) (December 17, 2009)
Dec. 17--An attempted boardroom coup at one of the state’s larger biotechnology companies ended yesterday with the ouster of the director that sought the changes.
Shareholders of Hawaii Biotech Inc. voted down a proposal that would have removed Chief Executive Officer Elliot Parks and fellow director Debra Guerin Beresini from their seats on the board.
Instead they sacked William Ardrey, who had pressed to remove the directors, saying the company needed to more aggressively pursue more revenue and commercialization of Hawaii Biotech’s vaccine technology.
"The majority of shareholders expressed their will," Parks said yesterday after the board meeting.
The vote ended some of the turbulence surrounding Hawaii Biotech and efforts by Australia-based Acuvax Ltd., a company headed by Ardrey that owns 26 percent of the local company’s shares. Acuvax sought a special shareholders meeting to consider dismissing Parks and Beresini from the five-member board.
In the weeks since Acuvax requested the meeting, Hawaii Biotech sought more funding, and said when it couldn’t get board approval for $3 million from a venture fund, filed for bankruptcy.
Since filing the Chapter 11 bankruptcy reorganization, the ‘Aiea-based company has lined up a possible $2 million in new financing and won bankruptcy court approval to draw on the first $500,000 of this.
Ardrey yesterday said he will continue to work with the company but that he still thinks the firm needs new management.
"I absolutely wish the company well," Ardrey said. But he said he believes the company has lacked clear financial plans and strategies as it progresses with expensive vaccine testing.
"But they absolutely never miss an opportunity to miss an opportunity."
Hawaii Biotech is one of the state’s more promising biotechnology companies, having completed a Phase 1 clinical trial of a West Nile vaccine and started Phase 1 clinical studies of a dengue vaccine candidate.
It also is working on a vaccine for tick-borne encephalitis and has vaccine candidates for malaria and influenza.
The privately held company at this point relies on investors, government grants and some royalty revenue to help with its finances. Ardrey said Hawaii Biotech needs to look more broadly at financing and revenue opportunities and that Acuvax had been attempting to bring about those changes.
He said Acuvax also offered to provide a $500,000 bridge loan to Hawaii Biotech just before the bankruptcy filing. Parks said the loan was conditioned on his resigning from the board along with Beresini.
That was turned down, along with shareholders voting down Acuvax’s request to replace the two at yesterday’s board meeting. A majority also voted to remove Ardrey and replace him with Richard Sherman, a former director.
"Management has been aligned very nicely with the majority of the board," Parks said.
"I think the board has been clear and helpful and the company has delivered on the milestones agreed upon."
Ardrey maintained more could be accomplished in terms of funding, budgeting, capital planning and commercialization of technology.
Acuvax, which has had its holdings in Hawaii Biotech diluted by others investing in the company, is a publicly traded company on the Australian Stock Exchange. Its shares closed yesterday at 1.2 Australian cents.
Reach Greg Wiles at email@example.com.
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Posted: December 2009