Ergomed Share Discussion Threads

[timbo003] 13/7/2017 07:29

A very informative meeting yesterday, around 30 PIs present, mainly high net worths, slides should be available later today, I gained a number of new insights I'll write up a few notes later today (or possibly tomorrow).

[timbo003] 11/7/2017 14:18

Ergomed will be at the ShareSoc investors seminar tomorrow evening, I intend go along to that and will report back in due course

[timbo003] 06/7/2017 14:25

Cel-Sci announced today that are extending the DD series warrants again (by another month), expiry date now August 10th



Presumably they expect further (positive) FDA news on the Multikine study, or an arbitration ruling on the $50m dispute with inVentiv sometime before then.

[bermudashorts] 01/7/2017 08:27

That is good news and well spotted!!

[timbo003] 01/7/2017 08:05

Could there be light at the end of the tunnel for Cel-Sci and their suspended Head and Neck cancer study?

This was released after the close on Thursday and the shares responded with a 20% rise on Friday:



The warrant extension announced earlier this month still looks optimistic, the exercise price following the share consolidation earlier this month is $4.5 (I think), so there is still a way to go.

I believe the £856K doubtful debt referred to on page 80 of the Ergomed 2016 accounts may be down to Cel-SCi, so perhaps payment is not looking quite so doubtful now?



Ergomed are at the ShareSoc evening event on Wednesday July 10th, so I will ask about it then.

[sharesoc] 29/6/2017 07:34

There is a detailed report on Ergomed's recent AGM which can be found in our members network:

To access the report, you'll need to be a full member of ShareSoc, which is a not-for-profit organisation that supports individual shareholders and campaigns for shareholder rights. If you're not already a member you can join here:

Once you've joined, you'll receive an invitation to register for our "members network" private social network, from where you'll be able to access the report (and reports on 100s of other meetings). If you're already a member and have any difficulty accessing the report, please do not hesitate to contact us here:

[bermudashorts] 26/6/2017 07:53

Thanks very much Timbo - great report!

[timbo003] 26/6/2017 07:18

As posted on the ShareSoc AGM forum.....


Ergomed AGM report (ERGO)
This year’s Ergomed AGM was held at the offices of Covington & Burling LLP, 265 Strand, London WC2R 1BH starting at 9.30am on Friday 16 June 2017.

For Investors who are unfamiliar with the company, Ergomed is a hybrid Pharmaceutical Services company offering a complete Clinical Development service for investigational drugs and a Pharmacovigilance monitoring service for marketed products. What makes Ergomed fairly unique amongst its peers is its co-development model, whereby it shares the cost of clinicals trials on new medicines that it runs on behalf of clients in exchange for a royalty (typically 10 – 15%) on sales.

Ergomed was founded in 1997 and listed on AIM in July 2014 raising £11m at 160p/share valuing the company at £46m. The number of shares has increased from 28.75m at the IPO to 40.6m. The shares are currently priced at around 196p/share valuing the company at around £78.5m.

Links to the Company web site, the Annual Report and other useful information are shown below:

Company Website:

Annual Report:

Equity Development Research Reports:

Proactiveinvestor Ergomed page:



There were around 15 attendees at the AGM which included the BOD, representatives from the Registrar, the company’s NOMAD (Numis) and myself (the only PI present).

The recently appointed Chairman, Peter George (PG), kicked off the meeting by introducing the BOD and the newly appointed CEO designate (Dr Wan Weng). PG then proceeded to instruct attendees on the procedures that need to be followed if a Poll were to be called for any of the resolutions. This left me somewhat confused, as around 17.6m shares (44%) of the total issued shares are held by Miroslav Reljanovic (MR) the Ergomed founder and CEO who was present at the meeting. Furthermore none of the resolutions looked particularly controversial:


Resolutions 1-5 were all passed on a show of hands with no dissenters and with large (or unanimous) majorities in favour of each resolution on the proxies:


For resolutions 6 and 7 (disapplication of pre-emption rights) all attendees voted in favour, however we were informed that there were more proxy votes recorded against (58%) the two resolutions than in favour (42%), so a poll was called and the resolutions were subsequently passed (>75% in favour).

The Chairman then formally ended the meeting and invited questions.


Q&As

(Note: all questions and answers are paraphrased, they do not represent a verbatim account)

I started off with a tongue in cheek question on whether MR would remember to fill out his proxy form next year to ensure that no polls would be required. This raised a smile.


Q: Given the significant opposition behind resolutions 6 and 7, can I assume that one or more of the institutional shareholders have a problem with pre-emption rights and why do you suppose they were opposed given that your stated intent is to grow the company through both organic growth and acquisitions, with the latter requiring new capital which may have to be raised rapidly and discretely?

A: Two institutions voted against the disapplication of pre-emption rights, we cannot publically name which ones, but you could probably work it out from the published information on shareholdings of the larger shareholders.

We don’t know why they voted against, often institutional shareholders follow recommendations by ISS (see link below), but in this case ISS gave no recommendation on voting.


Q: I have been following the recent travails of one of your co-development partners Cel-Sci,


Can you comment on the likely hood of their Head and Neck cancer study ever recommencing? [Note: Cel-Sci seem to be a one trick pony with their entire future dependant on FDA giving the all-clear to recommence their studies to look at MultiKine for Head and Neck Cancer and Perianal Warts. They have recently submitted yet another response to FDA questions on Multikine and they have recently extended the expiry date of some out of the money warrants (DD series) by one month to July 10th so they now cover the period when the next FDA response is expected (beginning of July). They are also litigating for damages against InVentiv (the former CRO involved with their Multikine clinicals) with a judicial decision now imminent].

A: We cannot comment on Cel-Sci, all we have to go on is their public announcements.
[Note: I came at this question several times from different angles but got more or less the same response. All of the broker forecasts assign zero value to this co-development, so there should be no downside if the project tanks, but considerable upside if FDA’s response is favourable]


Q: Do you think you might have been a bit generous in the milestone payments offered with the purchase of Haemostatix (Peprostat) last year, given that the initial clinicals look very promising and the product pipeline addresses an unmet need in the multibillion dollar Haemostasis market? I am also a shareholder in Kings Arms Yard VCT (who was one of the vendors) and I have followed Haemostatix for a number of years, so I am not really complaining.

A: Agree that the prospects for Peprostat and the rest of the Haemostatix pipeline look promising, a Phase IIB clinical on the lead product (Peprostat) is ongoing (read out due Q4). The bulk of the milestones are related to sales targets, so we would be delighted if these targets were met.

Q: Are there any of the competitors developing similar products to Peprostat given the large potential market and unmet need (a convenient to use, fast acting thrombin replacement for the prevention of bleeding during surgery)

A: There are a couple of other competitor products undergoing development (from Arch and 3D-matrix) which both employ “self assembly peptides”, these are being developed by relatively small quoted companies so we can follow their progress, there may be other developments within large pharma that we are not aware of.

Q: If you do raise further funds via issue of further equity, could you consider including ordinary shareholders. Open offers are generally considered too expensive and company broker’s are rarely keen on them as they do not generate broker revenues, however a number of AIM listed companies have recently used Primary Bid to raise a small portion of placing funds from private investors, many of whom are existing shareholders. Private investors participate on the same terms as institutional investors and the company pays a smaller % fee (split between the broker and Primary Bid) for money raised via this route.


A: Thank you. We will look into this.



Post meeting note:

I have now had the opportunity to have a very cursory look at the two competitors mentioned for Peprostat:

Arch Therapeutics (OTCBB:ARTH) is a small US biotech listed on the OTC bulletin board, their lead product is AC5 (a non-viscous clear liquid) which gels on contact with bodily fluids. They appear to have decent preclinical data and are attempting to go down the medical device route for product registration


3-D Matrix inc. is a US subsidiary of a larger Japanese technology company (quoted on the Japanese market), they are currently developing PuraStat for a number of medicinal purposes including haemostasis, gelation appears to occur on contact with bodily fluids. 3-D Matrix also seem to be going down the medical device route to obtain product approval.


Both AC5 and Purastat appear to unaffected by commonly used anticoagulants and neither appear to share the mechanism of action of theHaemostatix products which utilise endogenous fibrinogen in order to facilitate clotting and haemostasis.


This raises two additional questions to my mind with respect to Ergomed’s Peprostat and the pipeline products.
1) Will they still be effective if the patient is taking anticoagulants?
2) Will Peprostat also go down the medical device route for approval (rather than as a medicinal product)?

[timbo003] 21/6/2017 09:16

Yes BS, the new CEO was there, there were around 12 suits, so I did feel a bit out numbered, we had a very good Q&A session though. I should be able to get detailed notes done sometime today/this evening, but I do have a lot of other distractions to deal with today.

[mfhmfh] 21/6/2017 08:34

good news that peprostat update will be this year, only around 6 months to wait. I also agree that the potential of the product seems underrated.

[bermudashorts] 21/6/2017 08:32

Timbo,

By the way, I know he isn't due to join until July but was the new CEO at the AGM?

[bermudashorts] 21/6/2017 08:30

Timbo,

Yes positive RNS. For any who may be unaware, PeproStat is a coagulant, designed to stem bleeding during surgery. The current phase IIb is recruiting patients who are undergoing liver/soft tissue surgery, vascular surgery or spine surgery. It's administered during surgery on a sponge applied directly to the site of the bleed. Of course the trial is randomised and double blinded so nobody yet knows the outcome, however, would have thought that given the immediate nature of the application, it would become apparent very quickly if there were issues and surgeons would be reluctant to enrol patients to the trial. Just my opinion of course but the fact that recruitment is ahead of schedule and results will be released early is encouraging.

Interesting that you were the only PI at the AGM. This stock seems to be very much under the radar if the bb's are anything to go by. Would be very interested in your feedback from the AGM if/when you get a chance.

[timbo003] 21/6/2017 08:00

Some reassuring news on Prepostat (Haemostat) this morning,.
I suspect that the value of Prepostat and it’s follow on product is grossly undervalued in the Analyst’s sum of the parts valuations.

For example, Equity Development have it down with a risk adjusted value of £12.1m (circa $15m) equivalent to around 30p/share





However, the initial phase II studies have shown that it appears to be a product with unique advantages over existing treatments for a market which is estimated to be worth around $2.8Bn in 2020.

Something not quite right there given that they have 100% ownership.

On a related subject, I attended the AGM on Friday, which was an interesting affair, (I was the only ordinary PI present). My notes are in preparation.

[bermudashorts] 10/6/2017 07:02

Timbo, thanks for that. Believe they're also expecting news any day now on their case against previous CRO, InVentiv.

[sharesoc] 09/6/2017 20:03

Ergomed present at our Leeds seminar on Tuesday which may be of interest for shareholders and potential investors. More details at:

[timbo003] 08/6/2017 21:25

The Leeds seminar is a bit too far for me to travel on Tuesday 13th, so I'll hang on and go along to the AGM instead on Friday 16th June which will be held at 265 the Strand in Central London, I'm not too keen on the 09:30 start time though!

I see there has been quite a bit of news from Cel-Sci over the last few days:


They submitted yet another response to FDA on June 5th, so we now have another 30 day wait for further FDA feedback. They are also extending the term of some out of the money warrants from June 8, 2017 to July 10, 2017 which are exercisable at $0.18. The current share price is quoted at $0.0997, so someone in the company is hopeful that FDA will relent and let the Head and Neck cancer study recommence.

[sharesoc] 30/5/2017 23:46

Ergomed present at our next Leeds company seminar which may be worth attending if you are a shareholder or potential investor in the company, see: for more details.

[bermudashorts] 30/5/2017 19:54

No RNS from Ergomed re. Cel-Sci or have I missed it?

[bermudashorts] 24/5/2017 13:15

Not looking good and would assume that under the circumstances more cash is going to be hard to come by. Best hope I guess is a quick and positive settlement on the arbitration with previous CRO - more bad news on that front could cause even more damage.

Just in case anyone is looking in without reading the history, we aren't discussing Ergomed here but one of their development partner's trials (Cel-Sci) which has been put on a full hold by the FDA!

[timbo003] 24/5/2017 12:58

I wonder how long they can carry on without another fund raise?

The share price movements today should give us a clue:

[bermudashorts] 24/5/2017 11:20

Seems the FDA have decided that removal of the clinical hold for Cel-Sci isn't warranted at this time. Shame but not a great surprise. Guess we'll have an RNS later from ERGO.



hxxp://www.businesswire.com/news/home/20170524005345/en/CEL-SCI-Corporation-Releases-Letter-Shareholders

[bermudashorts] 22/5/2017 16:20

Yes - I'm surprised. To be honest I wasn't expecting good news from the FDA and had assumed that the lack of news wasn't a positive sign. Seems the market isn't sure.

[timbo003] 22/5/2017 15:47

The share price action isn't giving much away, up around 4% on the day

[timbo003] 22/5/2017 13:42

I would assume the absence of news means FDA have not lifted the ban on recruitment (at least yet)

Should this be the case, then presumably Cel-Sci would want to have talks with their creditors prior to any announcement, hence the delay?

[timbo003] 22/5/2017 11:56

>>>>BS, as we all know, new broker can quite often mean new fund raise.

SS has stated on a number of occassions that they remain interested in buying PV businesses priced at 8X earnings, especially if one deemed suitable were to come up for sale in the US.