iBio Fiscal Quarter
ended September 30, 2021, Conference Call Transcript
November 15,
2021
Tom: Before opening up the Q&A session, I would
like to address our shareholders with respect to the upcoming
Annual Meeting, scheduled for December 9th. We are encouraging shareholders of record as of
October 15th to participate in the online proxy voting process.
Input from our investors is vital for the continued strategic
growth and development of our company. Thus far, we have been
pleased to see a high level of engagement and debate, and to
facilitate the continued dialogue, we previously posted a Q&A
page on the Investors section of our website. However,
there are three questions about the proxy that we’ve received
to-date with some frequency, so we’d like to take the occasion of
this call to address the general form of each of those.
So, I’ll turn it over to Steve to tee
those up for us. Steve?
Steve: Yes, Tom, thanks. Here’s one that we get
a lot:
Q: How is this year’s proposal different than last
year’s, and why the change?
Tom: Last year’s proposal was for an increase in the
authorized share count only, and although we had 55% of respondents
vote in favor of the increase, we did not have enough total votes
to reach a quorum. This year’s proposal also results in a net
increase in the number of unissued authorized shares, but the Board
of Directors recommended a reverse split, too, so that the stock
price might be more attractive to certain institutional investors
as well as retail shareholders.
Steve: OK, here’s another one. You report having over
$82M in cash, so why do this now?
Tom: Although we don’t necessarily have to pursue a
financing at this moment, it is important to bear in mind that,
consistent with the operating model for all development-stage
biopharmaceutical companies, iBio requires the necessary
flexibility to access capital markets at opportune times. This is
necessary to support the growth of our proprietary pipeline, as was
done – by way of example - with the RubrYc opportunity. The ability
to flexibly access capital when market conditions are favorable, is
critical for our future growth, and our ability to drive
shareholder returns. Our Annual Shareholder’s Meeting is also
the appropriate time and venue for asking our investors for this
added flexibility.
Steve: Last one - Why reverse split at the expense of retail
shareholders?
Tom: We recognize there is an underlying concern from
some retail shareholders about the potential for stock price
depreciation following a reverse split. Frankly, I think that
concern is often justified, particularly in cases where a company
is doing it primarily to avoid a delisting. However, outside of
those cases, when we look at examples of companies enacting a stock
consolidation because they are executing their growth plans and
want to potentially appeal to a larger investor audience, it can be
quite positive. iBio is a good example of the two sides of this
coin. Back in 2018, before the current management team joined the
company, iBio completed a 1 for 10 reverse split. The Company
didn’t have the newsflow; nor the quarterly investor calls; nor the
expanding clinical pipeline or progress in its Services business
that we do today. So, iBio quickly experienced stock price declines
all the way down to $0.05/share in the absence of any immediate and
significant progress in its CDMO business. Now, juxtapose that with
where we are presently with a strong cash position, demonstration
of the performance of the FastPharming platform, and a growing list
of biopharmaceutcal assets in our pipeline. So, the Board is
recommending this move now in the hopes that it will benefit of all
of our shareholders – retail and institutional alike – as we
continue to execute our strategic plan to address important unmet
medical needs and realize our vision to make sustainable
FastPharming the preferred alternative to traditional mammalian
bioprocessing.