Nymox fights back mutiny, defending its actions and throwing jabs at former execs

Nymox fights back mutiny, defending its actions and throwing jabs at former execs

Nymox Pharmaceutical has spoken out against two former leaders who formed a rebellion based on the company’s refusal to accept a proposed partnership. The biotech said the team-up would have saddled it with debt and said the two leaders were pushing the deal for their own personal benefit.

The catalyst for the company’s troubles was Nasdaq delisting its stock last week. The removal came after the Irvine, California-based biotech failed to get its shares back above the minimum $1 price within a six-month window.

The stock value dropped after last year’s refusal by the FDA to consider the approval of Nymox’s Nymozarfex, a drug designed to be administered in office for patients with benign prostatic hyperplasia, or BPH, a condition that causes an enlarged prostate gland.

Expected European approvals for the treatment weren’t enough to rope back investors who had fled after the American rejection. Once Nymox’s shares were booted from the Nasdaq, the company’s former chief financial officer, Christopher Riley, emerged leading a mutiny. Dubbed “The Committee to Restore Nymox Shareholder Value,” the group lashed out at the biotech for turning down a proposed partnership with AscellaHealth, a pharmaceutical solutions provider.

The group claimed that the deal would have provided the company with much-needed revenue as it awaits a potential Dutch approval of Nymozarfex.

The group posted a lengthy letter penned by Riley, who Nymox let go in June after just four months with the company. In the letter, Riley described his work to set up what he described as the “company-saving deal” with AscellaHealth. Another letter posted by the group was written by Randall Lanham, a former director and executive officer for Nymox. Lanham was also involved in setting up the deal proposal with AscellaHealth.

In response, Nymox has provided its reasoning for shutting down the deal, saying the proposal wasn’t in the best interests of the company and its shareholders. According to a July 13 company release, the agreement was set up so AscellaHealth wouldn’t pay any cash for the Nymox rights it would receive. Instead, the potential business partner would loan cash to Nymox, creating debt for the biotech.

Nymox also went after the intentions and credibility of Lanham and Riley. Under the proposal, Riley and Lanham would have immediately been awarded up to 18 million shares of common stock and future shares of the company, according to Nymox.

The biotech also pointed out that Riley, after serving as CFO for three months, would be appointed to the company’s board, joining an AscellaHealth executive with whom Riley already had a business relationship. What’s more, Lanham was already on Nymox’s board and would be joined by another affiliated board member and attorney, meaning the four would make up a majority of Nymox’s board.

When trying to convince Nymox to accept the deal, Riley and Lanham represented the terms involving their proposed 18 million shares and board control as being “boilerplate,” according to Nymox, while also being aware that the “transaction would have resulted in extraordinary awards” and “other personal benefits” for the two.

Nymox also said it learned shortly after being presented with the proposal that Riley, Lanham and the affiliated board member had served as CEO, founder and general counsel, respectively, of an unrelated company for several years. None of the three had ever revealed to Nymox their past roles or the connection between the three.

Nymox was also told by one or more shareholders that Riley and Lanham had previously sought out financing for their unrelated company from Nymox shareholders but didn’t disclose this to Nymox’s board or CEO.

“Our fiduciary responsibilities are first and foremost to the shareholders of Nymox, and the above terms were not in the best interests of Nymox shareholders,” Nymox founder, President and CEO Paul Averback, M.D., said. “We took appropriate corrective actions and will continue to do so.”

error: Content is protected !!