April 26, 2022

Newsletter: Poison Pills & Contingency Plans | April 26th, 2022

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Poison Pills & Contingency Plan


Last newsletter, we outlined a normal week in the life of Elon Musk.

 

To recap:

 

1. Random Tesla SEC filing noting he had 9% of Twitter

2. Twitter wigs out, invites Musk to Board

3. Musk accepts

4. Musk trash talks Twitter on Twitter (LOL)

5. Employees wig out

6. Musk is off board

7. Musk squints eyes and laughs evil laugh

8. Musk decides he’s going to take Twitter over the old-fashioned way ala Carl Icahn

9. Twitter creates something called a poison pill

10. Twitter agrees to terms (private $$$)

 

Oh, Musk also launched the first non-governmental crew in space, opened the Gigafactory in Texas rodeo style, and presumably answered some emails and stopped into a Cavendar's to buy a cowboy hat.

 

What did you do last week?

 

So, I’ve received a lot of questions over the last couple of weeks, about poison pills and bear hugs. Lot of info on Google of course, but if you want to get a good idea of how this works practically, tune into HBO’s Succession. If you get hooked, let me know who your favorite character is. Team Tom all the way. The end of the first season is a great example of a bear hug.

 

Back to the pills, in the event one day you accidentally bump into Carl Icahn at a party and scuff his Diciannoveventitres and he announces loudly that your company is his next target— hopefully, your attorneys crafted something called a Shareholder Rights Plan into your corporate documents and all you need do as the Board is “adopt it.”

 

There are a few different varieties depending on which way they “flip” but essentially the plan allows the board, in this case, Twitter, to flood the market with discounted shares to everyone but Mr. Musk.

 

It’s a very effective defense created in the 80's by a lawyer to stop corporate raiders. Most raiders have a point either they can’t afford, or they don’t want to afford. In this case, it appeared to be used for its other lesser-known feature - staving off bids from other potential acquirers as it also gives you some time to mull things over.

 

Twitter has now agreed to sell and will be taken private making everyone a lot of money.  Twitter up 5%.  Dogecoin up $0.03 as well. Do you sell at $0.17?

 

***

 

In local news, in case you didn’t know, it’s an exciting time to be a life sciences company in Houston right now.

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2021 was a recording-breaking year for Houston and not just when compared to neighboring Texan cities— even on the national level.

 

Thanks to our friend Chris Wadley, Managing Director of Health and Life Sciences at the real estate firm JLL. JLL is partnered with Hines and Levit Green. The latter is currently in the middle of Phase 1 construction of a 53-acre life science park across from the TMC Innovation space.

 

Houston life science appears to be thriving, but let’s switch gears to some deals that are unfortunately diving.

 

***

 

Another day, another SPAC falling out. This time a MedTech company is feeling the pain.

 

Accelus (and its minimally invasive spine treatment) and SPAC partner CHP Merger Corp. are calling it quits after last November’s merger agreement, dumping a potential $482M down the drain, citing “market conditions” as the reason why.

 

But you know there had to be some Biotech Blues somewhere in here, right? (more sad songs listed below)

 

Foresite Capital ditched its $250M-SPAC-dreams for Foresite Lifesciences Corp without giving any specific reasons. The correction is coming. Brace yourself and read more about it below.

Treating Kidney Stones With Burst Waves

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There’s a one in ten chance that you’ll get a kidney stone at some point in your life.

 

Whether you’ve experienced one or know someone who has— the pain associated with them is infamous.

 

Sometimes they can pass with little to no discomfort, but other times surgery or other treatments are required to break down and remove the larger stones. Shockwave therapy is used as a non-invasive solution but can still be painful.

 

However, there may be a safer, painless procedure coming down the pipeline.

 

An article from the Journal of Urology reports on a study in which 19 patients were administered burst wave lithotripsy (BWL) for ten minutes each, resulting in a median 90% reduction in stone size. Nine of the 23 stones were completely broken into pieces smaller than 2mm using this treatment.

 

The study’s results are promising but more data is needed to conclude the painlessness of the procedure and the effectiveness of the treatment on all different body types.

The Pill… For Men... Finally OTW?

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Male contraception in the form of a pill has been in the works for decades, but it’s never made it past the trials stage. Scientists at the University of Minnesota looking to change that. They created a contraceptive pill that has been 99% effective in preventing pregnancies in mice.

 

The pill, which is non-hormonal and did not produce any adverse effects, interacts with a protein and a form of Vitamin A that contribute to the production of sperm.

 

After a four-week period, the pill reduced sperm counts and was 99% effective in preventing pregnancies. After about six weeks, the mice were able to bring back their sperm count to normal levels.

 

It might be a bit too soon to jump in bed with this idea until human trials replicate the same results, but the results are still promising. Those trials are set to take place later this year. Now we’ll see if men can remember to take their pill.

Biotech Bust and Pharma Filling Up

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How much is too much? Well, when it comes to Biotech companies— looks like we’re hitting the limit.

 

No matter how novel or ground-breaking your innovation may be—it’s a tough time to be in Biotech. This is evidenced by the increasing number of layoffs reported every single month. To the point where Fierce Biotech has a site dedicated to tracking each one.

 

Competition is good for business but not to the point where companies with the same therapeutic area are struggling to find patients for clinical trials. And though innovation is at an all-time high— investors are cautious about whose pockets they’re lining, setting their sights sureshots rather than the maybe-it’ll-pan-outs.

Being the best may not be as important as being first. If you’re first, you have a better chance at catching the eye of an investor and getting funded or at least getting picked up in an M&A deal. In today’s market, those are your best paths for success.

 

There’s always luck though, but who’s hedging their bets on that? As an investor, I’m certainly not.

 

Tumultuous time for Biotech but Pharma is thriving. Funny how that works. Developing a Covid-19 vaccine can’t hurt.

 

Here’s Fierce Pharma’s top 3 most profitable companies from 2021:

  1. Johnson & Johnson

2021 revenue: $93.77 billion

2020 revenue: $82.58 billion

 

  1. Pfizer

2021 revenue: $81.29 billion

2020 revenue: $41.9 billion

 

  1. Roche

2021 revenue: $68.70 billion

2020 revenue: $63.36 billion

FDA Says AI Lacks A Doctor’s Insight

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Advancements in AI and machine learning are happening rapidly. We even covered an algorithm that bested doctors in predicting and determining arrhythmia risk levels in our last newsletter.

 

But the FDA cautions AI, specifically as it relates to detecting strokes and similar conditions, isn’t to the point where it’s better than a trained medical professional, as stated in a letter penned by government agency.

 

In short, the FDA stresses that computer-aided triage and notification (CADt) devices for intracranial large vessel occlusion (LVO) are meant as a “prioritization and triage tool and not a diagnostic device.”

 

Reliance only on these tools rather than professional expertise may result in misdiagnosis, injury, and even death.

 

The FDA event lists some resources for reporting adverse effects or suspected adverse effects generated by these devices that aim to identify obstruction of the large arteries in the brain, which lead to acute ischemic strokes.

 

***

 

Good luck to my team in Dublin this week at MedTech Innovator and MedTech Strategist. Glad you all finally made it. I heard there were some significant flight challenges. Have a pint or two on us and post some pics on our LinkedIn, so we can live vicariously.

 

Also, if you’re an early-stage MedTech company and looking for money and some momentum, visit M1MedTech.

 

Very truly yours,

 

Kevin

Upcoming Event - Innovation Summit in Dublin, Ireland 2022

April 26th-28th, 2022 - Dublin, Ireland

platinum sponsor

Europe’s largest Medtech partnering and investment conference is back in-person.

This  conference features:

- A  mix of keynote presentation and plenary sessions

- Bringing  together some of the leading voices in today’s medtech world to provide both  insight and opportunity.

- This  conference will offer a broader and deeper take on the issues and concerns  driving the medical device industry today.

Book  a meeting directly with Proxima's business development strategists here.

Device Talks Boston 2022

May 10th-11th, 2022 - Boston, Mass.

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DeviceTalks Boston will unite MedTech’s most innovative professionals...

And help attendees clear troublesome bottlenecks in these critical stages:

  • Innovation & Funding
  • Prototyping & Product Development
  • Manufacturing & Sourcing
  • Regulatory, Reimbursement & Market Development
  • Engineering Tools & Technology

Co-located with the Healthcare Robotics Engineering Forum and the Robotics Summit and Expo, DeviceTalks is an essential meeting for entrepreneurs, engineers, and other professionals developing the latest tools used to treat patients and cure diseases.

 

We hope to see you there and check out the event agenda for this awesome line-up!

M1 Applications Are Now Open! 

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M1  MedTech is thrilled to announce that applications are open for our Fall 2022  cohort! We are seeking early-stage medical device companies that are ready to  bring the next big medical breakthrough to market.

 

🚀 Ready to launch? Head to our website, M1MedTech.com, to  submit your application by our May 31, 2022 deadline. We can’t wait to get  started!

 Catch All of Season 1 of the Inventing Tomorrow Podcast Now!


Listen HERE.

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