|Melbourne, Australia, 06 April 2022||ASX:
ADR Level 1:
Dear fellow shareholders, friends of the Company,
In my first letter to you for 2022 I provide updates on several matters which are important to the ongoing objectives of CLINUVEL.
Change in the Geopolitical Environment
First, I cannot ignore the ongoing conflict and tragedy in Ukraine which affects us all personally and as a company operating in uncertain times. On behalf of the Board of Directors, I want to share our concern and sadness over the Russian-Ukrainian war taking place in front of the eyes of the world.
In the past years, our CEO told the Directors and shareholders that strong markets and high valuations could not continue, and he wanted to prepare the Company for this. With regret, I say now that his vision was right – it is clear that he could not have predicted the COVID-19 pandemic and the war in Europe – but he generally believed that corrections to the markets and economies were coming. As the world is facing new threats, CLINUVEL continues to progress its strategic initiatives with better finances than earlier years, and a vision from our CEO and CFO, embraced across our worldwide team, on how to manage the Company during future times.
In my life, I have been involved in many companies who have had a short-term strategy, not thinking that the good times could end, and this has always resulted in a catastrophe for the owners and management. This is not the case for CLINUVEL, which is constantly preparing for uncertainty in the world and is positioned to continue its growth. Looking back over three years, our management team took many essential decisions. Instead of where CLINUVEL is today, we could easily have been one of the many biotech companies on the list with less than one year of cash, in danger of not existing and giving reason for fear to our shareholders. Instead, I look back at a period, when we performed very well, following a clear strategy. Yet, like many other companies, our value has fallen the last few months. The price will come back up again, I don’t have any doubt about this.
As we see unexpected events influencing the world and our lives, I believe that one of my tasks is to oversee the Company’s passage through stormy waters. Our management has outlined our estimated planned investment of A$175 million across FY2021-25 to arrive at an integrated specialty pharmaceutical company with expertise in melanocortins. I want to share with you once again the Board’s views on the Company, as we have spent much time discussing executive performance, the Company’s finances, and direction, but also our corporate responsibility.
Renewed CEO and CFO Executive Agreements
I have previously communicated the importance to the Company of stable and effective executive management, a view that is even stronger in times of weak economic conditions. One of my most important tasks the last year has been to assess if it was in the interest of shareholders to appoint two new executives, the CEO and the CFO, or continue with the existing leadership. After consultation during COVID-19 lockdowns, the Directors of Board concluded that it would be a big mistake not to extend the contracts of the two executives. On behalf of the Board of Directors, I am now pleased that both the CEO and CFO have agreed to extend their employment contracts, the CFO until 1 July 2024 and the CEO to 1 July 2025.
In many companies, we find long-term cash incentives and business generating incentives for the CEO, however, I have worked with the Remuneration Committee, legal teams, and proxy advisors to remove these from our CEO’s employment contract. I must thank the many CLINUVEL shareholders for their feedback over recent months and I acknowledge your wish to see stability, even more so in today’s economy. We also listened to you that you want innovation and share this objective.
CLINUVEL’s Value and Outlook
I also look at CLINUVEL as a reasonably large shareholder in the Company. I took a risk to invest a large sum of my family funds in 2018 because I believe in the Company’s direction and leadership. Since this time, I have never sold CLINUVEL shares because I support what we do for patients and families who are dependent on us, and I also have a long-term investment horizon.
Most of you understand that things are not so straight forward in biotechnology, it is not always fast to introduce products to markets. New developments need time and thorough research and planning. Sometimes there are setbacks and at other times, good progress. With focus and determination, I am confident that further success will come, there is so much being developed. The Board shares the view of many shareholders that the Company has not yet reached its full potential. Our management team will complete a successful journey to leave the Company in a position of pride and strength.
Like you, the Board wants to see a steady improvement in the value of the Company, and this team will lead us to more successes, I have no doubt.
I am very optimistic about the future of CLINUVEL.
Finally, I welcome Sir Andrew Likierman to the Board, a safe pair of hands when it comes to commercial enterprises, his vision and passion to succeed will add to the strength of our Board, I am sure of this. We look forward to working with him on the next phase of CLINUVEL’s journey.
During the most difficult times the world is experiencing, I wish you safety and patience.
CLINUVEL PHARMACEUTICALS LTD