[Asia Economy Reporter Jang Hyowon] With the extraordinary general meeting of shareholders that will decide the fate of Helixmith's current management just six days away, conflicts between minority shareholders and the current management are reaching a peak.
According to industry sources on the 8th, Helixmith will hold an extraordinary general meeting of shareholders on the 14th at the request of the minority shareholders' coalition. The agenda will include the deletion of articles related to directors' remuneration and retirement benefits, the dismissal of the current management, and the appointment of new management.
The reason minority shareholders requested the shareholders' meeting is due to distrust of the current management. Helixmith conducted two rights offerings in 2019 and last year. Although they initially stated in 2019 that there would be no rights offering within two years, controversy arose when they proceeded with another capital increase. Additionally, dissatisfaction among shareholders grew as key executives, including CEO Kim Sun-young, did not participate.
The minority shareholders plan to dismiss the current management and appoint former Commissioner of the Korean Intellectual Property Office Choi Dong-gyu, along with individuals from the investment, bio, and legal sectors, as new directors. They are reviewing technology licensing-out (L/O) of Helixmith’s core pipeline, the gene therapy Engensis (VM202), and the introduction of new businesses.
The minority shareholders emphasized, “Engensis requires large-scale funding for additional clinical trials and commercialization. If the current management remains, they may conduct another rights offering targeting shareholders, so attracting external investment or technology licensing is necessary. The most urgent task now is to prevent the 160 billion KRW capital raised through last year’s rights offering from being squandered by the current management.”
They also pointed out that the report by the proxy advisory firm Glass Lewis, presented by Helixmith, was a one-sided claim that did not reflect the minority shareholders’ opinions at all.
The minority shareholders stated, “After the proxy advisory report was released, we conveyed the minority shareholders’ position to Glass Lewis, but they responded that they provide the same fair purchase opportunities and prices to both minority shareholders and management. This means the report was prepared after only hearing the management’s side.”
On the other hand, Helixmith responded to the Glass Lewis advisory report by saying, “The company or the meeting proposer can each provide opinions on the report, but these are not reflected in the main content of the report and are only included as supplementary notes. We have not held any meetings or consultations with the agency.”
Helixmith also expressed opposition to the proposed amendments to the articles of incorporation suggested by the minority shareholders. Furthermore, they opposed the new board members recommended by the minority shareholders, citing a complete lack of experience in the bio industry.
Helixmith stated, “Our company requires management with key business experience and expertise in new drug development such as biopharmaceuticals. We are currently at a critical stage, including the second Phase 3 clinical trial in the U.S. for Engensis targeting diabetic peripheral neuropathy (DPN). In this situation, it is necessary to maintain the existing articles of incorporation that require bio industry work experience.”
They added, “This is to achieve the mission of innovative drug development based on the tangible and intangible value and technology of our pipeline. We believe it is necessary to continue the projects led by the current management, who have been leading research and clinical trials, without disruption to achieve successful results.”
Meanwhile, Helixmith also recommended one candidate each for inside director and outside director to strengthen the board’s management and oversight functions. These candidates are the current vice president of Helixmith and a legal professional.
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