Alcobra Pharmaceuticals Ltd. (Nasdaq: ADHD) today published a document stating that the Brosh Capital fund, which has a 17% stake in Alcobra, had submitted documents for convening a special shareholders' meeting on May 23 for the purpose of dismissing the Alcobra board of directors and appointing its own representatives in their place. Alcobra stated it would employ legal means to prevent the convening of the shareholders' meeting, which it said was illegal.
Meanwhile, Alcobra is preparing for a campaign if it does not succeed in preventing the maneuver. In its announcement, the company asked its shareholders to reject Brosh's proposals. Alcobra is arguing that Brosh is attempting to take over the company without paying a control premium.
The contest between the parties follows a steep drop in Alcobra's share price in recent years, after a number of clinical trials for drugs developed by the company for the treatment of attention deficit disorder failed. The share has lost 95% of its value since September 2014, when the main trial of Alcobra's flagship drug was unsuccessful. A trial of another drug has since failed. Following yesterday's announcement by the company, its share price rose by 7.5%, pushing its market cap up to $35 million.
Brosh Capital asserts that the company has lost the confidence of the market, and also made grave allegations concerning its expenses, which it said were inflated. As if to combat these allegations, the company decided to lay off seven of its nine employees. The complaints, however, concerned the salaries of the CEO and CFO and office expenses.
Alcobra CEO Dr. Yaron Daniely is currently negotiating his appointment as CEO of Yissum Technology Transfer Company of the Hebrew University of Jerusalem, and sources inform "Globes" that if the parties agree on the terms, the appointment is likely to take effect soon.
Published by Globes [online], Israel Business News - www.globes-online.com - on April 26, 2017
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