Meditech chairman, CEO resign at AGM

Biotech veteran Bob Moses, the chairman of Melbourne biotech company Meditech (ASX:MTR), had harsh words yesterday for the shareholders whose lack of support for the re-election of CEO Chris Carter as a director on the board led to both he and Carter resigning their positions.

Announcing the resignation, Moses said that while the group of shareholders voting against Carter only represented approximately 20 per cent of the company's issued shares, the votes represented the majority of the proxy votes cast on the resolution, forcing Carter to withdraw the resolution and tender his resignation.

"Clearly this vote of no confidence makes it untenable for the CEO to continue with the company, and vicariously, the implications are the same with respect to the chairman," Moses told the meeting.

"A strong and effective chairman either supports his CEO 100 per cent or not at all. There is no middle ground. My main criteria for judging the performance of a CEO is value creation for shareholders. Chris Carter has certainly made an important contribution to the creation of value in Meditech. Accordingly, I support Mr Carter 100 per cent."

He went on to say that while shareholders appeared to be happy with the operations and performance of the company, disagreements from some shareholders about the allocation of new shares in last year's AUD$4.8 million placement -- which saw Queensland Investment Corporation become a majority shareholder in the company -- and $2 million share purchase plans were the cause of the dissatisfaction.

"A few years ago, Meditech was a company with an enormous amount of 'hype' and very little -- if any -- realisable substance, but a share price over $1," Moses said. "Today, Meditech is a company with no hype, but very substantial substance and a share price of $0.27.

"Perhaps the disenchanted shareholders prefer the company revert to the good old days when, in my view, it was little more than a 'punting' stock. Perhaps disenchanted shareholders are only interested in instant gratification which arises from a volatile share price; perhaps they simply haven't bothered to due the homework required to really understand and appreciate the quality of the company.

"These are just speculations; to my knowledge nobody can say for certain, but the phenomena I described appears to be endemic within the biotech sector of the Australian share market," he told the AGM.

Accomplishments

Moses said he and Carter were very disappointed with the outcome. Both will stay with the company until a new CEO and chairman have been appointed to ensure an orderly transition.

Both he and Carter were extremely proud of the accomplishments of the company, Moses said, and were confident that the capital markets would eventually acknowledge Meditech's value. The company recently announced that early results from its Phase II clinical trial for lead product HyCamp were "exceptionally encouraging", leading to an increase in patient numbers in the trial.

"While it is still early days, the clinicians are advising us that if results coming in over the next 6-12 months replicate those reported to date we will have achieved a primary endpoint in spades," Moses said.

Moses also noted that the events had caused the company's board to look more closely at a number of merger propositions received by the company over the last six months. Biotech analyst and co-editor of the Bioshares newsletter, David Blake, said the resignations of Moses and Carter were sad and disappointing.

"It's obvious to me that these minority shareholders in Meditech are not driven by a solid knowledge of Meditech's potential but are driven by short-term-ism and greed, which is counterproductive and could see a really promising technology end up in the garbage bin," he told Australian Biotechnology News.