TENAFLY, N.J., Aug. 28, 2018 /PRNewswire/ --
The following letter was sent to the Board of Directors of Neuralstem,Inc. (CUR) today:
August 28, 2018
William Oldaker- Chairman, Neuralstem Inc.
Xi Chen, Cristina Csimma,
c/o Oldaker Law Group, LLP
818 Connecticut Avenue, NW
Washington, DC 20006
To the Board of Directors of Neuralstem:
As you may recall, I met most of you at the annual meeting. I have been a shareholder for six years and currently hold over 215,000 shares of Neuralstem making me one of the larger holders of the stock. I am surprised and very disappointed that you did not take my advice at the meeting of hiring an investment bank with strength in mergers & acquisitions and partnerships in the biotech industry to explore strategic alternatives for Neuralstem. Cash is running out, and the future of the company is in jeopardy should you not arrange financing in some form in the next six months.
While I know you are pursuing partnership opportunities, the advantage of having an investment bank involved is that they have the experience and expertise of working on partnerships on a daily basis and know the typical terms for these types of transactions. That is something the management and Board of Directors of Neuralstem do not possess. In addition, having an investment bank provides a third party to negotiate the terms, insulating management and the Board from direct discussions. At the same time, an investment bank would be able to explore the possibility of the sale of a part or all of Neuralstem, providing a parallel track to open another channel for financing.
The current course of simply hoping discussions lead to a partnership that management and Board would negotiate, runs the risk of pushing up against running out of cash. There is nothing in the track record of management and this Board and its members that would indicate you are taking a course that you can successfully implement. Three of the Board members have been in their positions for more than seven years with a fourth having served since 2014. Since inception, the company has made a number of poor decisions resulting in burning through over $200 million of cash without having a product reach market. Neuralstem's market capitalization has decreased from a peak of $400 million in 2014 to its current level of $18 million. This is in spite of having four clinical trials with results ranging from very good to outstanding. The medicine is innovative and potentially life-changing, yet the management of the company has not been commensurate. There have been a series of poor decisions regarding financing as well as operationally not filing for RMAT with the potential of accelerated approval. The FDA environment has been shifting towards a quicker approval of products like NSI-566 for ALS, yet the company has inexplicably not pursued this with strenuous diligence. It is either a matter of management and the Board not keeping up with changes within the FDA, or seeing these changes and not being able to act. Either way, the chasm between the science and the management has never been wider.
The responsibility of the Board of Directors is to look after the strategic direction of the company as well as making sure the operation of the Company is executed in a manner that ensures the future of the company and maximizes shareholder value. To do anything less than making sure you are exploring every avenue for the company at this critical juncture would constitute a breach of your fiduciary responsibility.
It is not too late to rectify the narrow trail you are currently pursuing by hiring an investment bank with the expertise and experience that the management and Board lacks. I look forward to your response.
Media Contact: Jon E. Einsidler 201-227-2519
View original content:http://www.prnewswire.com/news-releases/hiring-of-investment-banker-crucial-to-neuralstem-success-300703509.html
SOURCE Jon Einsidler
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