PixarBio CEO’s hostile takeover bid for InVivo Therapeutics, the company he abruptly quit three years ago, has current management shaking their heads.
Frank Reynolds wants to take over the company he abruptly quit three years ago, and he’s playing the Trump card to make it happen.
He even took a page right out of Trump’s campaign book, paraphrasing that, “it’s time to make U.S. pharma great again.”
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PixarBio boldly vowed to acquire InVivo for $77 million in stock in a deal that would close in the first quarter of 2017. The company also said the combined entity would be called Reynolds Therapeutics Corp.
Cambridge, MA-based InVivo seemed baffled by PixarBio’s announcement, said it had nothing to do with any of it, and that the nature of the offer was “not credible.”
An Estranged Relationship
Given the estranged relationship history between Reynolds and InVivo, the hostile nature of this takeover bid comes as no surprise.
Reynolds was CEO of InVivo Therapeutics for about eight years until he walked away without warning in August 2013, citing a medical condition. A co-founder of the company, Reynolds also served as its CFO and board chairman.
Yet three months later, Reynolds started a new company, PixarBio Corp. Around the same time, in November 2014, InVivo sued Reynolds for alleged breaches of fiduciary duties, breach of contract, conversion, misappropriation of corporate assets, unjust enrichment, and corporate waste.
Reynolds countered with a lawsuit of his own, but neither case has been resolved.
Reynolds did not pull any punches in PixarBio’s announcement of the takeover bid, making disparaging remarks about InVivo’s management since he left, and highlighting the company’s 46% stock decline last year. The Nasdaq Biotech Index dropped about 17 percent during the same time.
“I founded InVivo Therapeutics over 11 years ago, but the last 3.5 years have been a black hole for investor’s money,” Reynolds said, adding that the current management team “has been a real dead spot in innovation, failing in the area of shareholder value creation, so it’s time for real change.”
Whose Patent Is It?
InVivo is developing a neuro-spinal scaffold device for people with spinal cord injuries, which Reynolds claims he owns at least some of the patents for.
The company, however, said that Reynolds is not an inventor on any of its patents or patent applications. InVivo said the company has an exclusive license in the field of spinal cord injury to all patents and patent applications for its neuro-spinal scaffold.
PixarBio fired back to insist that Reynolds filed more than 40 patent applications at InVivo, capturing the scaffold “in legal documents.”
Amanda Pedersen is Qmed's news editor. Reach her at email@example.com
[Image credit: Pixabay.]
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