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Motif Bio: Lessons from a failed pharma

Catastrophic pharmaceutical failures can provide interesting entry points to investors who know how to trade them
June 16, 2021
  • Motif Bio failed to get its novel antibiotic approved in the US leading to the eventual collapse of the company
  • Investors have voted to reject a reverse takeover that might have rescued the company, but given too much to the existing directors

A few years ago, I recall that Interserve (IRV) – now delisted – proposed a deleveraging plan that would see existing shareholders’ equity reduced to 5 per cent of the company.

The situation at Interserve left investors with little choice, but one shareholder – Coltrane Asset Management – did not agree with the plan. Despite the belief that administration would follow if the deleveraging plan wasn’t voted through, Coltrane still voted against it. Administration followed and everyone lost everything.

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