Ziopharm Comments on Institutional Shareholder Services’ Recommendation to Reject WaterMill’s Attempt to Remove Half of Ziopharm’s Board of Directors
ISS Acknowledges Ziopharm’s
Court Filings Raise Concerns About Professional Past of
Ziopharm Recommends Shareholders Return the GREEN Consent Revocation Card
In a statement, the Company said:
“We are gratified that ISS acknowledges that removing half of Ziopharm’s Board and replacing them with WaterMill’s full slate of proposed candidates – including
The ISS report made clear several points relating to Ziopharm’s financial standing and performance, including by noting that “the company outperformed the median of its peer group since Tarriff assumed leadership of the board and since the company ended the
However, Ziopharm’s management team and Board believe it is critical for shareholders to be aware of the following factual errors in the ISS report:
- ISS recommends in favor of fixing the Board size at seven, but their other recommendations would result in an eight-member board.
- ISS states that the Board “rejected” the resignations of
Elan Ezicksonand Dr. Scott Braunstein, but that is not correct. In fact, the Board never rejected these resignations. The Board promptly engaged two leading search firms to identify candidates in connection with the results of the 2020 annual meeting and has accepted resignations as soon as it has found suitable replacements.
- ISS reports
Elan Ezicksonattended “fewer than 75 percent of meetings in 2019”, which is not accurate. Mr. Ezicksonattended nearly 90% of Board and committee meetings in 2019. Mr. Ezicksonattended fewer than 75% of meetings the year before that only because he was unable to participate in two special Board meetings that were called on short notice.
- ISS’ review of Ziopharm’s material weakness is incorrect. The ISS report notes “there is nothing that prohibits the company from disclosing that remediation is underway,” when in fact Ziopharm has disclosed the remediation steps in several filings with the
U.S. Securities and Exchange Commission(the “SEC”), including in its most recent Form 10-Q filed on November 5, 2020.
- ISS also critiques the
Board for the“retention of an overboarded director,” but fails to note that the issue was remedied by the director’s resignation from another board well in advance of the launch of the consent solicitation.
Additionally, ISS recommends in favor of the election of
July 2017, a majority of shareholders executed written consents to remove Mr. Weisas President, COO, and CFO of DemeRx, Inc.(“DemeRx”). Four days later, Mr. Weisresigned from the company.
- Less than a year after Mr. Weis’s departure, DemeRx filed for Chapter 11 bankruptcy. Importantly, in response to
Mr. Weis'screditor claim as part of the Chapter 11 bankruptcy filing, DemeRx claimed that Mr. Weisengaged in a breach of his fiduciary duties, corporate waste, misrepresentations of critical information to prospective shareholders about a clinical trial and misreporting of an FDA submission. Among other things, the DemeRx response notes the following:
“Weis made inaccurate and misleading presentations to the Board indicating that he had achieved certain performance benchmarks, when in fact he had not, resulting in the payment of cash bonuses and other excessive remuneration.”
“Weis engaged in corporate waste by awarding himself stock, a golden parachute, cash payments, and other excessive compensation based on milestones never achieved. Weis wrote his own performance evaluation. Weis painted a ‘rosy picture,’ overstated accomplishments and achievements and progress of a financing plan. Weis made unauthorized payments to himself on his last day of work, withdrawing all remaining funds from the [DemeRX’s] bank account. Weis also made certain to pay his future life insurance on his way out the door.”
“The FDA put [DemeRX’s] research project on a ‘full clinical hold’ in 2014. A potential investor, Kieretsu
“During that time Weis was in charge of [DemeRx], it is estimated that Weis caused corporate waste, damages, and harm to [DemeRx] in the amount of approximately
“Weis also ran up costs to DemeRx of over
1 Objection to Claim filed by
Information related to the
Ziopharm is developing non-viral and cytokine-driven cell and gene therapies that weaponize the body’s immune system to treat the millions of people globally diagnosed with a solid tumor each year. With its multiplatform approach, Ziopharm is at the forefront of immuno-oncology with a goal to treat any type of solid tumor. Ziopharm’s pipeline is built for commercially scalable, cost effective T-cell receptor T-cell therapies based on its non-viral Sleeping Beauty gene transfer platform, a precisely controlled IL-12 gene therapy, and rapidly manufactured Sleeping Beauty-enabled CD19-specific CAR-T program. The Company has clinical and strategic partnerships with the
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including, but not limited to, statements regarding the business strategy, plans and objectives of Ziopharm management and expectations as to and beliefs about the Consent Solicitation initiated by
Important Additional Information and Where to Find It
Ziopharm has filed a definitive consent revocation statement (the “Consent Revocation Statement”) together with a GREEN consent revocation card with the
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Source: ZIOPHARM Oncology Inc