Global“Like a fool, I didn’t sell when the Mithra stock was at...

“Like a fool, I didn’t sell when the Mithra stock was at 29 euros”

A technical assembly without interest”, one of the shareholders said to us after this, when we were rejected, our proxy to represent a shareholder having not been accepted. “Fornieri voted for the capital increase, like everyone else. There will therefore be a dilution, inevitably. There will be nothing left for small shareholders… It will perhaps one day go back to 7 or 10 euros per share… but I bought at 20-21. I bought out of Liège patriotism. It’s wasted money”, he tells us again. “Like a fool, I didn’t sell when the stock was at 29 euros”, he tries to say ironically. “Co-founder Foidart is still there, there hasn’t been a word about the Uteron Sellers case (a debt owed by Mithra for patents linked to Estetrol, Editor’s note) and CEO David Solomon didn’t say a word. There is more atmosphere in the AGMs of the big banks”, he exclaims again.

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”In any case, the CDMO building is truly sublime”. It’s hard to say he’s wrong, the whiteness of the walls, the floor and the “clean” aspect are imposing, if we want to see the positive aspect.

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“There will be a dilution effect. But the company can still find cash”

The more negative aspect, for current shareholders, is therefore this capital increase and the dilution effect that accompanies it. “The issuance of subscription rights and investment options has been approved, allowing Armistice Capital to carry out, under certain conditions, capital increases in the Company”indicates Mithra.

”This is nothing new, the vote validates what was announced. So we didn’t expect too much movement on the stock. All that was needed was the agreement of the shareholders, which was therefore recorded.”, says Thomas Vranken, analyst at KBC Securities.

There will be a dilution effect. But the company can still find cash, it can sell the CDMO or its generics in portfolios. This financial situation is not surprising for a biotech. There are still opportunities, although she must be careful on a few points”, explains the analyst, rather optimistically.

For the Uteron Sellers case, it’s difficult. Mithra should renegotiate this debt. But this is just a personal opinion, it’s not very clear yet. We will see what the new board will do but I don’t think it will be priority number 1.”

In terms of this capital increase, in total, it will be 10 million subscription rights, which can be exercised at a price of 2.25 euros per new share (with a duration of 5 years), and 10 million investment options, which can be exercised at a price of 2.25 euros per new share (with a duration of 18 months).

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Cash tensions

Finally, a Mithra document that we were able to consult also indicates that Mithra should run out of cash by September 2024. “The company’s twelve-month working capital deficit is approximately 57 million as of the end of September 2024”, we can read there, while the company already faces negative equity (-8.7 million euros).

And that “not to mention what they will have to pay to their Estetrol supplier, PCAS, with whom they are in court”, another source tells us. The amount on the table mentioned at the start of 2023 was 31 million euros.

Note, however, that the stock gained more than 3.50% this month, after the severe tensions of October.

We are pleased with the vote of shareholders in favor of all the points discussed during this last extraordinary AGM, allowing Mithra to benefit from the capital, according to the conditions previously agreed, to continue our growth and transformation operations.”, for his part, declared David Solomon following the vote for the capital increase.

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