• Affected shareholder continues to receive supportive communications from other dissatisfied IMV shareholders
  • Continuing GMI Executive Reward is unwarranted given its impending cash shortage
  • IMV’s Disclosure Regarding Amended Stock Option Plan Selectively Incomplete

HALIFAX, Nova Scotia, June 11, 2021 (GLOBE NEWSWIRE) – Following press releases issued on June 1 and June 4, 2021, the relevant shareholder (the “Shareholder concerned“) from IMV Inc. (“IMV“) is issuing this press release to provide a further update and raise additional concerns regarding IMV.

Support for the “hold” vote continues to grow

Since the press release of June 4, 2021, the relevant shareholder continues to receive communications from other dissatisfied IMV shareholders who have already expressed or indicated that they intend to vote “abstain” for Andrew Sheldon and Julia P. Gregory at the next IMV AGM. scheduled for June 18, 2021. A number of shareholders based in North America, Europe and the Middle East have contacted the affected shareholder to express their support for the call to change the affected shareholder.

Disclosure of IMV’s stock option plan is selectively incomplete

On June 7, 2021, IMV issued a press release announcing that (i) ISS and Glass Lewis had recommended that shareholders vote for the re-election of all nominees proposed by IMV and (ii) IMV would propose a further amendment to its Plan. ’employee stock options (the’Plan”) To limit the maximum number of Company shares that may be granted under the Plan to 8% of the issued and outstanding shares of IMV.

What IMV refused to mention is that ISS recommended not to approve the IMV plan for three reasons: (i) the Plan is excessively expensive; (ii) the Plan contains a problematic change of control clause; and (iii) the CEO compensation program does not include performance equity.

ISS conclusions in this regard align with those of the relevant shareholder: IMV has consistently increased the CEO’s cash compensation without him having a significant in-game skin in the form of compensation items performance-based. This is a clear divergence between the incentives of management and the interests of shareholders.

The affected shareholder asks IMV to freeze the cash compensation of the CEO and CFO at their 2020 levels and to withhold any additional compensation and future salary increases until the IMV share price. warrants a reward for senior management.

Lack of proper supervision and cronyism

The concerns raised by ISS, including the lack of a long-term performance incentive for the CEO and problematic change of control arrangements, demonstrate the lack of adequate independent oversight within IMV.

Indeed, Mr. Sheldon and Mr. Ors have worked together for almost two decades. Mr. Ors reported directly to Mr. Sheldon at Medicago, a company of which Mr. Sheldon was CEO, from 2001. Mr. Ors left Medicago to join IMV in 2015, and shortly thereafter recruited Mr. Sheldon as a non-executive. Chairman of IMV in 2016. Similarly, IMV’s CFO, Pierre Labbé, was employed by Medicago as CFO before joining IMV.

The relevant shareholder believes that the directors of IMV, in particular the chairman, should be independent and objective to management – and not someone who has worked closely with this same management team for 20 years .

IMV will need cash to fund ongoing clinical trials

Based on IMV’s interim financial statements dated March 31, 2021, IMV has cash and cash equivalents of approximately $ 30.45 million, down 16% from $ 36.27 million. dollars as of December 31, 2020. At this depletion rate, IMV will no longer have cash to fund operations by spring 2022.

Worse yet, shareholders have every reason to expect IMV’s cash flow needs significantly increase in the second half of 2021 and through 2022. According to IMV’s clinical pipeline disclosure, IMV’s Maveropepimut-S / CPA treatment for diffuse large B-cell lymphoma completes its Phase 2 clinical trial and is expected soon start a phase 2b clinical trial. IMV treatments for ovarian cancer and the basket trial for bladder cancer, liver cancer, and high microsatellite instability (MSI-H) progress through phase 2 clinical trials to phase 2b clinical trials. And IMV’s breast cancer treatment is nearing the end of its Phase 1 clinical trial and heading into a Phase 2 clinical trial.

Phase 3 trials tend to be the most expensive, involving hundreds of patients, and take longer than other types of trials. A study published in the British medical journal based on 101 new drugs approved between 2015 and 2017, found that the median cost of a clinical trial is around US $ 19 million.

In short, IMV has a number of exciting drug candidates reaching a stage where they will require significant additional expense for clinical trials, but IMV does not have sufficient cash flow to fund these trials. IMV earned $ 69,000 in interest income last quarter and recorded a loss of $ 6.957 million for the same period. It is clear that the only way for IMV to advance its current projects is to provide a significant additional injection of capital.

IMV’s poor performance means raising additional capital will be extremely dilutive

Since IMV will need to raise additional capital, the collapse in IMV’s share price means that any equity fundraising will be massively dilutive for existing shareholders.

As IMV accelerates towards highly dilutive potential funding, management’s cash compensation continues to grow steadily, as detailed in the press releases issued by the relevant shareholder on June 1 and 4, 2021. It is clear that neither the trajectory of the company nor its rate of cash consumption justifies the increase in cash compensation and the allocation of cash bonuses to its executives. This is yet another example of the mismatch between IMV’s management incentives and shareholder interests.

The relevant shareholder urges shareholders to vote “hold” for Andrew Sheldon and Julia Gregory.

Further information:

The relevant shareholder is Dr Michael Gross.

The information contained in this press release does not constitute, and is not intended to constitute, a solicitation of a proxy within the meaning of applicable securities laws.

Notwithstanding the foregoing, the affected shareholder voluntarily provides the disclosure required under subsection 9.2 (4) of NI 51-102 – Continuous information obligations applicable to solicitations for public distribution.

Any solicitation made by the relevant shareholder will be made by him and not by or on behalf of IMV’s management. All costs incurred for such solicitation will be borne by the relevant shareholder. Proxies may be solicited by the relevant shareholder in accordance with an information circular sent to shareholders, after which solicitations may be made by or on behalf of the relevant shareholder by mail, telephone, fax, electronic mail or other electronic means. as well as by newspaper or other media. publicity, and in person by the directors, officers and employees of the shareholder concerned, who may be specifically remunerated for this purpose. The relevant shareholder may also solicit proxies based on the exemption from public disclosure of the solicitation requirements under applicable Canadian securities laws, including through press releases, speeches or publications, and in any other manner permitted by applicable Canadian law. The relevant shareholder may engage the services of one or more agents and authorize other persons to assist it in soliciting proxies on its behalf, which agents would receive the customary fees for such services. If the relevant shareholder begins a solicitation of proxies, the proxies may be revoked by a written act by a proxy shareholder or by his or her duly authorized officer or attorney, or in any other manner permitted by law. None of the shareholders concerned, nor, to their knowledge, any of their partners or affiliates, has a material interest, direct or indirect, through the beneficial ownership of securities or otherwise, in any matter proposed to the Meeting. IMV’s head office is located at 130 Eileen Stubbs Avenue, Suite 19, Dartmouth, Nova Scotia B3B 2C4.

Caution Regarding Forward-Looking Statements

This press release contains forward-looking statements. All statements contained in this file which are not clearly historical in nature or which necessarily depend on future events are forward-looking, and the words “anticipate”, “believe”, “expect”, “estimate”, “plan” and similar expressions are generally intended to identify forward-looking statements. These statements are based on the current expectations of the Concerned Shareholders and on the information currently available. They are not guarantees of future performance, involve certain risks and uncertainties that are difficult to predict and are based on assumptions about future events which may not prove to be correct. Relevant shareholders assume no obligation to update any forward-looking statements contained in this press release, except as required by applicable law.

Dr Michael Gross
[email protected]
(902) 401-6808

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