Hundreds of investors who saw their savings melt in a Laval pharmaceutical company are showing extraordinary audacity by claiming nearly $ 700 million in damages from one of the members of Canada’s richest family.
1er April 2019, Prometic, a company listed on the Toronto Stock Exchange, announced that it was running out of money and had to take “urgent action” to restructure its debt and bail out.
“When we received the news, our hearts fell to the ground,” says Alain Bilodeau, a shareholder of Prometic.
He is one of 650 investors who recently filed in Superior Court a lawsuit against Thomvest, the investment firm of billionaire Peter Thomson, whose family controls the giant Thomson Reuters.
One share per 1000
Through a subsidiary in the Cayman Islands, Thomvest took control of Prometic in June 2019. A major creditor of Prometic, Thomvest converted its loans into shares and re-injected funds into the company, greatly diluting the existing shareholders.
Following the restructuring of Prometic, shareholders were left with only one share for each block of 1,000 shares they held.
Overnight, more than $ 100 million went up in smoke.
“When you invest in stocks, there is nothing guaranteed, you can lose. But being tricked as we were tricked, that’s another story, ”plague another Prometic shareholder, Marc Samson.
In the lawsuit, the investors, who come from Quebec and three other provinces, allege that Thomvest has displayed “illegal, fraudulent and highly prejudicial behavior”.
Small shareholders have never digested that Prometic completely wiped out the value of one of its flagship products, intravenous immunoglobulin, hitherto established at $ 150 million. According to them, this accounting write-off gave the pretext that Thomvest was looking for to take over the company.
They not only want to recoup the value their investments had before Prometic’s restructuring (29.5 cents per share), but also the return they expected based on an enthusiastic 2018 evaluation by Morgan Stanley (8 , $ 30 per share).
“We believe that the prosecution has no merit and we intend to defend ourselves vigorously”, responded to the Newspaper the chairman of Thomson Asset Management, Eugene Siklos.
So far, Thomvest has not had much success with Prometic, renamed Liminal BioSciences. The company’s stock price has plunged more than 75% since June 2019. A crucial decision by US authorities for the company’s future is expected in June.
Prometic in some dates
- October 1994: Prometic Foundation
- September 2013 : Thomvest makes a first loan to Prometic
- December 2018: Founder Pierre Laurin is leaving
- April 2019: Thomvest takes control of Prometic
- October 2019: Prometic becomes Liminal BioSciences
- June 2021: The Food and Drug Administration must rule on Ryplazim, a flagship product of Liminal
A sad spectacle for the founder of Prometic
Pierre Laurin, who founded Prometic in 1994, is sad to see the fate of his “baby”.
“It’s quite painful to see that”, he confides to the Newspaper speaking of the strong dilution that Prometic shareholders suffered following the takeover of the company by Thomvest in the spring of 2019.
A few months earlier, in December 2018, Prometic’s board of directors thanked him as CEO, a position he had held since 1994. He received nearly $ 2.4 million upon his departure.
“The end was not bitter when I was asked to leave,” says Laurin. I was mature enough to understand. The end became bitter when I saw the people who have supported Prometic all these years watered down to this point. There, it became very bitter, that’s for sure. “
Pierre Laurin acknowledges that Prometic’s financial situation was not easy and that one of the company’s products, a plasma derivative, required a very expensive production infrastructure.
“We were working very hard at the time,” explains Mr. Laurin. […] I haven’t had the chance to prove that we can do it. Then it’s hard to say, as a platform manager [à l’égard de Thomvest] : “Ah, they could have, they could have …” There were certainly other ways of doing things than the one they chose. The one they chose suited them greatly. “
For the money and for the cause
The entrepreneur points out that investors have staked more than $ 1 billion on Prometic over the years. In 2016, Prometic’s market value approached two billion.
“There were so many shareholders who were there for the money, but also for the cause,” he says.
“People calling me, I would tell them good things about what I thought was going to happen, so people would stay. They said to me: “We continue, Pierre”. […] This is where the problem lies “.
Aged 61, Pierre Laurin is now focusing his energies on Ingenew, a pharma specializing in oncology.
“We’re continuing the dream that we couldn’t finish at Prometic,” he says. You have to look forward, there is no point in exorcising the past. You can’t forget what you learned at Prometic. ”