Shareholder Philippe Wolgen's Performance Rights Schedule - Nov 2019 AGM

macgyver

Well-known member
Schedule A – Performance Conditions
Description of Performance ConditionsPerformance Rights
PC1Executive management and staff succeeding in steering the Company to a:
  1. (i) Market capitalisation of a minimum A$1,700,000,000 - as measured by a minimum of 15 trading days
    during the vesting period - 10% of the performance rights under PC1 shall vest,
  2. (ii) Market capitalisation of a minimum A$2,100,000,000 - as measured by a minimum of 15 trading days
    during the vesting period - 15% of the performance rights under PC1 shall vest,
(iii) Market capitalisation of a minimum A$2,700,000,000 - as measured by a minimum of 15 trading days
during the vesting period - 25% of the performance rights under PC1 shall vest,
(iv) Market capitalisation of a minimum A$5,000,000,000 - as measured by a minimum of 15 trading days
during the vesting period - 25% of the performance rights under PC1 shall vest,
(v) Market capitalisation of a minimum A$7,500,000,000 - as measured by a minimum of 15 trading days
during the vesting period - 25% of the performance rights under PC1 shall vest.
To achieve these targets within the vesting period, the Company must generate returns over a minimum of 15 trading days well above the performance of global biotech indices over a similar period, such as the Nasdaq Biotech Index which performed 30.32% over 5 years (ending June 2019) and 5.54% on an annualized basis over the same period.
Only in case of a recession in the country of the Company’s primary market exchange (recession defined by a contraction of gross domestic product for 2 consecutive quarters) when the Company’s market capitalisation may be adversely impacted by market conditions outside management control, that the market capitalisation targets defined in PC1 (i) to (v) above will be replaced by the following performance targets:
  1. (i) The Company’s growth in share price outperforms either the Nasdaq Biotech Index or ASX Healthcare Index for 1 quarter - after the country has entered a recession - by more than 3.0%, 10% of the performance rights under PC1 shall vest,
  2. (ii) The Company’s growth in share price outperforms either the Nasdaq Biotech Index or ASX Healthcare Index for 1 quarter - after the country has entered a recession - by more than 4.0%, 15% of the performance rights under PC1 shall vest,
(iii) The Company’s growth in share price outperforms either the Nasdaq Biotech Index or ASX Healthcare Index for 1 quarter - after the country has entered a recession - by more than 5.0%, 25% of the performance rights under PC1 shall vest,
(iv) The Company’s growth in share price outperforms either the Nasdaq Biotech Index or ASX Healthcare Index for 1 quarter - after the country has entered a recession - by more than 7.0%, 25% of the performance rights under PC1 shall vest,
(v) The Company’s growth in share price outperforms either the Nasdaq Biotech Index or ASX Healthcare Index for 1 quarter - after the country has entered a recession - by more than 9.0%, 25% of the performance rights under PC1 shall vest.
450,000
PC2
  1. (i) Upon quarterly reporting of A$60 million in cash and cash equivalents held for 2 consecutive quarters, 15% of PC2 shall vest,
  2. (ii) Upon quarterly reporting of A$70 million in cash and cash equivalents held for 2 consecutive quarters, a further 20% of PC2 shall vest,
  3. (iii) UponquarterlyreportingofA$80millionincashandcashequivalentsheldfor2consecutivequarters, a further 30% of PC2 shall vest,
  4. (iv) Upon quarterly reporting of more than A$150 million in cash and cash equivalents held for 2 consecutive quarters, a further 35% of PC2 will be achieved.
Dividends paid out during the vesting period shall be added back to the calculation of the cash reserves. At any time during the vesting period, the ratio between cash and cash equivalents internally generated from the Company’s operations and any debt and/or equity financing which increases cash and cash equivalents must be at minimum 2:3 ratio for any of the 4 performance targets under PC2 to be achieved.
105,000
9
PC3Successful acquisition of a business entity, defined by:
  1. (i) The acquired entity must have generated sales revenue within 6 months of transaction, 50% of PC3
    shall vest,
  2. (ii) CUV Group becomes or remains profitable within 3 years (plus variability of one year) of transaction
    as measured by two successive quarters reporting profitability of the two or more combined entities, 50% of PC3 shall vest.
For PC3 to be achieved, the acquisition must be considered synergistic to the Company’s business operations at the time of acquisition.
105,000
PC4
  1. (i) Upon receipt of first US revenues under the US post-marketing authorization for SCENESSE®, 34% of PC4 shall vest,
  2. (ii) US revenues in year 2 to exceed revenues by a minimum of 10% in year 1, a further 33% of PC4 shall vest,
  3. (iii) US revenues greater than US$10,000,000 in a 12 month period leads to vesting of 33% of PC4.
87,500
PC5
  1. (i) Market launch of first non-pharmaceutical (‘OTC’) product(s) line developed by the VALLAURIX subsidiary entity,15% of PC5 shall vest,
  2. (ii) Total revenues from OTC product lines developed by the VALLAURIX subsidiary entity achieving greater than A$250,000 in accumulated gross sales, a further 30% of PC5 shall vest,
  3. (iii) First topical melanogenic formulation to be used either in animal or in human testing, a further 25% of PC5 shall vest,
  4. (iv) Upon the completion of the first clinical study of a SCENESSE® paediatric formulation (being the completion of a final clinical study report), a further 30% of PC5 shall vest.
175,000
PC6
  1. (i) Upon start (being the closure of recruitment period) of a Phase IIb vitiligo study in North America, 20% of PC6 shall vest,
  2. (ii) Upon disclosure to the securities exchange of the results to the Phase IIb vitiligo study in North America, 20% of PC6 shall vest,
  3. (iii) After the completion of the Phase IIb vitiligo study in North America and prior to the subsequent Phase IIb/III study, upon holding a Type-C meeting (FDA) and acceptance of study protocol for the Phase IIb/III vitiligo study in North America, a further 20% of PC6 shall vest,
  4. (iv) Upon start (being the closure of recruitment period) of the subsequent Phase IIb/III vitiligo study in North America, a further 20% of PC6 shall vest,
  5. (v) Upon disclosure to the securities exchange of the results to the subsequent Phase IIb/III vitiligo study in North America, 20% of PC6 shall vest.
The performance conditions listed in PC6 (i) to (v) above will be considered met if management is able to advance SCENESSE® or any other molecule or product to the same clinical stages in an indication other than vitiligo.
262,500
PC7
  1. (i) Upon the regulatory submission to either of EMA, FDA, TGA, PMDA and Swissmedic to approve SCENESSE® or any other molecule or product enhancing the pharmaceutical product, 25% of PC7 shall vest,
  2. (ii) Upon the regulatory approval by either of EMA, FDA, TGA, PMDA and Swissmedic of SCENESSE® or any other molecule constituting a successful evaluation of a scientific dossier, a further 75% of PC7 shall vest.
212,500
PC8The Board to use its discretion to award performance rights depending on the extraordinary nature of the corporate event(s) achieved and the significant impact on Company's value. It is not certain that these performance rights will be issued during the fixed term of the Conditional Rights Plan, and hence these need to be regarded as a reserve pool enabling the Company to grant in the event of exceptional and unexpected performances which was unanticipated at the time of business planning.
These corporate events shall include, but are not limited to, business generation in new markets without the Company engaging in merger and acquisition activity.
116,250
 

macgyver

Well-known member
Addition to thread of an estimation of when performance rights will vest, c/o @polyphemus.

PC1 is not included here as the performance targets for PC1 are yet to be determined due to the ambiguous wording of the clauses in the article. Refer to the Performance Rights table posted above in this thread for details.

PC-2 105000To ensure prudent financial management for further Company growth
15750(i) Upon quarterly reporting of A$60 million in cash held for 2 consecutive quarters, 15% of PC2 shall vest,100%Q4 20
21000(ii) Upon quarterly reporting of A$70 million in cash held for 2 consecutive quarters, a further 20% of PC2 shall vest,100%Q1 21
31500(iii) Upon quarterly reporting of A$80 million in cash and held for 2 consecutive quarters, a further 30% of PC2 shall vest100%Q1 21 Size of Trials impact reserves but cashflow should cover
36750(iv) Upon quarterly reporting of more than A$150 million in cash held for 2 consecutive quarters, a further 35% of PC2 will be achieved.50%Size of Trials impact reserves. Buy out of cosmetic capability will cost.
PC3 - 105000To diversify the Company whilst maintaining profitability
Successful acquisition of a business entity, defined by:
52500(i) The acquired entity must have generated sales revenue within 6 months of transaction, 50% of PC3 shall vest,100%Acquired entity will be OTC cosmetics. I wonder whos'?
52500(ii) CUV Group becomes or remains profitable within 3 years (plus variability of one year) of transaction as measured by two successive quarters reporting profitability of the two or more combined entities, 50% of PC3 shall vest.100%
For PC3 to be achieved, the acquisition must be considered synergistic to the Company’s business operations at the time of acquisition.
PC4 - 87500To increase the revenue base
29750(i) Upon receipt of first US revenues under the US post-marketing authorization for SCENESSE®, 34% of PC4 shall vest,100%Completed April 2020
28875(ii) US revenues in year 2 to exceed revenues by a minimum of 10% in year 1, a further 33% of PC4 shall vest,100%Will be achieved in Jul-Sep qtr 2020
28875(iii) US revenues greater than US$10,000,000 in a 12 month period leads to vesting of 33% of PC4.100%Will be achieved in Oct-Dec qtr 2020
PC5 - 175000To build further value from internal product development
26250(i) Market launch of first non-pharmaceutical (‘OTC’) product(s) line developed by the VALLAURIX subsidiary entity,15% of PC5 shall vest,100%Q2 21
52500(ii) Total revenues from OTC product lines developed by the VALLAURIX subsidiary entity achieving greater than A$250,000 in accumulated gross sales, a further 30% of PC5 shall vest,100%Q3 21
43750(iii) First topical melanogenic formulation to be used either in animal or in human testing, a further 25% of PC5 shall vest,100%Completed - see pipeline - all are at Phase 1
52500(iv) Upon the completion of the first clinical study of a SCENESSE® paediatric formulation (being the completion of a final clinical study report), a further 30% of PC5 shall vest.50%Tougher than it looks due to ethics
PC6 - 262500To expand its existing pharmaceutical product into a new market and increase commercial opportunities
52500(i) Upon start (being the closure of recruitment period) of a Phase IIb vitiligo study in North America, 20% of PC6 shall vest,100%Should occur Q1 21
52500(ii) Upon disclosure to the securities exchange of the results to the Phase IIb vitiligo study in North America, 20% of PC6 shall vest,100%Should occur Q3 21
52500(iii) After the completion of the Phase IIb vitiligo study in North America and prior to the subsequent Phase IIb/III study, upon holding a Type-C meeting (FDA) and acceptance of study protocol for the Phase IIb/III vitiligo study in North America, a further 20% of PC6 shall vest,100%Prenumbra will win in XP
52500(iv) Upon start (being the closure of recruitment period) of the subsequent Phase IIb/III vitiligo study in North America, a further 20% of PC6 shall vest,100%Prenumbra will win in XP
52500(v) Upon disclosure to the securities exchange of the results to the subsequent Phase IIb/III vitiligo study in North America, 20% of PC6 shall vest.100%Prenumbra will win in XP
The performance conditions listed in PC6 (i) to (v) above will be considered met if management is able to advance SCENESSE® or any other molecule or product to the same clinical stages in an indication other than vitiligo
PC7 - 212500To expand new products in new or existing markets and increase potential revenue base
53125(i) Upon the regulatory submission to either of EMA, FDA, TGA, PMDA and Swissmedic to approve SCENESSE® or any other molecule or product enhancing the pharmaceutical product, 25% of PC7 shall vest,100%Completed TGA submitted
159375(ii) Upon the regulatory approval by either of EMA, FDA, TGA, PMDA and Swissmedic of SCENESSE®or any other molecule constituting a successful evaluation of a scientific dossier, a further 75% of PC7 shall vest.100%TGA should approve in Oct 20
PC8 - 116250To incentivize and reward for unanticipated commercial opportunities which are demonstrably value accretive
116250These corporate events shall include, but are not limited to, business generation in new markets without the Company engaging in merger and acquisition activity.100%OTC cosmetic is planned/ scenesse into middle east and ROW
 

macgyver

Well-known member
Update (Pending edit);
Note: the following is my opinion only. I don’t want to detract from the great work @polyphemus has done already with the above tables. With 15 months left it seemed a good idea to revisit the subject and see what progress has been made compared against this PR package.

PC2: 105,000
36,750 (35%) met/to vest
68,250 (65%) unvested.

A further 31500 will vest, but doubtful on remaining 36750 unless new markets open (revenue from Scotland, France, Israel and Australia plus first revenues from OTC will not be sufficient to accumulate an additional $70+ million cash in bank in approx. 15 months). It’s always been a struggle to see how they could achieve this last metric, the only possibility would be US sales going through the roof. Even first sales from China and OTCs won’t make up the shortfall in the time left.


PC5: 175,000 (100%) met/to vest

All metrics will be/have been met except for Enfance. Regarding paediatric Scenesse, I don't envisage any issues. It must pass no matter what may come, simply because its requirement of their marketing authorisation and also to eek out a couple more years of exclusivity. Clinuvel still has the MA under exceptional circumstances Sword Of Damocles hanging over their head so they can't afford to miss this one. I'm confident they will meet the challenge, but more importantly I think its a key part of the XP program since XP patients require DNA repair from essentially birth to enable them to live a fuller life and also both developments are moving in sync.

PC6: 262,500
0 % met/to vest

A not unsubstantial amount up for grabs here. The FDA have thrown a curveball at PW, possibly due to the conundrum of UV exposure and the use of the topical . Between now and September 2022 it’s possible they could finish recruiting for a Phase 2B vitiligo trial, but if they did that means Clinuvel moved pretty fast after the FDA go-ahead to commence. They certainly have a better chance of advancing AIS to completion of recruitment for Scenesse Phase 2B, or if Clinuvel is successful in convincing the FDA to go straight to Phase 2B for Prenumbra instead by using the reams of data generated from Scenesse through PASS etc. that can be achieved too. I’m not convinced Scenesse is going to meet the expeditious clinical outcome Clinuvel is looking for. They want a direct alternative to Alteplase, something that is administered ASAP with instant peak plasma levels to stave off the incoming inflammatory penumbra. But whichever it is, I think this PC will be met by the end.

Edit: Polyhemus raises as interesting point about Prenumbra possibly treating XP. I think he mentioned previously that an implant would have to be administered between 5 and 15 days according to Clinuvel's patent so most likely 10 days as that is how long the implant lasts. Seems onerous to administer 30+ implants a year and expect patients to risk travelling to the centre, or better put simply unethical. Could Prenumbra satisfy ethics and the patient maintain self dosing with a bottle of Prenumbra at home? I'm not sure whether the formulation will lend itself to XP if they intend to use it in the emergency room with an instant effect, in particular because the liquid afamelanotide will expire quickly in the body as opposed to the implant. I think the shackles on the controlled distribution are going to be loosened somewhat allowing either local GPs to administer the drug, or available for prescription through the local pharmacy. Clinuvel will be well placed to distribute to pharmacies following their acquisition of wholesale license across the US. Perhaps will see B&S Group come into the picture regards distribution in Europe.

PC8: 116250
100% met/to vest.

This is the really interesting one. What constitutes an unanticipated commercial opportunity? Nothing is unanticipated if we know PW. The clinical program follows a “step-wise” approach (read frugal), so it should follow the same would apply in other areas of the Company. China, Japan, and dermocosmetic OTCs are known by shareholders as stated goals of the company. The wording of this PC is deliberately vague and open to interpretation, my guess is the Israel approval meets this target because they didn’t let shareholders know they were even considering an Israel application. If you lodge an application it’s not unanticipated but there it is. Given the weak criteria for this PC and the head scratching vagueness of it, you’d have to say this has been awarded.

Regarding all the other PCs not mentioned here, its assumed they will be met if not already.
 
Last edited:

macgyver

Well-known member
I’m going to assume the next performance rights package will include elements from this package that haven’t been achieved by September next year. PW is not going to retire unless he reaches a pre-determined amount of shares. He said ideally he wanted 2 pharmaceutical products and 4 OTCs approved by the time he retired. Prenumbra is certainly going to take longer than September next year to reach approval UNLESS he works his magic and gets through a quick Phase 3 trial and receives breakthrough designation for AIS (that’s a stretch). 4 OTCs by next September is a stretch as well given they don’t have a factory commissioned yet. Unfortunately I’m a bit cynical about this whole PR package business, I think the next perfomance rights package has been long planned either as a fall back option for unmet current PRs, or predetermined to secure more shares.
 
Last edited:

CUV Quote (Yesterday's close)

Time: 4:10PM AEDT
Price: 39.19
Volume: 69444
Top