The U.S. Securities & Exchange Commission today suspended trading in shares of PixarBio (OTC:PXRB) due to possible “manipulative or deceptive activities” and due to questions about the accuracy of claims made by the company in press releases and SEC filings.
The securities watchdog temporarily halted trading in PXRB shares from 9:30 Eastern this morning through Feb. 3.
“The Commission temporarily suspended trading in the securities of PixarBio because the market for the security appears to reflect manipulative or deceptive activities and because of questions regarding the accuracy of assertions by PixarBio in press releases and its Form S-1 concerning, among other things: (1) the company’s business combinations and current shareholders; (2) the identity and qualifications of key shareholders and employees; and (3) the company’s current and prospective development efforts,” the SEC said.
PixarBio said Jan. 27 that it’s cooperating with the SEC.
“We were shocked to have the SEC suspend trading of our stock earlier this week, and we are looking forward to a successful review by the SEC,” CEO Frank Reynolds said in a Jan. 27 press release. “Whatever 3rd parties were responsible for the SEC’s actions shall not stop our future plans to replace addictive opiates in the market. Our team is confident that we will achieve U.S. FDA approval for our 14-day NeuroRelease pain treatment in late 2018. We can now add our 3-day NeuroRelease to join our 7-day pain treatment for expected approval in 2019, instead of approval in 2020.”
Medford, Mass.-based PixarBio withdrew Jan. 23 a bizarre, $100 million takeover bid for InVivo Therapeutics (NSDQ:NVIV), the regenerative medicine company co-founded by Reynolds. The company said it plans to “stay focused on our NeuroRelease pain platform and continue to drive our non-opiate non addictive [sic] morphine replacement to market with FDA approval expected between the end of 2018 and early 2019.”
“In regards to M&A, PixarBio will focus on internal development of our Injectable NeuroScaffold for spinal cord injury, at the JP Reynolds Research Center in Woburn, MA. We believe PixarBio’s injectable NeuroScaffold will lead the SCI industry in new directions for chronic spinal cord injury patients.. Onward and Upward…WE GOT THIS!! [sic],” Reynolds said in the Jan. 27 release responding to the SEC suspension.
Earlier this month, he issued a lengthy, nearly 2,700-word press release and pointed towards a -41.7% slide in the price of NVIV shares since January last year in making his case for the merger.
“We all know that NVIV current CEO Mark Perin’s [sic] took his company before NVIV as CEO into bankruptcy, and Perin [sic] has had 3 years (maybe 2 years too long) that’s enough time to succeed with a Frank Reynolds’ Neuroscaffold technology so it’s time for change. The CEO of NVIV needs to be replaced to have a shot at commercializing NVIVs true value, the NeuroScaffold for treating acute spinal cord injury invented by Frank Reynolds,” Reynolds said in prepared remarks.” PixarBio’s 2017 Deal making is NOT done. The industry needs consolidation, so let’s get busy and make US Pharma great again [sic].”
Reynolds said the $77 million offer, which he later upped to $100 million, is discounted “because NVIV has failed to develop my patents, science and know-how. NVIV appears to have lost the historically significant [spinal cord injury] primate research data, and they are now back to my 2010 IPO share price, for the second time in 3.5 years but its 2017 [sic]. It is time I take back the technology I invented to bring my neurological R&D portfolio to market by acquiring NVIV and saving the NVIV shareholder from more years of down-rounds,” said Reynolds, who also serves as PixarBio’s CFO and chief science officer.
InVivo responded to the offer, saying that PixarBio’s statement “contained a number of unfounded statements that do not warrant a response.”
“InVivo Therapeutics Corporation was not privy to the announcement made today and has not had any discussions with PixarBio Corporation nor any other party regarding this matter. Given that the nature of the offer is not credible, InVivo disclaims any obligation to make any additional public statements regarding this or similar proposed transactions from PixarBio,” the company said.
The company also wrote that it has an exclusive license to all patents and patent applications covering its neuro-spinal scaffold and that Reynolds “is not an inventor on any of these patents or patent applications.”
Reynolds shot back, asserting that he is the rightful owner of the intellectual property behind InVivo’s technology.
“The failure to conduct an exit interview [with me] resulted in lost IP to InVivo Therapeutics but that doesn’t change the facts of reality that’s recorded in 8 years of calendars, meetings minutes, and even an iPaq [sic],” Reynolds said in prepared remarks. “There are over 100 real people that know Frank Reynolds led the invention of the NeuroScaffold for Spinal cord injury so stop misleading with investors.”
InVivo parted ways with co-founder Reynolds in August 2013 and later sued him, alleging that he ran up $500,000 worth of “personal and/or exorbitant expenses.” Reynolds counter-sued in December that year, accusing the company of breach of contract, breach of the covenant of good faith and fair-dealing, and tortious interference with a contract. The case is still pending in a Massachusetts state court.
Reynolds filed a separate lawsuit against InVivo in July last year in a New Hampshire state court, alleging defamation, conspiracy and tortious interference. The U.S. District Court for the state dismissed the case with prejudice on Nov. 30 for failing to state a claim and lack of jurisdiction.
It’s unclear whether the statements cited by the SEC were made in the PixarBio press releases about its now-abandoned pursuit of InVivo.
The post UPDATE: SEC suspends trading in PixarBio shares as bizarre InVivo takeover bid ends appeared first on MassDevice.
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