New directors share ownership

The new board’s stake in IPD is minimal at this stage. I’ve been monitoring share purchases to potentially indicate their confidence in their new roles, the restructured board and company’s prospects. 

So how does it look? 

Grant McGregor                              Value  205K   held prior to spill

Andrew Grant                                  0

Janelle Delany                                 0

Christine Emmanuel-Donnelly         10.5k purchased on market 3/11/23 

I couldn’t find updated details of the boards remuneration, perhaps they are receiving shares as a part of that, as per the old structure?  

On the investor call 31/10, post the board spill, board alignment was asked about.  I had scribbled down, my notes/words: Buy on market, currently black out period  Given Christine E-D’s change of directors’ interest notice 3/11, I assume a window was open for share purchases.

The board presentation at the Nov AGM may reveal something, no AGM date at this point

Watching for:

• Director remuneration details
• Board presentation AGM
• On market share purchases, directors

Yesterdays, IPD released its 4C, I listened into the investor call.

Financials:

At this stage financials seem ok.  Growth in recurring revenue although hardware sales were down qoq, nothing jumped out at me here, some lumpiness can be expected with customer wins and onboarding. I didn’t glean anything new outside what was in the ASX presentation 

Management:

My observations are on the management team, it was a phone call so no visual cues.

Rick CEO sounded tired/weary which is expected giving the board spill which started several months ago. He said all the right things, support for new board etc, but what choice do you have.

Rick admitted that the spill was a distraction taking time away for the business for himself and the CFO and now they are back to managing the business.

On the positive they did not dodge any questions, patiently answered everyone asked, even if they were repetitive in nature and ran over time to do so.

There was no board input, the new board has been meeting in the US and reviewing strategy, operations etc. The board will be presenting their plan at the AGM next month, to me this is a key issue to watch in the short term.

Position:

I have held for some time, but sold half when this broke out, so at this stage I can afford to wait and see what happens. I have no doubt the product has a clear place in oncology clinics and processes, what I have doubts about is whether IPD have the plan and structure to successfully commercialise this. I won’t be increasing my position until I see evidence there is a clear plan of attack and the business fundamentals start to reflect that.  

Does anyone have any thoughts on the announcements from IPD?

31/7/23          ASX announcement by IPD

“On behalf of Acadia Park Pty Ltd (AP), regarding the intention of AP, with the support of a small handful of private investors, to move resolutions for the removal of four directors of the Company, being Mr Donald Williams, Mr Amit Patel, Mr David Anderson and Mr Daniel Sharp.”

1/8/2023        ASX announcement by Acadia Park

Significant shareholder announcement 8%, (I count around 20 shareholders to get to the 8% holding)

So, they are disgruntled with the board, but why? Past board/company performance, inappropriate cap raise, undisclosed take-over offer, I have no idea. I do know that boardroom conflicts make me nervous

Any comments?

Since there are verified trials for the IPD test and support from NCCN guidelines for BIS monitoring and the SOZO system, the use case seems clear to me. So what are the potential risks associated with it?

1. Implementation

IPD needs to execute effectively to integrate into clinical flow systems. This requires adoption and change to become part of the patient, clinician and hospital/clinic system. To achieve this, they need to:

-      prove the ROI on hardware and tests,

-      integrate into existing patient flow systems,

-      manufacture enough units to meet demand,

-      change perceptions so monitoring for lymphedema starts at the diagnosis/treatment plan stage rather than at the end rehab phase,

-      raise awareness among clinicians and patients that early and ongoing monitoring and intervention can prevent the disease from developing. The test's sensitivity can detect early-stage Lymphedema before physical symptoms appear.

Secondly, implementation is hard.

https://youtu.be/C04AxtJoDXU

Webinar goes into this in more detail about the IPD implementation process. (above screen grabs from webinar)

2.        Competition

Inevitably there will be competition in the space, with the NCCN guidelines covering all types of cancer, it is a big market to chase. IPD suggest there are similar tests available, but their test is more accurate, I have no idea how close a competing test is.  Ensuring all the stakeholders understand the different testing parameters will be key for IPD as insurer’s adopt the guidelines.

3.        Management

New management needs to prove they have the right structure of staff, sales, training, implementation, etc in place to capitalise on the opportunity. As noted by Rick V in the latest quarterly call “the market is ours to win or lose”, yep.

4.        Capital management

Cash on hand is high since the latest CR, using this wisely will be a key criteria to watch.

Held