PolyNovo Limited (PNV) Earnings Call Transcript & Summary

Welcome, everybody, and what a difference a couple of months makes. So I'm looking at the room here. And those who are not insiders, there's probably 3 shareholders. And as usual, I think we usually get about 3x as many online. So I'm imagining there's a dozen people sitting there at their holiday houses in lawn or somewhere. But welcome. I hope we haven't pulled your holiday, and no apologies for the shortness of this meeting. Just wanted to get it out of the way. It's rather procedural in any case. And so we've got a quorum present, and I'll declare the general meeting open. I don't think this is, as I said, really about a couple of small changes to the constitution and the approval of the placement that we did recently. So hopefully, this won't last that long, not to stifle any questions. I don't actually intend to take questions on the general operations of the business at the moment because this has been widely publicized. It's just being about the placement and the constitution, so I don't want to disenfranchise people. As you probably all know, at the last meeting, I think we had 300-odd people plus online and another 100, 150 in the room. So I don't want those people to sort of miss out. And I think everybody will be aware that we made statement to the ASX yesterday about just updating sales, trading and so forth. So I'd like to anyways extend a warm welcome to all our shareholders with you here online or in the room. And for anybody who cannot attend today's meeting, if you -- you're not going to hear this if you can't attend, but the webcast is being recorded, and we'll release it to the ASX later this week, which usually happens the next day. Let me, first of all, introduce my fellow directors that are here. So I've got Andy Lumsden on the end. I'm not sure if this can be seen online, by the way Jan and then Robyn Elliott and Leon Hoare and Christine Emmanuel. Bruce Rathie had travel plans that started some time ago, so he's in apology for today. I'd also like to introduce our CEO, Swami Raote, who is also remote today from the U.S. I haven't got him on the screen because this is going to be a pretty short meeting, I think, but I can pull him in if I need to on the question time. And we've got our CFO and company secretary sitting beside on the left here, Jan Gielen. We've also got in attendance Bart Oude-Vrielink from MinterEllison, our company lawyers. And I see next to him, John Steven, who probably deserves a special mention. This is such a complicated company, needs 2 partners here. So just imagine what we're paying for that. But John is here because he's now a large shareholder of the company in his own right, which does show a bit more courage about what shareholders -- what our advisers are doing really compared with what lawyers normally do. There's a big mention for you, John. So thanks for coming. Notice of meeting has been dispatched to shareholders in compliance with the company's constitution and the corporations act and is also available from our ASX announcement. I take the notice of meeting being read. Shareholders and proxies are able to attend today's meeting either at the physical venue here at MinterEllison in Melbourne or online at the Computershare meeting platform. This allows shareholders and proxies and guests to attend the meeting virtually as an alternative to attending the physical venue, which is part, of course, about the third motion on today's meeting. But all virtual attendees can watch a live webcast of the meeting. In addition, shareholders and proxies, whether attending the physical venue or virtually, will have the ability to ask questions and submit votes. So how do you ask a question? Online attendees can submit questions at any time. [Operator Instructions] Please note that while you can submit questions from now on, I probably will not address these until the relevant time in the meeting. Please also note that your questions may be moderated. Or if we receive multiple questions on one topic, amalgamate them together. If we run out of time to answer questions, we'll answer them or I'll answer them in any case in due course via our e-mail. To ask a verbal question, please follow the instructions written below the broadcast. How to vote? Consistent with recent amendments to the corps law, voting today will be conducted by way of a poll on all items of business. I'll shortly open voting for all resolutions. If you haven't done so, you can vote at today's meeting in person, attending here physically by completing the blue shareholder form, which you have all got in the room. And if you are eligible to vote attending online, once voting opens, press the Vote icon, as I described before, and all resolutions will be activated with voting options. To cast your vote, simply select one of the options. There's no need to hit submit or enter as the vote is automatically recorded. You will receive a vote confirmation notice on your screen. So before we go on any further, now I'd now like to declare the voting open. So if there are any people online who want to vote, people in the room will be dealt with in a moment, you can start voting from now. I'll appoint David Squires, who I also see sitting in the room from Computershare, as a returning officer. And at the end of the meeting, he will collect the votes in his box and tally them after the meeting, and we release that to the ASX after the conclusion the meeting. Usually, it takes only hours. So you'll see that sometime this afternoon, I would imagine. You can change your vote anytime until I declare the voting closed, and I'll give you a couple of minutes warning at the end to let you know that the voting is closed. In terms of casting your vote, if you've already voted and you don't intend to change your vote, then you don't need you do anything. However, if you've already voted and you do want to change your vote regrading on the resolution is, as I said before, currently open, and you can vote at any time until I declare the voting closed. The results will not be updated on the screen. I'm going to show you what the votes look like in a moment so far but will be updated at the conclusion of the meeting and then released to the ASX. There may be some significant changes to that on Resolution 3 because I know there's quite a lot of folks that still have not been lodged yet but will be lodged now. Please note that any shareholders, proxy holders or authorized shareholder representatives may vote. Any directed proxies given to you by a shareholder will automatically be cast as directed when the poll is closed. For those attending online, the voting card is available within the navigation bar. Press the vote icon on all resolutions to be activated with voting options. To cast your vote, simply select one of the options. There's no need to hit a submit or enter button as the votes are automatically recorded. There's a lot of duplication here, and so it needs this out, I think, when we get to the next meeting. You will receive a vote confirmation notification on your screen. When voting is closed, your final voting selection will be recorded. For the people in the room, please mark the back of your voting cards as you see fit. And once poll has declared close, the Computershare staff will collect these from you. If you've got any difficulties in the meantime [indiscernible] Computershares' hotline on Melbourne number 9415-4024. Okay. Let's go on to the proxy voting results. Thank you, Jan, and I'll now move to consideration of the formal resolutions. I advised at the beginning of the meeting that we will vote on the resolution by way of a poll. Obviously, that's neat given you got virtual people and people changing their minds. And I intend as Chairman to vote any undirected proxies in favor of all the resolutions. We'll now consider the first resolution. This is a resolution to approve the placement. It's item number 1 on your notice of meeting. A voting exclusion statement applies to this and to the next item in terms of limiting the ability of directors to vote on these resolutions given this self-interest in the matter. So it's outlined in the annual general meeting. However, the directors recommend that shareholders vote in favor of this resolution. I'm going to put the resolution now, which is an ordinary resolution, and it goes and it's in your notes that for the purposes of listing rule 7.4 and for all other purposes, shareholders approve the issue of fully paid ordinary shares in the company under the placement. And if resolution 1 is passed, the conditional placement as described in the explanatory notes accompanying and forming part of the notice of meeting. Are there any questions from the audience today? So this is the placement, which was part of the $53 million raising we did 1.5 months ago, I suppose. Any questions? Jan, any questions online?

No questions, Dave.

This is great. All right. I'm going to move on to next question. I don't need you to vote if you already are voting, so I'm going to move on and assume that this is being done by way of poll. The Item 2 on the notice of meeting is the issue of shares to the directors under the conditional placement. So because all directors, I think, apart from one, took shares in the placement themselves, one who did not took up the SPP. So a voting exclusion statement applies to this as well and it's outlined in the annual general meeting, but directors recommend that shareholders vote in favor of the resolution. I'm going to put the resolution for the meeting as an ordinary resolution, as like this. It's in your notes that for the purpose of Listing Rule 10.11 and for all other purposes, shareholders approve the issue of fully paid ordinary shares in the company to directors under the conditional placement as described in the explanatory notes accompanying and forming part of the notice of meeting. Are there any questions from the audience today? No? Jan, do you have any questions online?

No questions, Dave.

Okay. Then that will go to a poll, and please vote if you haven't already voted. The last item or Item 3 on the agenda of the notice of the meeting is the amendment of the constitution. And I'll put the following resolution to the meeting as an ordinary resolution that goes like this, that the constitution of the company is modified as defined in the Notice of Meeting items 3a to 3e. And as described in the explanatory notes and accompanying and forming part of the notice of meeting is approved. Are there any questions from the audience today? No, there are none. Jan, anything online?

No questions, Dave.

Oh, we're off to the races. Thank you. All right. So voting is still open, and I'll give you a 2-minute warning. I'm about to close voting and close the meeting. So let's just talk among ourselves for a couple of minutes. You will have seen a bit of press on the company just recently. And while you're voting your blue cards, the Computershare will run around and collect those. So -- but as they're doing that, you will have seen a bit of press on the company in the last couple of days. One large article in the AUS referring to the JPMorgan conference that was held over the last few days of last week in San Francisco, where there was several thousand biotechs and investors there. Swami and I attended for really no other reason than just to get a better understanding of all our competitors, people in the space. Swami presented at the conference. And I think the things that sort of stand out for me that came out of it is relevant to us anyway, but I make some comments in the Australian article appeared, I think, on Monday about it. But first things first, we probably saw maybe a dozen to 20 companies that we thought could be relevant to us. And our presentation and those meetings, one-on-one meetings with CEOs and CFOs of various competitors and tangential companies, who is really about saying, "Look, this is who we are." And interestingly, everybody we spoke to knew who we were. Everybody we spoke to said good things about us. They'd only heard good things if they hadn't seen it with their own eyes. And they were -- everybody was very much aware that our -- the sort of outcomes of various uses of the product. So we've got a good hearing from everybody in other words, and it was important for us anyway to know that we are on people's radars. But the message we were sending to the market was really about saying, look, we're going to go. We're going ahead very quickly on getting most feet on the ground in the U.S., in Hong Kong, in Canada and elsewhere, in India, of course. And we're going to grow pretty -- as hard as we can there, and that might be going from 50, 60 people in the U.S. to 100 and so on in various markets. But we see the business as having a whole lot of silos tangential to what we're doing in burns and wounds. So those sort of tangential markets might be plastics, reconstruction surgery, podiatry, et cetera. And so part of being in the U.S. was not only to talk to people that we thought were direct competitors but -- and to also attend their presentations. But for people who had presence in other silos and really what we said to them was, "Look [indiscernible] paper. We think we want to hit some of these silos harder and quicker than what we will get to on our own. So we've got a completely open mind about whether we did some sort of distribution arrangement, some sort of other alliance, whether we bought you, you bought us, whatever, not really you bought us. But so we just basically threw a lot of burly out there to get people thinking about us in a different way, and so there was nothing concluded that came out of that. There's certainly some interest. And we're interested or not, we don't know. So that's really it. And I think I said in the press and it's true that certainly, I spoke to no investors. I didn't go there and talk to any investor. I expected none, and I only talked to corporates, and so that was really the purpose. Whereas there was a dozen other Australian companies that are really looking for money, and we didn't go for that reason. We don't think we need it, and our really focus is on how you grow the business. The second article you'll see, I think, is in the paper this morning the AUS and it really has to do with the announcement we made to the ASX yesterday. It's quite a long article about how our sales have grown in the U.S. and around the world. And you'll be aware that we released in Canada in December at their burns conference and then in Hong Kong, around the same week or thereabouts. And in both of those markets, we have early sales, so we're pretty happy about that. And it's a very good indication, I think, that those markets and the rest for that matter are going to be very important to us. We've had really good recent growth in the U.K. as well. So even though the rest of the world sales in the announcement made yesterday for the first half unaudited, remember, we're up 100-plus percent, we're coming off a pretty low base. So let's not get too excited here. But the early indications are that the surgeons have heard about it, like most of our competitors have done as well. And just putting it in front of them and making it easy equipment to use is going to be really good for us. So there's a long piece, I think, in the AUS this morning written by Jared Lynch, which it's worth a read if you haven't already read it. All right. I'm now going to close the voting, and shareholders in the room have now submitted their voting cards. And for that reason, the poll is now closed, and the results will be compiled now and hopefully be up in the market very shortly. There's no other business, so I propose to close the meeting. And I thank you, the 4 of you came here today, for coming and those people online. And I hope we can live up to your expectations for the second half of the year. So thank you.