PharmaCielo Ltd. - CEO, David Attard
CEO, David Attard
Source: PharmaCielo
  • PharmaCielo (TSXV:PCLO) has issued a lengthy response to a “short-seller” report by Hindenburg Research, after an independent review
  • The report contained a variety of allegations relating to a wide range of operations, including a co-founder of PharmaCielo
  • Doug Bache, PharmaCielo’s Audit Committee Chair, acted as the lead independent director of the review
  • In conjunction with the announcement, the company also released a video and letter from the CEO, David Attard
  • PharmaCielo (PCLO) is currently up 2.6 per cent to C$0.79, with a market cap of $66.09 million

PharmaCielo (TSXV:PCLO) has issued a lengthy response to a “short-seller” report by Hindenburg Research, after an independent review.

On March 2 this year, Hindenburg published the report, which listed a host of allegations relating to PharmaCielo’s operations.

PharmCielo promptly issued a press release the following day, confirming its awareness of the report.

It was firm in its statement that the report was a “malicious attempt to manipulate PharmaCielo’s common shares by spreading false, distorted, and misleading statements about the company.”

PharmaCielo CEO, David Attard, cautioned shareholders at the time regarding the “blatant misrepresentations.”

“This report was written with the express intention of manipulating market opinion, to reward a select group of short-sellers at the expense of all honest market participants,” he said.

In the same announcement, PharmaCielo confirmed that outside advisors, including legal counsel, were reviewing the report. The results of that review were published today.

One of the most damning accusations was the alleged stock manipulation by co-founder and ex-CEO, Anthony Wile.

PharmaCielo did not deny Wile’s previous troubles with the SEC in 2010. However, it was also adamant that his conduct with the company did not violate the terms of his settlement.

PharmaCielo added that Wile’s background and history had been openly and publicly disclosed, and that there was no evidence of an insider enrichment scheme.

Hindenburg also alleged that the company’s co-founders, Wile and business partner Federico Cock-Correa, pursued undisclosed related-party transactions.

Specifically, the report claimed that a distribution deal with Xphyto Therapeutics appeared to be “little more than a shell game.” It went on to say that PharmaCielo was supplying Xphyto with cash, which it then used to purchase products from PharmaCielo.

The company’s independent review explained that there is a reasonable rationale for the agreement between PharmaCielo and XPhyto.

Hindenburg Research’s full report contained roughly 11 key allegations, ranging from stock fraud and misrepresentation to land and property acquisitions.

Attard said in today’s announcement that the independent report and its findings speaks volumes, and he encouraged all stakeholders to read its conclusions.

“This is a classic ‘short and distort’ campaign waged against PharmaCielo with false claims to manipulate its stock price. 

“If anything, it is the short-seller who was trying to run a self-enrichment scheme at the expense of honest shareholders, but instead clearly demonstrated their analytical shortcomings,” he added.

PharmaCielo (PCLO) is currently up 2.6 per cent to C$0.79 at 3:36pm EST.

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