Genflow Biosciences: AGM and partnership strategy

Genflow Biosciences Ltd (LSE:GENF, OTCQB:GENFF, FRA:WQ5) CEO Dr Eric Leire talked with Proactive about the company’s latest RNS regarding its upcoming AGM and the strategic rationale behind authorising the potential issuance of shares ahead of clinical partnership discussions.

Leire addressed potential shareholder concerns, acknowledging that announcements involving share issuance can sometimes be interpreted as a fundraising signal. However, he clarified that the RNS is not about launching a capital raise, but about strengthening the company’s position in ongoing and future negotiations with major pharmaceutical partners.

He explained that in biotech, financial flexibility translates directly into leverage. “In biotech, cash is not just money, it’s negotiating power,” Leire said. As a public company, Genflow Biosciences Ltd’s financial position is visible to potential partners, and Leire emphasised the importance of maintaining the ability to walk away from unfavourable terms.

He added that the company is not committing to using the full 30% share issuance authority and stressed that the underlying science remains unchanged. “Our science has not changed. What we’re doing is just making sure that we capture the full value of our science,” he noted.

While acknowledging that markets dislike uncertainty, Leire stated that uncertainty is temporary, whereas signing a bad deal would have lasting consequences. He said the company is focused on optimising for the best long-term outcome and ensuring it is not forced into a suboptimal agreement.

Proactive: Eric very good to speak with you. You issued an RNS this morning flagging your upcoming AGM, also talking about partner discussions. Can you tell us more about that?

Dr Eric Leire: We totally understand that shareholders can be frustrated by the RNS we issued today. We do not take it lightly. This RNS is about the AGM, but it can be perceived as a potential capital raise. Typically, we know that stock price goes down on a capital raise announcement, then recovers when the strategic benefit becomes clear. We’ve seen that pattern repeatedly. So if we knew that the share price could go down, why did we make this RNS? The answer is simple. This is not an RNS about potential fundraising. This is about negotiating power. What we’re doing is proactively strengthening our hand before entering clinical partnership discussions.

Proactive: You say it’s about partnership discussions, but do you think the RNS could still be perceived as an announcement about a fundraising?

Dr Eric Leire: Yes. First, technically, this RNS is not about fundraising. There’s no terms. It’s about authorising the issuance of shares — 30% — but this is only an authorisation. We are not committing to using the full authorisation. Let’s come back to the objective of the RNS. In biotech cash is not just money, it’s negotiating power. We want to be sure that Big Pharma will not take advantage of us when negotiating deals. As a public company, our financial situation is visible to every potential partner. We do not want to be in a position where we have no other choice than accepting their terms. Our ability to say no to a non-optimal deal is the most valuable negotiating position. Negotiating deals will create more value than avoiding near-term dilution. If I bring it back to the fundamentals, our science has not changed. What we’re doing is just making sure that we capture the full value of our science.

Proactive: It does introduce an element of uncertainty, and markets don’t like that. How do you address that?

Dr Eric Leire: I understand that the market hates uncertainty, but uncertainty is temporary. Signing a bad deal will be permanent. I’m convinced that the ability to say no is worth every penny we could raise. We are optimising for the best long-term outcome. At this point, I cannot guarantee partnership terms or timing, but I can guarantee that we will not be forced into a suboptimal deal. When the partnership is announced, shareholders will understand why this mattered.

Proactive: Eric, I hope you’ll continue to keep us updated with progress on that. Thank you very much for taking the time today.