Roughly a year after fending off a group of activist investors, AIM Immunotech is taking on another rebellion, with at least one familiar face from the previous uprising.
Three investors—Ted Kellner, Todd Deutsch and Robert Chioini—have sued the company over recent changes to AIM’s bylaw that have foiled their attempt to get a spot each on AIM's board. The three investors, who together are the largest group of stockholders in the company owning 6.5% of outstanding stock, filed the lawsuit Aug. 25.
In an accompanying letter released Monday, the activists hammered CEO Thomas Equels and two other board members over the diminishing value of the company under their leadership. AIM's stock was trading at about $80 per share when Equels was appointed in February 2016 and has since fallen below $1, though that's taking into account a reverse stock split instituted in May 2019.
“To put it another way, if a stockholder invested $1,000 in AIM on the date Equels became CEO, that stockholder would have less than $10 today, close to a total loss,” the investors wrote. They also contend that the company has failed to adequately invest in lead asset ampligen.
“While AIM has continued to tout all the different diseases ampligen can treat, the reality is that AIM has spent very little of their cash on advancing company sponsored clinical trials,” they wrote.
One of the indications that ampligen is being directed toward is long COVID and associated symptoms. The post-infection condition is estimated to have impacted millions of Americans with the federal government committing more than a billion dollars to further research the condition and potential treatments.
The latest letter from the activists and associated lawsuit come after Equels and the board unanimously invalidated the activists' notice of intent to nominate new board members, citing the new bylaws. Equels said at the time that the updated rules were meant to increase transparency in potential new board members and associations between nominees.
The sparring match is only the latest in an ongoing saga featuring Equels, AIM’s board and a team of investors looking to take over. Last year, a separate trio of Chioini, Jonathan Jorgl and Michael Rice sought to usurp existing board members. They similarly filed a lawsuit in the Delaware court looking to delay the annual shareholder vote, though an injunction was formally denied in late October 2022.
Core to AIM’s rejection of the current and previous activist campaigns is that there’s a larger group of motivated individuals fueling the activist campaign that are being shielded from the public-facing appeals. The Delaware Chancery Court appeared to agree, saying in their October ruling that a “web of individuals” was behind the three nominations last year. Ultimately, Vice Chancellor of the Court Lori Will ruled that there were too many outstanding questions to rule in Jorgl’s favor.
“The swirl of lingering factual questions prevents me from granting judgment as a matter of law in Jorgl’s favor,” Will wrote at the time. “He has simply not proven his entitlement to mandatory injunctive relief.”
Editor's note: This story was updated to reflect how a May 2019 reverse stock split impacted AIM's historical share price.