Private Investor Group Letter to Arena's Board of Directors about Arena's Investor Relations

April 2019

Dear Arena Board Members




We are writing to call your attention to an important issue: your oversight duty. Arena’s Investor Relations and Corporate Communications needs both a Major Reset and a new IR director of the same high caliber as the IR directors of our peers (see list below).




Those of you who joined after Amit Munshi came on board should request that he provide you with a copy of the letter that an Arizona Senator and long term shareholder wrote to him early on. The background of this problem is outlined there. The matter has apparently been ignored by Mr. Munshi and, as a result, shortcomings in this area of the corporation are hurting shareholder value.


In a nutshell, Arena’s culture before Mr. Munshi was one of “damn the shareholders”; “use shareholders as ATM machines”; and “make empty promises –chronic lip-service – and be super nice to shareholders when you want to do a secondary.” Then, default back to “damn the shareholders attitude”.


Please note that up until the corporation rushed into premature secondaries and gave spectacular data at bargain prices to institutions, the majority of Arena’s shares were owned by retail shareholders, the same entities that (apparently) Amit Munshi and others implicitly insult by bragging about having moved company ownership from retail to institutions (though 10m shares are still owned by us “untouchables”). Their self-congratulatory complacence is unfounded, because Arena gave away great data—on the cheap—to institutions by rushing prematurely into highly questionable and apparently manipulated secondaries (see stock price dive before the Etrasimod secondary).


That’s water under the bridge—but the fact is that Arena’s ship, which was sunk in mud by the last regime, is still suffering from the shadow of past mismanagement in certain areas of the business.


The clearest evidence of mismanagement is the low valuation of around $2b, which is peanuts above book value. Incredibly good data from ralinepag and etrasimod did not manage to break the long term curse that the past terrible management caused.


The culture of that failed regime is still present. It was handed down to Amit’s regime in multiple ways, including key figures of that regime who are still around. It’s unheard of, that in any kind of a coup d'état, the last king’s right hand man (e.g., Steven Spector) is retained. Since Amit Munshi came on board, a number of people have asked Mr. Spector to resign or be ousted. Mr. Spector is also on record for saying, even at the time retail investors owned almost half of the company, that Arena’s attitude toward retail investors is that they should be ignored.


Please consider that Arena has had a history—indeed, a culture—of ignoring retail investors ever since the time that the majority of the company was owned by them.


That attitude seems to have continued, as Arena’s IR department is incredibly weak, lazy and ineffective. Arena never felt IR needed to be strengthened and thus put forth a below-average effort that did not produce any meaningful results. Historically, the ownership has been mostly retail, a majority of shareholders that continues to be ignored. History of this, including very recent events, illustrate this point clearly, which we have pointed out in past communications.


Another inheritance from past management: Arena’s Media Relations’ person (who works for LifeSci) comes from Russo. Russo was a key partner during Arena’s tragic years, and their performance was tragic (as judged by shareholder value). Cindy McGee, Arena’s past IR manager, whose sub-par performance consisted of sloppy mistakes in PR, etc., was gifted an unbelievable promotion by Jack Lief and swapped back-and-forth to/from Russo with another Arena VP’s daughter interned there. Russo was closely knit to the last failed regime. Now one of their key guys supposedly runs our Media Relations (along with lots of other clients they have). To date, it’s not evident if our “Media Relations” has done anything that’s positively impacted shareholder value.




Arena’s IR is still a huge disappointment today. It’s as passive, ineffective, apparently lazy and apparently somehow careless as ever. It also seems to be missing personnel of the caliber that Arena needs in order to address some of the tragedies of the past that we’re still paying for in terms of investment sentiment, image, etc.


Amit Munshi has apparently made the mistake of thinking that going to investor conferences is enough. It appears he’s taken his eyes off the ball because he doesn’t seem to know what strong IR is.


We are still seeing the very same weaknesses today that Arena’s IR has always had. IT’S TIME FOR A CHANGE, LADIES AND GENTLEMAN. This is one you never RESET because it’s the culture of Arena to ignore this area. You’ve ignored it and failed your oversight duty, and therefore the company value has suffered. This is based on the basic premise that value is a function of supply and demand.


Every marketer knows that promotion is a pillar of success. Arena’s value is set by supply/demand of shares, and nothing more. Arena does not seem to have a high caliber INTERNAL IR department which can perform PROACTIVELY to nurture relationships with the investor community in a timely, effective—and again, proactive way to stimulate demand. This is PhD or MBA level work at the very least—to be performed by someone who can walk the walk and not just talk the talk about the issues, selling the story rather than promoting the notion that the status quo is perfect, worthy of medals while the stock price is still in the pits.


Arena IR is apparently responsible for maintaining the website—at least it has said so—but recently we have found a number of inaccuracies (details available) with updates which should have been done long ago. It’s more than someone having taken his or her eye off the ball. No one’s looking at the ball! Ultimately, you and Amit Munshi are responsible, because the website of the company is not working well. A professional company’s website is proactively managed, not just changed many months after updates and wrong info continue to need correction—and then, ironically, only when it’s pointed out to Arena by us, the “untouchables.”


We have copies of the website before and after investors recommended changes. It’s not the investors’ job to cover up for IR’s laziness. Anyway, site maintenance is the least of the problem as it should be a small part of a robust, agile, active, effective, strong, strategic IR mindset, which Arena does not seem to have.



Arena just posted a job requisition for an “Investor Relations Associate/Assistant”. Arena wants to hire a college graduate with ONE year of experience to do a list of 11 items, many of which should not be expected to be adequately done by such a junior person. Yet another confirmation that a) Arena’s IR is out of touch  b) Arena doesn’t understand the importance of IR when such critical topics are put in the hands of a very junior person.

This job description, instead, should have been for a senior IR/Comms Director to take the bull by the horns. Please look at another company’s job description in APPENDIX 1.



The simplest and best solution is to hire a high caliber IR director dedicated to this role, internally.


LifeSci has tons of other clients. Putting our IR/PR/CorpComm/MediaRelations in their hands is a mistake. And it falsely relieves any internal people from doing what they should do.


We believe the problem is so serious that the only way to fix it is to get a new high-caliber, heavyweight IR/Comms director, someone who has the seniority, character, experience, motivation, insight, foresight, strategic thinking, charisma, and persuasiveness to transform this lagging area of the company. You have a duty to take this matter seriously and get it done. If you wonder whether it’s not necessary, look at the market cap. Then, look at the people who are telling you a new IR director is not necessary. These are the ones who are part of the problem.


Take a look at the profiles of the following senior level IR directors at some of our peers, and try to recruit them. Someone like Ian Clements could turn Arena’s IR world upside down in the best of ways.


·       Dr. Ian Clements of Dermira

·       McDavid Stilwell of Sangamo

·       Scott Young of Flexion


And these are just Biotechs. There are many more companies with the caliber of IR leadership that Arena has never had. Do we not deserve this? Doesn’t Arena? With all the money the company spends, isn’t it time to hire a strong new leader to address this serious weakness?


There is a reason that these people are so highly regarded. Ian was an IR director of Avanir, which was bought at 5 times its value when Ian was diligently working on the DEMAND SIDE OF SHAREHOLDER VALUE.


Why not speak to some of these people and ask them what they do? Then compare it with what happens at Arena.


If someone calls these companies, no matter what who you are, the result is a professional response, quickly. At Arena, one of us had to leave 17 voice mails before getting a call-back, and recently it took over 10 days to connect. This does not include all the courteous shareholder communications that are FLAT OUT IGNORED. This is a disease from the old days that continues to infect Arena’s shareholder value, but those around IR cannot seem to diagnose the enormity of the challenge.




Arena’s habit of disregarding us should be broken. Why? Because we have been consistently correct in our assessment of areas that need improvement. Unfortunately, it’s been a repeat case of “I told you so,” because we have been ignored. Is it not time for this persistent modus operandi to fade into the past for the benefit of everyone?


I hope that this letter reaches you through the filter of your gate keeper, Steven Spector, who is a big part of the problem. Look at company performance during the years he was there under Jack Lief. Look at shareholder value today: something you should be ashamed of. All these great assets and $2b valuation. One clear obvious problem is shortcomings in Arena’s IR approach.


Not to raise a straw man, but please be aware that the very people who are the root cause of this problem will likely discard and discredit us. After all, it’s the status quo, which means the finger will invariably point to outside factors and thereby prevent Arena management from identifying the root cause of the problem. This, it lingers and can’t be solved, thereby keeping Arena from being fairly valued.


Managing investor relationships has been the lowest priority in Arena’s culture, and people who were put in charge of it often appeared to work in filler roles. We can’t afford this. IR is not an administrative role.


We are deeply disappointed that this issue has been ignored for so long, and so we call on you to begin living up to your oversight duties by resetting the IR/CorpComms area of the business. LifeSci is not enough. Arena needs a strong inside IR Director or VP who can take aim at the appropriate receptor and give the patient a successful recovery.






Notice this is a Director-level position reporting to yet another higher level Comms/IR executive. That’s significant. This company is one of Arena’s peers and they have a very senior level IR VP and are hiring a very senior level IR Director. It makes Arena’s IR look like kindergarten! Also compare the backgrounds, e.g., this open position to Arena’s open position! We don’t believe Arena has anyone in house with the caliber of the job description below. Why are you not trying to hire someone like that, which you absolutely need? Because of a dysfunctional corporate culture around this topic where investors are looked at as a necessary evil, and ATM machines. 

If Arena had half the critical criteria in the job description below, the stock would be a LOT higher. We’re badly missing some critical talent in this area. Our current situation is same people doing the same things, expecting different results, but it does not work! Effort, being busy, and achieving results are entirely different. Arena doesn’t even have the culture to understand what it needs in this area, because it’s blinded by its own cultural habits. So please take this letter seriously – read it again. It contains a very important message. Thank you.

Title:  Director, Investor Relations 

JOB SUMMARY:  Reporting to Sangamo’s Vice President of Communications & Investor Relations, the Director of Investor Relations will develop and execute an IR strategy that will promote the business objectives of Sangamo Therapeutics as the leader in the field of gene therapy and therapeutic genome editing.


Given the breadth and complexity of Sangamo’s drug and R&D portfolio, the Director of Investor Relations must partner with communications, clinical development, R&D and business development as well as finance, to articulate a compelling and digestible message to the market in an effort to drive value creation. Sangamo’s story is highly technical and the company operates in an extremely competitive space. It is essential that the Director of Investor Relations be able to understand and explain the company’s key scientific and technical differentiators and goals in order to most effectively message the Sangamo story to financial community stakeholders.


This leader will be expected to take a proactive stance toward the execution of the IR function. S/he will need to be investor and market savvy, and in a highly visible role will work closely with members of senior management to keep the message on point regarding where the company is now and where it is going. S/he will need to possess a strategic mindset and the ability to craft the Company’s message in the light of fierce competition in order to differentiate the Company’s programs from its peers. S/he will work to maintain existing shareholders and analysts, attract new shareholders from desired investor pools, and build analyst coverage.


The Director of Investor Relations will serve as a strategic advisor to senior executives in preparing for earnings calls, investor meetings and industry conferences as well as media interviews, in partnership with communications team members. Working closely with other members of the communications team, s/he will prepare senior executives for their interaction with the investment community and other external audiences, and act as a conduit for information from the investment community to internal constituents across the company. It is critical that this individual develop an in-depth, comprehensive understanding of the company’s technology, programs, operations, clinical trial process, financial performance and strategies through regular interaction with company executives and business leaders.



·       Partner with key members of the senior management team to lead and manage the company’s participation on quarterly earnings calls, investment conference calls and in-house meetings, road shows, analyst days, one-on-one meetings and media interviews

·       Direct interaction and communication with all existing and potential shareholders; maintain and cultivate sell-side investment analyst coverage and interest from the buy side institutional investment community

·       Analyze current stockholder base and investing trends of institutional investors and conduct investor targeting; monitor top shareholder composition trends over time

·       Collaborate with colleagues throughout the company in establishing the development, and the detailed execution of the IR operating plan

·       Collaborate with communications and senior leadership in the creation of the company’s external and internal messaging and ensure all investor communications are integrated and consistent

·       Lead investor communications development, including preparing presentation decks, developing earnings releases, creating management Q&As, conference call scripts, and the business section of the Form 10K. Contributing to the drafting of other SEC documents as required e.g. Sangamo’s Proxy statement, Form 8Ks

·       Conduct analysis and research in support of the earnings call process, including the analysis of competitor operating results and industry trends. Specifically, s/he will leverage competitive intelligence to craft a concise and differentiating message that sets Sangamo apart from its peer group

·       Track the models utilized by analysts to value/evaluate the company's performance (i.e., trends, earnings per share, return on equity, etc.) and communicate this information to Senior Management and other key internal constituents

·       Present and articulate the investor point of view to the executive team, and make recommendations as necessary and appropriate

·       Present and articulate the investor point of view to the broader company through all staff emails and town hall presentations

·       Collaborate with communications to manage content and structure of the company website

·       Serve as spokesperson for the company on incoming calls from investors, at investment presentations, individual meetings and discussions as needed 

The ideal candidate will be an energetic, roll-up-the-sleeves investor relations leader or an established buy-side or sell-side equity analyst covering the biotechnology industry. S/he must have a strong scientific background, financial acumen, existing relationships within the investment community, the ability to steer business performance and make important decisions.


Exposure to highly complex scientific industries (pharmaceuticals, biotechnology, medical devices) through previous roles or academic pursuits is preferred. This individual must have the ability to create and implement a pro-active investor relations for a very technical story.


The successful candidate will have outstanding communication and interpersonal skills; and the presence and leadership ability to maintain a high level of trust, credibility and confidence with Sangamo’s leadership team and the investment community. It is critical that the successful candidate is seen as a credible individual who knows how to partner with senior executives. Experience in a high-visibility external role where judgment, tact, flexibility and resourcefulness are required. This individual has made public presentations to large audiences, and been entrusted as a spokesperson for his/her company. Beyond functional skills and experiences, this individual must have a keen intellect and unquestioned ethics.

·       Investor relations, corporate communications or equity research (buy-side or sell-side) experience within or covering biotechnology or pharmaceutical companies.

·       Strong financial acumen; facile with all of the company’s key financial statements. S/he must have an understanding of financial modeling used by investment professionals to value the organization’s performance.

·       Strong understanding of the capital markets

·       Strong reputation with Wall Street analysts and institutional investors

·       A smart, seasoned, and business-savvy investor relations leader who is comfortable and confident functioning as a trusted advisor at the most senior levels of a public company

·       An individual with strong emotional intelligence and tenacity for driving change

·       Ability to execute in ambiguous situations and take the lead without explicit instructions

·       Ability to develop, synthesize and present perspectives on key strategic issues

·       Bachelor's degree required; Ph.D. or other advanced degree in the sciences is preferred

APPENDIX 2 – HISTORY OF ARENA’S PATHETIC IR – Not much has changed under Mr. Munshi.

The following snapshot of Arena’s IR history was included as part of a 20+ page document of tips and warnings Mr. Munshi received when he took office in 2016. It was clearly stated that Arena's IR needs a serious reform. But Arena has failed to “reset” this area. It either fell through the cracks, or as explained above, was never taken seriously by scientists who drive this company and cannot grasp the importance of it. Therefore, it’s still in the “F” or “D” at best state. We cannot afford that. We need it to be “A” grade.


Arena’s IR department had and still has, a consistent record of ignoring retail investors who still comprise majority of company’s shareholders. There are numerous testimonials of investors who have stated their calls and emails were never returned. A few of many such complaints follows:

“I have called Arena several times, like most investors, and X refuses to call investors back.”

“I have sent several messages both to Jack and to X, both by email and by using the "Contact IR" form on the Arena web site. These were friendly, respectful messages, but also messages in which I asked questions or made suggestions. I never received any reply or acknowledgement. In the past, I have always received a polite response to similar messages sent to other companies. Arena is great at many things, but PR or even IR is not among them.”

“ARNA IR Dept flat out disgrace. Jack runs his investor relations group like a rented out mule.....what a efin disgrace....jack needs to start acting like he is running a real co now.....not some deer field financed lucky shop… Hey X........your real good at reading forward looking bout returning a call this decade”

“I called twice this week … First I got voicemail, left a message explaining, and waited. No call back. I called again and left another message after a few days. I also told the receptionist about my problem, and that I never get responses to my calls. She took my name and number and promised to get the message to IR. It's been a week. Still waiting.”

“Not one response to my letter from anyone.Sent via email and overnight express.What a bunch of…!!”

“I'm sure they already have outlook set up to route all inquiries to IR to junk mail to save X from having to press the delete button.

“The company does not seem to care about the general average investor. They act like they have already won the lottery and are happy with their paychecks.

“I had to call 15 to 18 times and each time say this is message number x, and threaten to fly over there to see if they’re not a sham. That’s when they finally called me back.”

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