White-hot controversy has been brewing between the imaging-focused CRO/eclinical company BioClinica and one of its investors, Nicusa Capital.

According to the hedge fund Nicusa, which owns 5.6% of BioClinica’s stock, BioClinica’s leadership has not answered shareholders’ questions about its financial health and the lack of upward movement in the stock price. As a result, Paul Johnson, Nicusa’s CEO, is calling for the resignations of BioClinica’s chairman of the board David Nowicki, CEO Mark Weinstein and CFO Ted Kaminer.

“The stock has done nothing in five years,” said Johnson. “We’re trying to increase the heat.” Currently, the stock is and has been hovering around the $3.50 mark.

Weinstein is scratching his head about the whole thing. He says the company has answered any questions that have been asked, never having refused a meeting with or a call from Nicusa. And the stock’s flat movement is attributable to the less than favorable economy, as well as the company’s new push into eclinical, which is still in the ramp-up phase, he said. The company has spent $30 million on three acquisitions in the eclinical space since 2008.

Some shareholders, Weinstein said, just don’t understand that clinical research is a field of “delayed gratification, a complicated business where nothing happens fast.”

“There’s a tremendous mismatch between what shareholders want right now and what’s right for the long term for a company,” he said, adding that other BioClinica shareholders haven’t been complaining, but have called offering support on the Nicusa situation.

Weinstein said about two-thirds of the 10-year-old company’s business is focused on imaging, which constitutes a $300 million to $400 million market. But that market has been flat, since those who were ripe for adopting imaging management services have already done so. To try to grow its business, BioClinica opted to enter the eclinical space, which Weinstein said constitutes a $600 million to $1 billion market. The plan, he said, has been to make strategic acquisitions, round out eclinical offerings, and then approach small to medium-sized pharma companies, which don’t have any sound, robust, mid-market eclinical companies to turn to, he said.

But BioClinica’s attempts to diversify and capture a slice of that market have not sat well with Nicusa. Johnson wrote in a Sept. 28 letter to BioClinica’s board chairman, “We continue to believe that the Company’s core imaging business has the potential to create shareholder value and is worth substantially more than the current stock price. However, management’s eclinical acquisition strategy is flawed and is destroying shareholder value. Furthermore, management has failed to demonstrate that there are any synergies between the two businesses.”

As the controversy heats up, BioClinica has come out with a slew of favorable news. On Oct. 7, the company announced it had signed a new “multi-million dollar agreement for enterprise-wide EDC technology and data management services with a global, multi-billion dollar division of a Top 10 pharmaceutical company.” The new deal would involve supporting 200 studies annually. This is the second such deal BioClinica has inked this year.

Johnson, however, was not impressed. “There’s no information in that release; it feels like more of the same,” he said.

“What if they won that business by basically giving the service away? I don’t know if they did that, but I don’t know that they didn’t, either.” 

Last Tuesday, BioClinica launched its new Trident IVR/IWR platform, which Weinstein said is a clinical supply optimization tool that provides a cheaper, quicker way to set up, monitor and maintain randomization and supplies in clinical trials.

Regardless, Johnson is still calling for the heads of BioClinica’s leaders. He has threatened to launch a campaign to get each voted out next May when it’s time to elect board members.

“If enough people who have votes want something different, they can marshall the vote by issuing press releases, writing letters and talking to people,” said Johnson. “If they continue to stonewall us, we may go down the path of putting board members in there who would be more responsive to stockholders.”

—Suz Redfearn