In December, we reported on how a Swedish company that was about to go public dealt with a retraction of a paper in the Proceedings of the National Academy of Sciences (PNAS) that formed some of the basis of their work. The company, Wnt Research, was scheduled to go public on November 26, 2010, but after the retraction appeared on November 11, they postponed the initial public offering (IPO), and let every investor that had expressed an interest know about the retraction.
We thought the company’s moves demonstrated a remarkable transparency. Now we learn that the scientist responsible for the errors that led to the retraction has given back the shares which he or she was given when the company was founded. The company announced the news in a press release last week:
WntResearch: Stock Donation received
WntResearch AB (publ) has received a donation of 177,500 outstanding shares. The Company intends to dispose of them outside of the stock market to strengthen its financial position and thus research on the company’s applications into new cancer drugs. The divestment will take place in accordance with current regulations.
As a result of previous announcements, the reporting of incorrect results based on calculation errors, and thus the withdrawal of a previously published scientific article, (see press release 2010-11-16), the writer who took full responsibility for these mistakes, decided to give 177,500 Wnt shares to WntResearch as a gift.
CEO Bert Junno:
“That we got this gift was very positive. The company intends to dispose of the shares received outside of the market to get access to cash to further the development plan. The sale will take place ouside of the market to avoid the current trade in shares to be adversely affected. It is also worth pointing out that the sale does not entail any dilution for the shareholders.”
The company’s stock was trading at 8.60 Swedish kroner, or $1.36, per share on Friday, which means the shares are worth about $240,000. That’s an expensive retraction — but taking responsibility is worth the price, we think, and should be commended.
It’s not clear which of the paper’s authors gave back the shares. We’ve contacted the company and a few of the authors and will update with anything else we hear.
Update, 3:40 p.m. Eastern, 8/29/11: Wnt Research CEO Bert Junno responded to our query but wouldn’t say which author had given back the shares:
From WntResearch’s side everything has been communicated already and I will not disclose anything that we have not communicated with the market. I hope that you understand that we are on a regulated market with some rules around press communication.
Presumably, the “writer” who gave back the shares would be the one who declared a financial interest in the company, in the original draft of the paper? Of course, that assumes that they did the right thing and made such a declaration.
According to the paper, the first and last authors (Ford & Andersson) “have filed a patent”. That is all. Nothing about equity holdings. The MS was received at the journal in September 2008, and the company (wnt Research) was founded in 2007, so it is quite likely they had a financial conflict too, which they didn’t declare.
The company wesbite lists Andersson as holding more than 10%, and the total # of shares is 6.9 million, so presumably he has >700k shares. Ergo, the person who gave back 177k shares is not him, so it must be the first author, Ford.
yes Virgilstar,that it has to be Ford seems pretty obvious if you read the retraction and then the press release saying ”the writer who took full responsibility for these mistakes” but why does wnt research or the other authors or even Ford not just say so? why doesn’t retraction watch even name? is everyone afraid to be sued? Otherwise it seems to be creating ambiguity where none really exists.