Terren Peizer

Terren Scott Peizer dubbed the "Zelig of Wall Street"^[1][2] is currently the Chairman of his personal Los Angeles-based investment company, Acuitas Group Holdings (AGH), which in turn owns 100% of Crede Capital Group (CCG) which invests in public companies, and provides growth capital to small and medium-sized enterprises. Since its inception in June 2009, CCG has provided companies with capital commitments and funding in excess of $1.2 Billion.^[3] Besides its ownership of Crede Capital, Acuitas Group owns 72% of Catasys, Inc.,^[4] a provider of proprietary big data based analytics and predictive modeling driven behavioral health management services for health plans; and owns 100% of NeurMedix, Inc., a biotech company that develops and commercializes disease modifying small molecules to treat neuro-degenerative diseases, such as Parkinson’s disease, Alzheimer’s disease, Migraine disease, Huntington’s disease, ALS, MS, Epilepsy, Traumatic Brain Injury, and Retina disease. Peizer is Founder, Chairman of the three Acuitas companies, and is CEO of Catasys, Inc. and Crede Capital Group. Having developed a bioscience and healthcare expertise, Peizer’s Crede Capital became the largest shareholder in 22nd Century Group, Inc., a public company that is commercializing bio-plant technology to harm-reduce tobacco, creating very low nicotine and very low tar tobacco products which affect levels of addiction and cancer causing carcinogens. On October 1, 2015 New England Journal of Medicine published a landmark study on the company’s very low nicotine spectrum cigarettes.^[5] In October 2014, Peizer and 22nd Century formed a JV to commercialize the company’s products in China with China National Tobacco Company, the largest tobacco company in the world and the largest monopoly in China. China represents over 50% of the worldwide tobacco market.^[6]

Raised in Beachwood, Ohio, a suburb of Cleveland, Peizer has frequently noted the importance of his family and his Ohio upbringing in various interviews. Although he has been called "One of Wall Street’s top players",^[7] Peizer has exhibited a humble and modest lifestyle consistent with his Midwestern upbringing. It is believed that he still lives in the same condominium he first purchased in the 1980s when he moved to California.

Over the years, Peizer has been the largest beneficial stockholder and has held various senior executive positions within several technology and biotech companies.^[8] Peizer, a graduate of the Wharton School of the University of Pennsylvania has extensive background in venture capital, investing, Mergers and Acquisitions and corporate finance. He has provided his expertise and assisted companies by assembling management teams, boards of directors and scientific advisory boards, formulating business and financial strategies, and establishing investor relations. Peizer has held senior executive positions with some of the top investment banking firms such as Goldman Sachs, First Boston and Drexel Burnham Lambert.

Early career

In 1980, at just 20 years old, Peizer was recruited by Robert Rubin of Goldman Sachs from the Wharton School at the University of Pennsylvania and was believed to be the youngest associate during that era. In 1983 he was recruited by First Boston, where Peizer instantly became the most profitable high yield bond trader. He was occasionally referred to as the "Michael Milken of the East Coast", as he provided Drexel Burnham Lambert clients with an alternative to the Milken controlled High Yield Bond market. During his time at First Boston, Peizer led the first financing for a little known reverse merger company, Danaher Inc. Today Danaher is one of America's largest industrial companies. Peizer's most notable work while at First Boston came in 1984 when Peizerled the restructuring and financing of Ted Turner's insolvent Turner Broadcasting Corporation which specifically capitalized Turner Broadcasting Corp's CNN and WTBS Super Station with $185 Million; thereby saving it from bankruptcy.

In the spring of 1985,in an effort to remove the competition from the marketplace, Michael Milken recruited the young Peizer as a Senior Vice President of Drexel Burnham Lambert. Michael Milken immediately anointed Peizer as his "Protege and Lefthand Man," ^[9] as they shared clients, desk and phone before taking over all of Milken's direct client responsibilities, which made Peizer the most productive in the High Yield Bond department.

In 1990, after being laid off with 5,300 other Drexel employees in the midst of Drexel's liquidation Peizer purchased a minor league basketball team, the Omaha Racers. After his purchase, the Racers won the CBA Championship and Peizer took that opportunity to sell the team.

With "Peizer's reputation as one of Milken's sharp-elbowed traders preceding him,"^[10] Peizer then started his investment company Beachwood Financial and Wendover Financial Corporation before teaming up with Neil Cole. Peizer and Cole went on to capitalize the company Candies, which is the predecessor to today's multibillion-dollar Iconix Brand Group. During Peizer's early investment career, his function for many of these smaller and development stage companies was once described as "lender of almost last resort"^[11] but Peizer's investment savvy empowered him to get favorable deals with these companies still in their early developmental stages. From 1997 to 1999 Peizer worked with Richard B. Hollis to raise funding for Hollis-Eden Pharmaceuticals through a reverse merger; the company was developing drugs for HIV and other infectious diseases and during that time Peizer became so immersed in the scientific literature about HIV and AIDS and in the market for HIV drugs that colleagues started calling him "Dr. Peizer."^[12][13]

From 1999 through 2002 Peizer was Chairman of the Board of industry leading supercomputer designer and builder Cray, Inc., a Nasdaq Global Market company, and remains its largest beneficial stockholder.^[14] In August 2006, Peizer founded and served as Chairman of the Board of Xcorporeal,Inc., a developer of wearable artificial kidneys, where he presided over the licensing of substantially all of the companies technology to the Dialysis Industry's dominant services provider Fresenius Medical Care for a substantial up front payment and ongoing licensing royalties.^[15] Many of these companies, including Cray, Hythiam and Xcorporeal became public companies during Peizer's tenure.

Peizer's investment philosophy was taking shape during these years, which according to Peizer, was to "Invest in situations where you tip the playing field in your favor and Invest in companies with low market caps but with the ability to change the way its industry does things."^[16] Peizer applied his financial acumen and structuring expertise to minimize his investment at risk, but allow for exponential returns. This philosophy has served Peizer well, and it also points to his founding of Hythiam and Xcorporeal. Peizer has often stated his hopes that the two companies will change the addiction treatment and kidney dialysis industries, respectively.

Major Deals and Financial Transactions

Although there have been no recent attempts to estimate Peizer's wealth, the Los Angeles Times confirmed his net worth at $50 million back in 1994.^[17] While discussing the unusual step of Peizer investing his own personal net worth in some investment deals, the paper stated that he "avoids the usual accoutrements of wealth, such as big houses and expensive cars." The reporter also noted that "Peizer still lives in the condo he bought nine years ago, when he came west to sit at Milken's left hand."^[18]

However, despite his modest surroundings, Peizer has been involved in some of the top U.S. financial transactions. For instance, while at Drexel, Peizer was involved in financing some of the largest multibillion-dollar corporate takeovers of the 1980s, including Ted Turner's purchase of MGM/UA Entertainment Co.and the buyout of Beatrice foods, Storer Cable,and RJR Nabisco. Peizer and his clients also led the financings of America's most innovative and pioneering companies.^[19] This is best exemplified by the capitalizing of McCaw Cellular, the nation's first national cell phone carrier, which later became AT&T Cellular. Peizer and his clients led financings for such well known Industrialists as: Ron Perlman, John Malone, Carl Icahn, Ted Turner, Nelson Peltz and Rupert Murdoch. Peizer and his clients also financed many of the early buyouts of LBO pioneers KKR, Blackstone Group and The Carlyle Group. On the heels of the Turner/MGM/UA deal, Peizer became a magnet for entertainment deals and financings. One such deal, chronicled in the book "Hit and Run,"^[20] married Peter Gruber and John Peter's, Guber Peter's & Co. with Burt Surgarman's Barris Industries. Motivated by Barris' $100 million cash hoard, Peizer merged the two companies, which then were immediately parleyed into Sony Pictures.

Peizer surprised the financial markets when he successfully outbid Billionaire Alec Gores Technology Group in a takeover bid for Cray Research (now Cray, Inc.) by the much smaller Peizer-controlled, Tera Computer Co. Tera issued cash, stock and notes to purchase the once-struggling supercomputer company from Silicon Graphics. Over the years, Cray has developed many of the supercomputers used by the U.S. defense and intelligence communities, pharmaceutical, aerospace, oil drilling and weather and seismic industries. Within two years of Peizer's acquisition, Cray's market capitalization grew from $25 million to $1.3 Billion. His departure would have a profound effect as Peizer became vitally integral to the companies and developed an investor following. When a press release in 1999 "announced his "resignation" claiming his "objectives have been achieved," the stock dropped 16% on the day of the announcement. The stock has drifted further south to $13.50, off 47% from its 52-week high, from Peizer's resignation."

Prometa citicism

It was Peizer’s half brother's struggle with addiction that spurred him to found the Prometa treatment program in 2003 and launch Hythiam,Inc.in 2004. Peizer capitalized the company with in excess of $170 million in capital.^[21][22] Prometa combines three medications as a treatment for substance dependence, which became known as the Prometa Treatment Protocol. The medications involved are all FDA approved.^[23] Combining them for addiction treatment is different from the purposes for which they were individually approved. This is known as prescribing medications for "Off-label" use. More than 31 percent of all prescriptions prescribed by physicians are written for " off-label" use.^[24]

Peizer was successful in getting Hythiam listed on the NASDAQ Global Market Exchange, using a technique Peizer has used many times before and has become Wall Street's leader in: the reverse merger or reverse public offering (RPO). Hythiam's treatment went on to help thousands of patients end their dependence and get better. Peizer and Hythiam caught the addiction industry's eye for not waiting until there was enough scientific "proof" that Hythiam's treatment was truly effective. Subsequent studies have since validated Hythiam's and Peizer's claims.^[25] In July 2010, Hythiam and Peizer gained their first heath plan customer (Health Plan of Nevada,Inc. ), joining Ford Motor Company and the United Auto Workers in its adoption of Hythiam's Catasys Integrated Substance Dependence Treatment Solution. Peizer still envisions Hythiam's treatment methodology being deployed throughout the nation.

Hythiam gained some notice for its 2006 ad campaign featuring deceased comedian Chris Farley, with the slogan, "It wasn't all his fault" (alluding to his death from a drug overdose). The company paid $25,000 to Farley's estate in order to use his image.^[26] This advertisement campaign garnered national attention, as Peizer became a fixture on the American news circuit, regularly appearing on national news syndicates such as Fox News, CNN, Good Morning America, The Today Show, and CNBC's Squawk Box and Mad Money. Despite questions about its tastefulness and criticism from addiction treatment providers for advertising direct to consumers, Peizer defended the campaign as "creating awareness" about addiction as a medical disease, not a social and psychological personality disorder. Other critics focused on the company's emphasis on sales over research that would establish the validity of Prometa, especially since the FDA restricts marketing of drugs to the purpose for which they have been approved. Peizer justified the company's approach in a 60 Minutes episode as providing information about the treatment protocol to physicians, since Hythiam does not market the medications directly to consumers. The physicians in the practice of medicine, then prescribe the medications to the patients in need.[11]The FDA allows physicians to prescribe all FDA approved medications off label in the practice of medicine. Addiction experts marveled that Peizer was exploiting a nuance and "loophole."

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