Sector News

Activist fund Sarissa wants to oust Ariad CEO

February 13, 2015
Life sciences
Activist hedge fund Sarissa Capital, which won a seat on Ariad Pharmaceuticals’ board last year, is seeking to replace the company’s chief executive and may mount a proxy fight in the next few weeks, according to a person familiar with the hedge fund’s plans.
 
Sarissa is the largest shareholder of Ariad, with 6.9 percent of the stock, or about 12.9 million shares, according to FactSet. The hedge fund is run by Alex Denner, formerly Carl Icahn’s head of biotech investing, and Richard Mulligan, a Harvard geneticist who worked with Denner and Icahn on several investments.
 
Sarissa has been agitating at Ariad since October 2013, when the drugmaker’s stock plummeted over safety concerns with its cancer drug, Iclusig. Denner won a seat on the board in February 2014 and the right to add a second director to be agreed on with the company. Ariad and Sarissa haven’t named that second board member.
 
“It’s pretty interesting there is some quote-unquote activism here, but it’s been pretty quiet,” RBC Capital Markets analyst Michael Yee said in a telephone interview. “Typically activists come in and start to make noise, write an open letter, demand changes, send tweets, whatever it is; none of that has actually happened.”
 
That may be about to change. Sarissa is said to be seeking to replace Chief Executive Officer Harvey Berger, the company’s founder; Berger is up for re-election this year, along with two other members of the eight-member board. The notification date for new director proposals is Feb. 25, according to Ariad’s 2014 proxy filing. The hedge fund may not seek a proxy fight in the coming weeks if an agreement is reached with the company.
 
Maria Cantor, a spokeswoman for Ariad, declined to comment.
 
The company is working to regain investor confidence in the prospects of Iclusig after it was pulled from the U.S. market at the end of 2013 over safety concerns. It returned two months later, with more restrictions on its use. Ariad shares have fallen about 17 percent in the last 12 months, compared with an increase of 25 percent for the Nasdaq Biotechnology Index.
 
“Commercially, we’ve had a really good year; we’ve really made progress in the U.S. as well as Europe,” Berger said in an interview with CNBC at the J.P. Morgan Health Care Conference in January.
 
In response to a question about Denner and the potential for a proxy fight, he said: “I have no idea at this point, but certainly he’s been a productive and cooperative member of the board. He’s been involved in things and is part of a very involved board of directors.”
 
By Meg Tirrell
 
Source: CNBC
 

comments closed

Related News

May 15, 2022

Novo Nordisk and Flagship Pioneering announce a strategic collaboration to create a portfolio of transformational medicines

Life sciences

The companies will explore opportunities to apply Flagship’s innovative bioplatforms – an ecosystem that currently comprises 41 companies – to scientific challenges in disease areas within cardiometabolic and rare diseases and initiate research programmes based on these.

May 15, 2022

BD, Babson set sights on bringing simple blood collection into the home

Life sciences

BD is expanding its long-running partnership with the blood collection company Babson Diagnostics. The two companies have been working together since 2019 on a device that can gather small volumes of blood from the capillaries in the fingertip without requiring any specialized training, and beginning with a focus on supporting primary care in retail settings.

May 15, 2022

CSL’s $11.7B Vifor buy, 2021’s biggest biopharma M&A deal, hits antitrust delay

Life sciences

Wednesday, Australian biotech CSL said (PDF) the regulatory review of its $11.7 billion acquisition of Switzerland’s Vifor Pharma will take “a few more months,” suggesting it won’t be able to close the transaction by June 2022 as previously expected.