Sector News

Rebel Depomed investor adds former J&J, Abbott execs to proposed board

July 27, 2016
Life sciences

Rebel Depomed investor Starboard Value wants a special meeting as soon as possible–and to get its wish, it’s taking matters into its own hands.

The hedge fund, which owns about 9.9% of the California drugmaker’s outstanding shares, has decided to control the timing of the special meeting, rejecting an offer by Depomed to let it call the meeting itself. As Depomed warned, it’ll be a long process for Starboard to go its own route, but the proxy brawler thinks it’s necessary to “prevent Depomed from any further attempts to manipulate our special meeting process and disenfranchise shareholders with needless stratagems,” its CEO, Jeffrey Smith, wrote in a letter to shareholders.

Starboard also has a couple other picks to tack onto its proposed slate of new Depomed directors, which it hopes to install when the special meeting rolls around: Robert Savage, former worldwide chairman for Johnson & Johnson’s pharma group, and James Tyree, former EVP of pharma products at Abbott Labs. But because revising its nominee lineup would create further delays in setting a meeting date, Starboard is bringing them on as advisers for now.

Along with Starboard’s other board picks–a group that currently includes the fund’s own chief exec, Smith, and former Endo skipper Peter Lankau–Savage and Tyree would create “an all-star board that would work diligently and collaboratively to protect and represent the best interests of shareholders,” Smith wrote.

And that’s not the only roster tweak Starboard wants to make if it successfully turns over the board. It’s willing to include one current Depomed director on the list to “maintain a degree of continuity amidst the required change that we believe is desperately needed at Depomed,” Smith said.

Starboard has been railing on Depomed’s corporate governance practices ever since it first took aim at the pain drug specialist. The hedge fund points to Deposed’s tactics warding off a hostile takeover by Horizon as an act of “egregiously manipulating the corporate machinery to entrench management and the board.”

And the latest request from Depomed–to let it call the special meeting after Oct. 28, when patent litigation over key drug Nucynta would be all wrapped up–didn’t do much to restore Starboard’s faith.

The way Depomed sees it, though, shareholders need all the facts surrounding Nucynta’s patent life to make an “informed voting decision,” it said last month.

By Carly Helfand

Source: Fierce Pharma

comments closed

Related News

February 25, 2024

Pharma CFOs need R&D vigilance in tough economic times

Life sciences

As inflation, high interest rates and a tight investment environment continue to create headaches, 72% of CFOs said economic volatility poses the same or greater risk to their business this year compared to 2023 in a recent survey from BDO — and there are more changes afoot.

February 25, 2024

Agilent CEO Mike McMullen to retire, succeeded by lab services head

Life sciences

McMullen, who’s also currently president of Agilent, is set to abdicate both roles on May 1, according to an announcement the company put out Wednesday afternoon. From there, McMullen will spend a few months serving as an advisor to Agilent and to his successor until his retirement becomes final on Oct. 31.

February 25, 2024

AstraZeneca completes Gracell Biotechnologies acquisition for $1.2bn

Life sciences

AstraZeneca has concluded its acquisition of China-based clinical-stage biopharmaceutical company Gracell Biotechnologies for $1.2bn. The acquisition, initially agreed in December 2023, positions Gracell as a wholly owned AstraZeneca subsidiary with operations continuing in the US and China.

How can we help you?

We're easy to reach