Just a few hours after we "went to press" last week with this bleak news from Minnesota drug-delivery firm SurModics ($SRDX), there was, in the words of Thomas Lee of MedCity News, "the latest twist to this tortured saga." Hedge fund Ramius LLC, the alternative investment arm of Cowen & Co., bought a 12 percent stake in the troubled company and immediately said it was seeking three seats on the company's board in the hopes of influencing selection of a new CEO.
"Based on SurModics' recently reported fourth-quarter results, it appears that both management and the board do not have a strong grasp on the serious business issues facing the company," wrote Jeffrey C. Smith, Ramius' managing director, in a letter to SurModics' board. "Further, we believe the 36.5% decline in stock price since reporting fourth-quarter results demonstrates that shareholders have become increasingly uncomfortable with the direction of the company."
Smith went on to blame "failed growth investments, failed acquisitions, and excessive spending."
There was no comment from the company's interim CEO, but SurModics' stock did register a comment immediately after news of the proxy war broke. It rose 10 percent to $9.18.
- read the report in MedCity News
- and this one from MarketWatch
- The Minneapolis Star Tribune has a followup
- along with analysts' reaction