|Ariad CEO Harvey Berger|
Let the proxy fight begin. Activist hedge fund and major Ariad Pharmaceuticals ($ARIA) shareholder Sarissa Capital has its own ideas for who it wants in the company's CEO chair--and it's not current helmsman Harvey Berger.
Sarissa is mounting a battle to oust Berger and lead independent director Wayne Wilson at the Ariad's upcoming elections, it said Thursday in a regulatory filing. There, it'll seek to replace the pair with Sarissa founding partner Richard Mulligan and Takeda vet Anna Protopapas. And it's reserving the right to make a third nomination before the Feb. 25 deadline, too.
According to the fund, it tried doing things the diplomatic way, recommending that "the board undertake measures to effect and facilitate the imminent retirement" of Berger. But that didn't work, and now it's onto plan B.
The group is "especially disturbed" by the decision to renew Berger's contract back in 2013, when FDA safety worries forced a market hiatus for Ariad's only approved drug, leukemia med Iclusig, that wreaked havoc on shares. Given the "egregious terms of that employment agreement," Sarissa also wants Ariad to disclose the talks that led to it, and it "may ultimately initiate court proceedings to seek to remove one or more directors for cause based on potential breaches of their fiduciary duties," too.
|Sarissa Capital Management founder Alex Denner|
The filing confirms suspicions that have been brewing among industry-watchers since last year, when cofounder Alex Denner--who headed up healthcare for famed proxy brawler Carl Icahn before venturing out on his own with Sarissa--took a seat on the Ariad's board. Since striking out with his own firm, Denner has made his way into spats with pharma companies including Otsuka and Vivus ($VVUS), the latter of which spurred the ouster of the obesity drugmaker's CEO and half of its directors.
Berger, though, maintains that Ariad is back on the right track. Thursday, the company reported fourth-quarter earnings and revenue numbers that both topped analyst expectations, the Boston Business Journal reports, as well as expectations to more than double Iclusig sales this year. But despite the rosy forecast, shares more or less stayed put, where they're lingering 17% below their price this time last year.
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