Thanks to recent "turmoil" at the company, Leerink Partners analyst Geoffrey Porges has called Alexion “one of the rare, once or twice per decade, activist investment situations in the biopharmaceutical industry.” And one prominent activist reportedly wants to take advantage of the opportunity.
Elliott Management has built up a stake in the rare-disease drugmaker and has pressed the company to do more to boost its share price, The New York Times reports. It’s looking for a major move from the company, which could mean serving up more aggressive financial performance guidance or weighing strategic options such as a sale.
And if Alexion doesn’t take action? Elliott could wage a proxy war to claim boardroom spots, sources told the newspaper. During the two sides’ most recent meeting in October, Elliott presented Alexion with a list of four potential candidates who could end up on Elliott’s roster if it sparks a proxy brawl, the NYT says.
“Alexion believes in active and constructive dialogue with all of our shareholders, and we value their perspectives,” Alexion said in an emailed statement.
Elliott has made plenty of headlines around the industry over the last couple of years. It recently played a central role in the sale process for Germany’s Stada, and last August it sued AbbVie for walking out on its $55 billion Shire buy.
Alexion, meanwhile, has spent the year trying to get back on track after an investigation turned up evidence that its top-level execs had pressed staffers to pad sales of lead med Soliris. The company parted ways with its CEO and CFO amid the probe, later appointing Baxalta vet Ludwig Hantson, Ph.D., to its top post.
While Hantson has made plenty of changes already, bringing on a slew of new execs and announcing a cost-cutting drive expected to trim $250 million in annual expenses by 2019, Elliott still wants to see more, the sources said. The way the fund sees things, the board could still use some revamping, specifically, by adding more biotech experts, as Hantson has filled some positions with his former colleagues from the pharma sphere.
“The company has strengthened its management team and continues to refresh its highly engaged board with directors who possess highly relevant experience,” Alexion’s statement said.