The proxy battle at Mylan intensified Wednesday with salvos from both sides. Another proxy adviser joined forces with the rebel investors looking to remake the board. But CEO Heather Bresch shot back, blaming Mylan’s problems on external pressures, not internal missteps.
Egan-Jones Proxy Services joined ISS, Glass Lewis and a group of rebel shareholders in asserting just the opposite. The issue isn’t just Chairman Robert Coury’s $97 million pay package for 2016, though they’re incensed about that figure, too.
The restive investors and proxy firms cite additional reasons for lobbying against the current board; ISS castigated Mylan for turning away would-be acquirer Teva Pharmaceutical Industries, for instance, and government investigations over its pricing not only on the controversial EpiPen but generics as well.
Egan-Jones said Coury and five other directors “are liable to Mylan’s value destruction in the past years,” and called Coury’s compensation “egregious,” according to the Pittsburgh Post-Gazette.
“We believe that chairman and former CEO Robert J. Coury’s staying power in the board is beyond problematic in all aspects,” the firm wrote in its report to Mylan shareholders, as quoted by the Gazette.
In addition to Coury, Egan-Jones advised shareholders to vote against the three members of the board’s compensation committee, Wendy Cameron, Neil Dimick and Mark Parrish—an obvious slap at Coury’s massive 2016 compensation and the board’s history of paying top dollar to its executives. Two other directors—Robert Cindrich and Randall Vanderveen—are also on Egan-Jones list. The pension funds that kicked off the proxy fight with a letter to Coury advised votes against the same six board members.
Bresch herself made ISS’ list of directors who deserve to be ousted. But Wednesday, she publicly disputed the proxy advisers and shareholders’ complaints, saying the company has set itself up for long-term value growth and delivered in the short term, too.
"I've never been more upbeat about our business," Bresch said at the Goldman Sachs Healthcare Conference, as quoted by TheStreet. "Our infrastructure gives us an advantage.”
Analysts aren’t so sure, however. A couple of big launches they’d been counting on for 2017 look iffy these days: Mylan’s knockoffs of Advair, the GlaxoSmithKline respiratory star, and Teva’s latest Copaxone formula. The FDA rejected the Advair generic, and with no news about its 40 mg Copaxone product, industrywatchers are discounting the prospect of its near-term rollout.
Meanwhile, Mylan is on the hook for overcharging Medicaid for EpiPen, and its tentative $465 million settlement with the Justice Department may well increase after Sen. Chuck Grassley totted up more than $1 billion in EpiPen rebate losses and demanded restitution. Its authorized generic of EpiPen, launched to mollify a public angry about its now-notorious price increases, is expected to take a hefty bite out of that branded med’s sales, too.