Activists ready to fight for Ariad CEO's ouster: CNBC

Sarissa Capital Management founder Alex Denner

Industry-watchers knew a shake-up could be in Ariad Pharmaceuticals' ($ARIA) future when Alex Denner, founder of activist hedge fund Sarissa Capital and protégé of notorious corporate raider Carl Icahn, took a seat on the company's board of directors last year. Now, a proxy brawl looks to be around the corner.

Sarissa--Ariad's largest shareholder, with 6.9% of stock--is looking to replace the company's CEO, Harvey Berger, and may begin battling to do so in the next few weeks, an unnamed source told CNBC. Berger is up for reelection this year, and the notification date for new director proposals is Feb. 25. But Ariad may be able to avoid a public skirmish if it's willing to strike a deal with Denner's group, the news service notes.

Ariad CEO Harvey Berger

Sarissa first began piping up at the Massachusetts drugmaker in October 2013 after the FDA expressed safety concerns over cancer drug Iclusig--the company's sole approved product--that sent its stock on a downward spiral, eventually wiping more than $2.5 billion off its market cap. Along with the board seat he won back in February, Denner nabbed the right to add a second director--to be agreed on with Ariad--who hasn't yet been named.

Since striking out on his own with Sarissa in 2011, Denner--the former head of healthcare for Icahn's firm--has found his way into spats with pharma companies including Otsuka and Vivus ($VVUS), the latter of which resulted in the ouster of half the obesity drugmaker's board and its CEO.

So far at Ariad, though, Sarissa's activism has taken a relatively tame tone, RBC Capital Markets analyst Michael Yee told CNBC. "Typically activists come in and start to make noise, write an open letter, demand changes, send tweets, whatever it is; none of that has actually happened," he said.

Meanwhile, Ariad is working to win back shareholder confidence in Iclusig, which is back on the market with increased restrictions after a short-lived regulatory sidelining. It's looking to expand the leukemia treatment's label, too, studying it in stomach, lung, thyroid and blood cancers associated with certain gene mutations.

- see the CNBC story

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