Actelion defends itself against investor aggression
pharmafile | March 9, 2011 | News story | Sales and Marketing | Actelion, Tracleer, almorexant
Swiss biotech firm Actelion is mounting a defence of its management board and strategy following an offensive by a shareholder group.
Investment firm Elliott Advisors is demanding the company replace some of its board members and consider putting itself up for sale to a major pharma company following several recent setbacks.
The company has enjoyed rapid and sustained growth thanks to its pulmonary arterial hypertension treatment Tracleer, which earned more than $1.5 billion in annual revenues in 2010. But Actelion is now facing the challenge of having to sustain this growth with new drugs when Traceleer’s patent expires in 2015.
Tracleer recently failed to show benefits in a new indication, idiopathic pulmonary fibrosis, undermining its potential for further growth.
Meanwhile a new sleeping treatment almorexant, tipped as the company’s next major product, was dropped earlier this year after it hit safety problems in phase III trials.
The aggressive manoeuvres by Elliott Advisors are highly unusual for the sector, and exceed even the strong arm tactics used by Carl Icahn against Genzyme in his attempts to wrest control of the company from its board last year.
The investment firm’s tactics include hiring a headhunter to identify possible replacements for the company’s chief executive Paul Clozel and chairman Rob Cawthorn.
It also wants to give investors the opportunity to vote on the company’s strategy.
The company has now hit back, issuing an official defence of its corporate structure and business performance.
Rob Cawthorn concluded: ‘‘Since the company’s foundation in 1997, Actelion has delivered sustained value creation through above average growth of revenues and EBIT which has been reflected in a share price that has more than quadrupled since the initial public offering in 2000.
“We believe that the company’s corporate governance has been an important component of enabling this outstanding performance. We see it as our on-going task to ensure that we have the right oversight, structure and processes in place to make continued growth possible also in the future.”
Actelion chief executive Clozel also criticised Elliott Advisors for allegedly seeking short-term profits by pushing for a sale, a claim the investment firm has rejected, saying it is a long term investor in the company.
Speculation that a major pharma company could be waiting to make an offer was inevitable, and GlaxoSmithKline is among those mentioned, particularly as it was co-developing almorexant with Actelion and continues to work with the biotch.
US biotech giant Amgen, Bristol-Myers Squibb and Lilly have also all been mooted as prospective buyers, but no company has yet made any formal moves.
Actelion’s position has been bolstered after another key shareholder spoke out. Rudolf Maag holds 4.2% of the company‘s outstanding shares, and says Actelion has “the right strategy in place to ensure sustained value creation”.
He said he was ‘convinced’ that not selling the business would be the best strategy for shareholder value over the medium to long term.
Andrew McConaghie
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