Elliott maintains pressure on Actelion
pharmafile | April 15, 2011 | News story | Sales and Marketing | Actelion, pharma mergers and acquisitions
Investment firm Elliott Advisors is maintaining its push for a new leadership team at Actelion.
The investment firm is the biggest shareholder in the Swiss pharma company, and is looking to oust Actelion’s current leadership team, saying its current R&D strategy is risky and wasteful.
The dispute is now heading for a showdown at Actelion’s AGM on 5 May.
Actelion has hit back against Elliott’s demands for changes in recent weeks, unveiling two new heavyweight board members – former GSK chief Jean-Pierre Garnier, and Robert Bertolini, ex chief financial officer of Schering-Plough. The company has also gained support for its strategy from other leading shareholders.
Elliott says the addition of Garnier and Bertolini is a “step in the right direction” but has not been entirely placated. It has reiterated its demand for six of its favoured executives to be given a place on the company’s board.
It is now demanding the current cap on the number of members permitted on Actelion’s board to be temporarily lifted to allow for its nominees to be admitted.
Elliott Investors commented: “Actelion’s runaway cost structure, which is linked to an unfocused and to date unsuccessful R&D strategy, lacks effective management oversight and is destroying value for all stakeholders. Elliott urges all shareholders to register to vote for the upcoming Annual General Meeting on 5 May to make a choice for a real change at Actelion.”
Actelion has urged its shareholders to reject Elliott’s overtures, and says it is trying to force a rapid sale of the company.
In its letter to shareholders it said: “Please do not elect a group of candidates to the Board who have been selected by a single, minority shareholder. They have little or no knowledge of the company, lack the relevant board experience with larger companies and have never been able to demonstrate a similar ability to create value for shareholders as your current Board and management have achieved over the past decade.”
Pulmonary arterial hypertension treatment Tracleer is a blockbuster treatment, earning $1.5 billion in annual revenues in 2010, and has made Actelion one of the most profitable mid-size pharma companies.
But the company is now facing the challenge of having to sustain this growth with new drugs when Traceleer’s patent expires in 2015, and has suffered numerous setbacks in its R&D pipeline.
Andrew McConaghie
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