by Swea Herbst-Bellis
NEW YORK (Reuters) – Activist investor Sarissa Capital may have overcome a hurdle in its push for board seats at Alkerms after one of its candidates resigned from the board of a company that had business ties with the drugmaker. There is relation.
Hedge fund founder Alex Denner, one of three candidates for Sarissa running for seats on Alkerms’ 11-member board, said this week he would give up his board seat at biotech Biogen.
The move “puts an end to any claims of conflict,” Sarissa wrote to Alkermes shareholders on Tuesday morning.
Alkermes licensed Lybalvi for the treatment of bipolar disorder and multiple sclerosis drug Vumerity to Biogen for commercialization, and some analysts worried that it would be problematic for Denner to potentially sit on the boards of both companies.
Sarissa owns 8.45% of Alkerms, which is valued at $5.2 billion. This is the third time the firm is mounting a challenge. In 2021, Sarissa and Alkermes reached an agreement to add a new director. Last year Sarisa dropped the challenge to the board and this year it has nominated three candidates.
The hedge fund has been critical of the performance of Alkerms’ stock, which has fallen 38% over the past five years. But it has risen 49% since the price hike plan set a profitability target for the end of 2020, and is up 21% since January.
Alkermes is urging shareholders to remain with its current directors and not to elect any Sarissa candidate. The company said Denner, who holds an advanced degree in mechanical engineering, does not bring relevant skills to the board, and it already has an investor representative on its board after inking a deal with hedge fund Elliott Management in 2020.
Shareholders will vote on directors on June 29 in one of the five biggest boardroom challenges of the year.
(Reporting by Swea Herbst-Bellis; Editing by Bill Berkot)