| April 19
April 19 Activist hedge fund Sarissa Capital
Management LP said on Wednesday that U.S. respiratory drug
company Innoviva Inc reneged on a proxy settlement deal
that was struck earlier in the day.
Sarissa, run by former Carl Icahn protege Alex Denner, said
in a statement that Innoviva had accepted an offer to settle the
proxy contest ahead of the shareholder vote scheduled for
Thursday by adding two Sarissa-nominated directors to the board.
After Sarissa signed and sent back the settlement contract
Wednesday afternoon, Innoviva continued to lobby shareholders to
vote for its own nominees without disclosing its settlement with
the activist, the hedge fund said. Then Innoviva said it would
no longer agree to a deal.
Innoviva declined to comment.
Based on shareholder votes that had come in as of late
Wednesday, Innoviva believed it had enough support to defeat
Sarissa's director nominees, according to people familiar with
the matter who asked not to be identified discussing internal
Innoviva and Sarissa declined to comment on the current
Sarissa, which owns a 2.72 percent stake in Innoviva, had
accused the company of spending too much money on executive pay
and board compensation, given that its only function is to
manage the drug royalties it receives from GlaxoSmithKline Plc
Earlier this month, Innoviva announced plans to undertake a
review of cost and executive compensation structures that it
said could result in "meaningful savings in our core operating
costs that will benefit our financial performance."
Innoviva, which had 14 employees as of Dec. 31, according to
its annual report, has a market capitalization of $1.5 billion.
GlaxoSmithKline, which has a 29.3 percent stake in Innoviva, had
opposed Sarissa's board nominees.
Innoviva and GlaxoSmithKline submitted an application in
November to market their new three-in-one inhaled lung drug for
U.S. approval. Innoviva and GlaxoSmithKline have other
respiratory medicines in the market.
Sarissa has a track record of shaking up boards in the
pharmaceutical industry. Its past targets have included Biogen
Inc and Ariad Pharmaceuticals Inc, a manufacturer of
cancer drugs which agreed to sell itself to Japanese drugmaker
Takeda Pharmaceutical Co. Ltd in January for $5.2
(Reporting by Greg Roumeliotis and Michael Flaherty in New
York; Editing by Leslie Adler)