February 13, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
Activist hedge fund Sarissa Capital is looking to shake up the board of oncology specialist Ariad Pharmaceuticals, Inc. , of which it is the largest shareholder, and simultaneously oust current Chief Executive Officer Harvey Berger, a scant year after gaining a seat of the company’s board.
That could be setting Sarissa up for a proxy fight for control of Ariad, if the company’s current management doesn’t acquiesce to its demands by Feb. 25, when the notification date for new director proposals is due. Right now, Berger is up for re-election the year, along with two other members of the eight-member board--but that could all change if Berger refuses to step aside, people familiar with the matter told CNBC Friday.
It’s pretty interesting there is some quote-unquote activism here, but it’s been pretty quiet,” 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.”
Sarissa is run by former Carl Icahn protege Alex Denner, and another well-known associate of both men, Richard MUlligan. Together the two have upped Sarissa’s stake in Ariad to 6.9 percent, a significant amount of ownership that could give it leverage to institute the changes it wants to see made without a bruising proxy war. Denner received his seat of Ariad’s board in February 2014 and appears to be marking his anniversary by mounting a campaign for massive change.
Boston-area biopharma Ariad Pharmaceuticals (ARIA) has long been on Sarissa’s To Do list, ever since it struggled to get American regulators to reinstate its leukemia drug Iclusig, a process which took two separate tries in 2013 before finally being approved. During that period, the share price of Ariad tanked as much as 90 percent, although it has since rebounded on the strength of a roaring biotech sector and solid sales.
Ariad now is a prime target for both change and profit. The company inked a $77.5 million deal with Japanese firm Otsuka Pharmaceutical in December, giving Otsuka the rights in 10 Asian countries to Iclusig. In addition to Japan, the rights will incorporate China, South Korea, Indonesia, Malaysia, the Philippines, Singapore, Taiwan, Thailand and Vietnam.
Iclusig has shown success in trials for treating patients with refractory chronic myeloid leukemia and Ph+ acute lymphoblastic leukemia. Iclusig is already an an approved BCR-ABL inhibitor in the United States, Europe and Australia.
Ariad said in a statement that it will continue to shepherd the drug through the Japanese regulatory process, with the hoped-for completion of the Japanese New Drug Application (NDA) for Iclusig. Otsuka will handle filing the NDA on behalf of both companies for regulatory approval in resistant and intolerant chronic myeloid leukemia (CML) and Philadelphia-chromosome positive acute lymphoblastic leukemia (Ph+ALL) in 2015.
“This agreement meets one of our key strategic objectives – establishing a strong partnership with an experienced and committed Japanese pharmaceutical company to commercialize and co-develop Iclusig in Japan and Asia,” said Berger at the time. “Otsuka is building a leading hematology and oncology business in Japan and Asia and is an outstanding partner to successfully commercializing Iclusig in these markets.”
BioSpace Temperature Poll
Who Do You Think Will Be Sanofi’s New CEO? French drugmaker Sanofi said Thursday that it will name a new chief executive in mere weeks, as it attempted to put to rest rumors that the company could not find any executives willing to take the reins after it unceremoniously ousted its previous CEO last fall. Who do you think will soon be crowned king? BioSpace wants your opinion!
