Shares of Ironwood Pharma have settled a bit after the company announced Monday that activist investor Alex Denner of Sarissa Capital was vying for a seat on the company board of directors.
Shares of Ironwood Pharma have settled a bit after the Cambridge, Mass.-based company announced Monday that activist investor Alex Denner of Sarissa Capital was vying for a seat on the company board of directors.
Shares of Ironwood shot up about 10 percent on Monday after the company made the announcement. The stock jumped from $14.36 to hit $16.82 per share on Monday but has since settled back some to $15.90 as of 11:35 a.m.
On Monday Ironwood said it wanted to alert shareholders that Denner, who served as chairman of the board of Ariad Pharmaceuticals, was interested in a spot. The company said it would consider the input of its shareholders prior to the board making any recommendation regarding Denner.
“Members of Ironwood’s management team had one introductory meeting with Sarissa’s representatives prior to Sarissa notifying the company of their intention to nominate a director candidate. Ironwood remains open to continuing a constructive dialogue,” the company said Monday.
In its statement, Ironwood praised its current nine board members, eight of whom are independent. The company said the board has significant experience that is critical to its business.
Denner’s Sarissa gained a stake of 1.65 million shares in Ironwood last year, CNBC reported Monday. In an interview with CNBC Denner did not provide many details of what he wanted to accomplish by joining the Ironwood board. He did cheekily note that Ironwood’s unusual move of announcing Denner’s intention to seek a seat on the board cause “more value” for Ironwood shareholders in one day than “any single day in history.”
With an interest in Ironwood, there is some speculation that Denner could look to drive a potential sale of the company. Denner, a colleague of serial biotech investor Carl Icahn, has been behind a number of biotech sell-offs, CNBC reported. Most recently Denner was behind the $11.6 billion sale of Bioverativ to Sanofi. He was also behind the $5.2 billion sale of Ariad, the company where he served as chairman of the board, to Takeda last year.
While Denner remains mum on what his intentions might be for Ironwood, a position on the board would likely mean changes for the Massachusetts company. Ironwood markets Linzess, a treatment for irritable bowel syndrome. Last year Ironwood won U.S. Food and Drug Administration approval for Duzallo, a treatment for hyperuricemia associated with gout. In its approval announcement last year Ironwood said its gout franchise is expected to exceed $300 million in annual peak sales. Ironwood is also developing treatments for uncontrolled gastroesophageal reflux disease (GERD). In a Phase IIb trial, Ironwood’s candidate IW-3718 hit endpoints when used in combination with a proton pump inhibitor (PPI).
Ironwood has not yet announced the date for its annual shareholder meeting.
