Investor Seeks Board Seats at Ariad Pharmaceuticals
Ariad Pharmaceuticals Inc.’s (NASDAQ:ARIA) second-largest shareholder is seeking at least two seats on the board, according to a Reuters report Thursday. Sarissa Capital Management LP, which is an activist fund run by Alex Denner, disclosed in October that it had taken a 6.2 stake in the company, to become its second-largest shareholder.
Ariad’s eight-member board currently has three spots slated for re-election at the company’s annual shareholder meeting in June; a precise date for that meeting has not been set. The deadline for nominating directors, however, is February 20.
Sarissa Capital Management launched last year. Its investment in Ariad marks its third publicly disclosed investment since the activist funds launch. Previously the investor has disclosed investments in Vivus Inc. and Astex Pharmaceuticals Inc.
Sarissa’s investment in Vivus resulted in the investor teaming up with First Manhattan in order to engage in a successful proxy battle at Vivus, which culminated in six nominees from the two investors and a new chief executive on the Vivus board, effectively giving the dissidents a majority in July of 2013, per Reuters.
Ariad has recently had difficulties with its only approved drug, Iclusig, a leukemia medicine, which is facing safety concerns. The company suspended sales of the drug in October after an FDA investigation found that a significant number of patients taking the drug suffered from blood clots or a narrowing of the veins.
Sales of Iclusig have since resumed as of January, but is only being utilized by a small group of patients, those who are unable to use alternate forms of treatment such as Novartis AG’s Gleevec or Bristol-Myers Squibb Co.’s Sprycel, as well as those patients who have a specific kind of genetic mutation.
After Iclusig was removed from the market in October, Ariad’s shares plummeted to a low of $2.15 after the news was first announced. Shares have recovered since then, and are currently trading at around $7.17. The biotech company is valued at around $1.3 billion, according to Reuters.