Actelion has issued a letter claiming that dissident shareholder Elliott Advisors is only interesting in forcing a quick sale.
In the latest chapter of the saga concerning the future direction of Europe's biggest biotech company, the Swiss firm's board of directors has been listing its achievements since going public 11 years ago. They note that the share price has quadrupled, "significantly outperforming its listed biotech peers" and with a "highly-productive drug discovery engine and a promising pipeline of compounds...we are poised to build further value".
Then, in a letter to shareholders, Actelion goes on to criticise Elliott which has been increasing its calls for the resignation of chief executive Jean-Paul Clozel and chairman Robert Cawthorn and asked the Allschwil-based group to explore a future sale. The hedge fund, which has a near-6% holding, has also proposed six candidates for a new board, headed by James Shannon, a former global head of pharma development at Novartis, ahead of the annual general meeting on May 5.
Elliott moves 'ill-timed'
Actelion management, which has consistently stated its desire to remain independent, says in the letter to shareholders that "Elliott's attempt to seize control of your company has been undertaken with one goal - to force a quick sale". The latter's "objective, therefore, is an ill-timed attempt that would surrender to a potential acquirer the future value that rightly belongs to all shareholders", the board adds. __
The Actelion board went on to say that it has "again recently reviewed the company strategy of and the value-creation potential inherent in developing its pipeline of compounds. This review was validated by world-class external advisors with deep expertise in evaluating biotech and pharmaceutical pipelines".
_It went on to claim that Elliott recently approached two members of the board, Joe Scodari and Carl Feldbaum, to ask them "to effectively endorse the board nominees it has assembled". Both directors have rejected that request and "are not prepared to lend their names or credibility to Elliott's ill-conceived plan".
The letter states that "there are considerable downside risks in Elliott's proposal to nominate six new directors with virtually no understanding of Actelion or its pipeline as the future caretakers of your company". It concludes by claiming that "this proposal reflects a fundamental misunderstanding of how to guide and further develop a world-class biopharmaceutical company that is so dependent on its 2,462 highly qualified employees".
Call for dialogue
Elliott has responded by saying that "Actelion's management does not want to offer shareholders a choice in the future direction of the company, and that is made clear in today's letter". It adds that “in our recent meetings with shareholders the overwhelming response continues to be that the current board of Actelion and its founder are not willing to have an open and comprehensive discussion about the company's strategic alternatives".
Elliott ends by stating that "in proposing this fully independent board, our sole aim is to provide real choice for de-risking the future of the company and proper governance to allow decisions to be taken for the benefit of all shareholders".