Ahead of an eagerly-anticipated annual general meeting in a fortnight’s time, Actelion has posted a strong set of financials for the first quarter that may boost the Swiss biotech’s under-pressure management.

Net profit came in at 146.3 million Swiss francs, a rise of 10%, while revenues climbed 5% to 528.2 million francs, the majority of which came from pulmonary arterial hypertension blockbuster Tracleer (bosentan), The latter’s sales climbed 10% (all increases forthwith in local currencies) to 402.8 million francs . 

As for Actelion’s other products, sales of Ventavis (iloprost), an inhaled therapy for the treatment of PAH, rose 13% to 28.0 million francs. Turnover of Zavesca (miglustat), for patients with Gaucher disease for whom enzyme replacement therapy is not a therapeutic option, were up 8% to 16.5 million francs.

Chief executive Jean-Paul Clozel claimed that Actelion is also making good progress “in building value from our risk-balanced clinical pipeline”. The next year will see Phase III data from a landmark study with macitentan, “examining for the first time the long-term effects on both patient morbidity and mortality of an oral agent in PAH”. He added that with selexipag also in Phase III, “we believe we are well-positioned to further develop our PAH franchise.”

Mixed backing from shareholders, proxy firms

Attention will now focus even more sharply on the battle of control of the company being waged by the board and dissident stockholder, Elliott Advisors. Actelion, which has consistently expressed its desire to remain independent, noted that it has received the support of one of its major long-term shareholders, BB Biotech and IVOX, a German-based independent proxy voting service, ahead of the AGM on May 5.

The firm quotes the latter as saying proposals brought forward by Elliott, ie replacing management and considering a sale, should be “viewed critically” as its interests are "extremely questionable". The report added that there is no guarantee that Elliott's proposals "will not harm Actelion's shareholders".

However another report, from US proxy advisors Institutional Shareholder Services, is less supportive of the current leadership. It says that while Actelion, which has been “bold in the past”, has adopted  a business strategy centred on innovation, with its inherent risks”. However, ISS adds, “the question is whether this is the right strategy anymore”.

The report goes on to suggest that a sale “might be a valid strategic alternative”, with so much riding on the macitentan data. If the latter does not show clear benefit over Tracleer or indeed fails, “it raises the spectre that the company would lose its PAH franchise when Tracleer goes off-patent.

ISS says that this could force Actelion to negotiate a sale from “a position of significant weakness”. It suggests  that shareholders vote to remove chairman Robert Cawthorn and support three Elliott candidates, including ex-Novartis pharma chief James Shannon  and backs the hedge fund’s motion to remove the cap on board places.

However ISS does not support three other proposed Elliott choices nor does it want to see Mr Shannon as chairman. Indeed it backs Dr Clozel and the Actelion's board nominees Jean-Pierre Garnier and Robert Bertolini. The latter two are also supported by Elliott.

Carl Feldbaum, an Actelion board member, pointed out that ISS recognises in its report that “Elliott's board and nominees have not presented a detailed business plan” and he urged shareholders to vote for all of the management’s proposals.