Activists slam Immunomedics’ $2B deal with Seattle Genetics in the middle of a proxy war

Behzad Aghazadeh, venBio

Immunomedics’ $2 billion deal with Seattle Genetics late last week provoked a fresh assault from a group of activist investors out to overthrow management at the biotech.

VenBio Advisors gathered a 9.9% stake in Immunomedics $IMMU and charged into a battle with the company’s board and top execs in a nasty squabble that’s sparked accusations of lying and cheating as the activists angled to get their 4 candidates elected to the Immunomedics board.

Then on Friday Seattle Genetics unveiled their deal to acquire control of Immunomedics’ solid tumor drug IMMU-132 with $300 million in near-term cash and $1.7 billion in milestones. Immunomedics then said it was postponing its annual meeting so that its investors could consider the consequences of the deal.

In little time venBio hit back at the “seemingly poor deal,” criticizing a short go-shop period to see if anyone would like to bid higher. Seattle Genetics also got a sweetheart deal to buy the company’s stock at a big discount, venBio claimed, and investors are likely to get hit by a decline in share price after execs gave away the company’s crown jewel.

There was no immediate response from Immunomedics.

Dr. Behzad Aghazadeh, Managing Partner and portfolio manager at venBio, said:

“Immunomedics’ announcement of a deal with Seattle Genetics is a blatant and shameful maneuver by the current Board and management to manipulate the outcome of the upcoming Annual Meeting and entrench themselves at the expense of stockholders’ best interests, and venBio is exploring all options to hold them accountable. The current Board’s attempt to claim that the timing of this partnership – four business days before the Annual Meeting – is coincidental and was motivated purely by a desire to identify the best deal is preposterous and clearly disingenuous, in our view, especially when they have agreed to an aberrantly short six business day go-shop period.”

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