Alkermes CEO Richard Pops wins over activists with a pledge to shake up the company and boost net income
Alkermes CEO Richard Pops is making nice with the activists at Elliott Advisors spurring the company to slim down and get in better financial shape. And he’s adding two new independent board members to keep close watch on their progress.
In a statement out Thursday morning, the company outlined a commitment to push its net income to 30% by 2024, with plans to push its top pipeline programs into the market while looking to auction off “non-core assets.”
And it all comes as restless investors press Pops for better numbers. The stock $ALKS popped 9% this morning, but shares have melted away in the past 3 years, with the market cap dwindling to less than $3 billion.
The release notes:
These initiatives also follow constructive dialogue with the company’s shareholders, including funds advised by Elliott Advisors (UK) Limited (“Elliott”), and entry into an associated cooperation agreement between Alkermes and affiliates of Elliott.
Alkermes has experienced a series of setbacks, most recently a few weeks ago when their failure to pass muster during an FDA inspection led to a CRL for their top prospect, the anti-psychotic combo drug ALKS-3831. The company shook up its commercial group last month, reducing plans for new hires as they look to the delayed launch of ‘3831. And there’s a hunt underway for new “efficiencies” that can be executed.
The activists at Elliott, last seen pressing for changes at a struggling Alexion, gave Pops a thumbs up.
Elliott is highly supportive of the initiatives announced today and commends the Board and management of Alkermes on taking these steps. From our dialogue with management we are confident that the Company is committed to creating shareholder value. Further, both David Daglio and Brian McKeon will add significant value to Alkermes’ Board and the newly formed board committee. Alkermes is significantly undervalued given its attractive assets and growth potential, and we are confident that these new initiatives will yield meaningful share price upside. We thank Richard and the rest of the team for their constructive dialogue and look forward to an ongoing engagement with the Company.