Stock ac­tivists fire back at Al­ler­gan’s de­fen­sive moves, push for a com­pa­ny sale

Al­ler­gan’s at­tempt to as­suage its crit­ics — or at least shore up sup­port among in­vestors — by adding in­dus­try head­lin­er Bob Hug­in to the board and call­ing for an even­tu­al di­vi­sion of the chair­man and CEO roles at the com­pa­ny has in­spired a wicked back­lash.

David Tep­per (Carnegie Mel­lon)

Hours af­ter Al­ler­gan $AGN post­ed the move, say­ing it would sep­a­rate the two top roles dur­ing an even­tu­al lead­er­ship tran­si­tion, its ac­tivist crit­ics at Ap­paloosa LP — helmed by Car­oli­na Pan­thers own­er David Tep­per — post­ed a let­ter bash­ing Al­ler­gan’s move in no un­cer­tain terms. And they go on to say that it would be bet­ter for Al­ler­gan to go ahead and ex­plore oth­er op­tions, like a sale of the com­pa­ny.

Ex-Cel­gene CEO Hug­in was put on the board, you say? Not good enough, replies Tep­per.

(H)ad you se­ri­ous­ly in­tend­ed to take mean­ing­ful ac­tion, Bob Hug­in would have been a cred­i­ble can­di­date for Chair­man giv­en his stand­ing in the in­dus­try.

Ap­paloosa al­so goes on to prod Al­ler­gan for nu­mer­ous short­com­ings, from bil­lions in write-downs, em­bar­rass­ing le­gal ma­neu­vers (an ap­par­ent poke at the Mo­hawk patent gam­bit), big pay­days and a se­ri­ous­ly de­flat­ed stock price.

Their move to­day….

“…falls short of im­proved gov­er­nance and once again lays bare your re­luc­tance to hold man­age­ment ac­count­able for its dis­mal per­for­mance. This re­sponse, fol­low­ing three years of proxy pro­pos­als and prod­ding from large share­hold­ers such as Ap­paloosa, bears re­mark­able sim­i­lar­i­ty to last year’s abort­ed “Strate­gic Re­view” – that is, a lame at­tempt to de­flect pres­sure through to­ken mea­sures that side­step the Com­pa­ny’s de­fects and des­per­ate­ly pre­serve the man­age­r­i­al sta­tus quo.

Bob Hug­in

Tep­per adds that he in­tends to press for the sep­a­ra­tion and strate­gic re­view, call­ing the cur­rent board “sub­servient” and their res­o­lu­tion “tooth­less.”

More­over, your in­ef­fec­tu­al ef­forts sug­gest that this Board and man­age­ment team may be in­ca­pable of ex­e­cut­ing a busi­ness plan that will re­al­ize Al­ler­gan’s in­her­ent val­ue. If, in fact, the Board is un­able or un­will­ing to hold man­age­ment ac­count­able for its short­com­ings or find a suit­able re­place­ment, it is your fidu­cia­ry oblig­a­tion to ex­plore oth­er op­tions, in­clud­ing a merg­er or sale of the Com­pa­ny.

Al­ler­gan CEO Brent Saun­ders, though, isn’t go­ing for the redi­rec­tion from Tep­per, call­ing it dis­rup­tive.

Im­ple­ment­ing a lead­er­ship change in the man­ner Ap­paloosa is rec­om­mend­ing would be high­ly dis­rup­tive to the Com­pa­ny and di­min­ish Mr. Saun­ders’ abil­i­ty to con­tin­ue to ex­e­cute Al­ler­gan’s strat­e­gy to cre­ate a world-class glob­al bio­phar­ma­ceu­ti­cal busi­ness and de­vel­op the Com­pa­ny’s promis­ing pipeline.  In con­trast, the share­hold­er pro­pos­al that our Board sup­ports min­i­mizes dis­rup­tion and al­lows for the sep­a­ra­tion of the Chair and CEO po­si­tions with the next lead­er­ship change, as these res­o­lu­tions typ­i­cal­ly pro­vide.


UP­DAT­ED: Bio­gen pulls the plug on prized IPF drug from $562M+ Stromedix buy­out

One of Biogen’s attempts to branch out has flopped as the biotech scraps a mid-stage program for idiopathic pulmonary fibrosis.

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Warts for the win: Aclar­is' lead drug clears piv­otal study

Aclaris Therapeutics has found a way to get rid of the warts and all.

The company — which earlier this month decided to focus on its arsenal of kinase inhibitors — on Monday unveiled positive data from a pivotal study testing its lead experimental drug for use in common warts.

The drug, A-101, was tested in a 502-patient study called THWART-2 — patients enrolled had one to six warts before qualifying for the trial. Patients either self-administered A-101 topical solution or a vehicle twice a week over a two-month period. A higher proportion of patients on the drug (a potent hydrogen peroxide topical solution) saw their warts disappear at day 60, versus the vehicle (p<0.0001) — meeting the main goal of the study.  Each secondary endpoint also emerged in favor of A-101, the company said.

Deborah Dunsire. Lundbeck

UP­DAT­ED: Deb­o­rah Dun­sire is pay­ing $2B for a chance to leap di­rect­ly in­to a block­buster show­down with a few of the world's biggest phar­ma gi­ants

A year after taking the reins as CEO of Lundbeck, Deborah Dunsire is making a bold bid to beef up the Danish biotech’s portfolio of drugs in what will likely be a direct leap into an intense rivalry with a group of giants now carving up a growing market for new migraine drugs.

Bright and early European time Monday morning the company announced that it will pay up to about $2 billion to buy Alder, a little biotech that is far along the path in developing a quarterly IV formulation of a CGRP drug aimed at cutting back the number of crippling migraines patients experience each month. In a followup call, Dunsire also noted that the company will likely need 200 to 250 reps for this marketing task on both sides of the Atlantic. And analysts were quick to note that the dealmaking at Lundbeck isn’t done, with another $2 billion to $3 billion available for more deals to beef up the pipeline.

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Tower Bridge in London [Shutterstock]

#UK­BIO19: Join GSK’s Hal Bar­ron and a group of top biotech ex­ecs for our 2nd an­nu­al biotech sum­mit in Lon­don

Over the past 10 years I’ve made a point of getting to know the Golden Triangle and the special role the UK biopharma industry plays there in drug development. The concentration of world class research institutes, some of the most accomplished scientists I’ve ever seen at work and a rising tide of global investment cash leaves an impression that there’s much, much more to come as biotech hubs are birthed and nurtured.

Charles Nichols, LSU School of Medicine

Could psy­che­delics tack­le the obe­si­ty cri­sis? A long­time re­searcher in the field says his lat­est mouse study sug­gests po­ten­tial

Psychedelics have experienced a renaissance in recent years amid a torrent of preclinical and clinical research suggesting it might provide a path to treat mood disorders conventional remedies have only scraped at. Now a preclinical trial from a young biotech suggests at least one psychedelic compound has effects beyond the mind, and — if you believe the still very, very early hype — could provide the first single remedy for some of the main complications of obesity.

It’s fi­nal­ly over: Bio­gen, Ei­sai scrap big Alzheimer’s PhI­I­Is af­ter a pre­dictable BACE cat­a­stro­phe rais­es safe­ty fears

Months after analysts and investors called on Biogen and Eisai to scrap their BACE drug for Alzheimer’s and move on in the wake of a string of late-stage failures and rising safety fears, the partners have called it quits. And they said they were dropping the drug — elenbecestat — after the independent monitoring board raised concerns about…safety.

We don’t know exactly what researchers found in this latest catastrophe, but the companies noted in their release that investigators had determined that the drug was flunking the risk/benefit analysis.

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Ac­celeron drops a de­vel­op­ment pro­gram as #2 drug fails to spark func­tion­al ben­e­fits in pa­tients with a rare neu­ro­mus­cu­lar ail­ment

Acceleron is scrapping a muscular dystrophy development program underway for its number 2 drug in the pipeline after pouring over some failed mid-stage secondary data.

Gone is the ACE-083 project in patients with facioscapulohumeral muscular dystrophy. Their drug hit the primary endpoint on building muscle but flopped on key secondaries for functional improvements in patients, which execs felt was vital to the drug’s success.

Scott Gottlieb, AP Images

Scott Got­tlieb has a new board po­si­tion to add to the re­sume — and this one is fo­cused on a fa­vorite sub­ject

Scott Gottlieb has another position to add to his lengthy roster of boards and advisory roles in the wake of his departure from the helm of the FDA.

He’ll be joining the advisory board of FasterCures, a think tank which former junk bond king Michael Milken set up to help drive more drugs to the market, looking to accelerate drug R&D. That’s a subject close to the heart of Gottlieb, who blazed a trail at the FDA focused on hustling up the process. That helped endear him to the industry, making him one of the most popular commissioners in FDA history.

It’s also likely to be a much less controversial post than his board position at Pfizer, which stirred criticism from Democratic presidential candidate Elizabeth Warren.

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Karyopharm lines up $150 mil­lion cash in­jec­tion to back con­tro­ver­sial drug launch

Karyopharm has entered into a royalty agreement worth up to $150 million to back the launch of their multiple myeloma drug — recently approved by the FDA over the objections of a majority of the agency’s outside experts.

The deal with HealthCare Royalty Partners, worth $75 million now and $75 million once certain regulatory and commercial milestones have been reached, will fund the commercialization of Karyopharm’s oral SINE compound Xpovio (selinexor) for patients with multiple myeloma who have already had at least four prior therapies. The money will help Karyopharm as it markets its newly approved drug and pushes through clinical trials testing the drug on refractory multiple myeloma patients with one to three therapies and patients with treatment-resistant diffuse large B-cell lymphoma. It will give Karyopharm a cushion through mid-2021.