ISS recommends one of Sarissa's three nominees for Alkermes board

Alkermes

20/06/2023 14:24

By Svea Herbst-Bayliss
       NEW YORK, June 20 (Reuters) - Proxy advisory firm
Institutional Investor Services urged Alkermes  ALKS.O 
shareholders to elect one of three director candidates proposed
by activist hedge fund Sarissa Capital, arguing more outside
pressure on management is needed right now.
    ISS said Sarah Schlesinger, a physician with experience
serving on public company boards, should be elected to Alkermes'
11-member board at next week's annual meeting. She should
replace board member Richard Gaynor, a physician who serves as
president of BioNTech US, the report said.
    "A dissident nominee is needed on the board to add urgency
and pressure on management to change," ISS wrote in the report,
adding "shareholders' interests would be best served by adding a
direct shareholder representative to the board."
    ISS however did not back Sarissa's two other nominees,
including the hedge fund's co-founder Alex Denner.
    Alkermes said Schlesinger, who has been nominated by Denner
to sit on other boards, is not independent of the hedge fund. 
    ISS praised Alkermes, valued at $5.3 billion, for having
refreshed its board with new directors several times over the
last years and for its success in developing and bringing new
drugs to market. But it criticized the company's costs, saying
SG&A spending as a percent of sales has been higher than rivals
and has been growing.
    Sarissa, which owns 8.45% of Alkermes, has challenged the
company before. In 2021, the hedge fund and Alkermes reached an
agreement to add a new director. Last year Sarissa dropped a
board challenge, and this year it nominated three candidates.
    This year's campaign is drawing outsized attention because
of Denner's moves. Last week, he abruptly stepped down from the
Biogen  BIIB.O  board, possibly to avoid a conflict of interest
between the two companies which have a commercial relationship.
    But ISS wrote it recommended against Denner because a
conflict still exists after Biogen recommended his seat be
filled by Susan Langer, who has been identified by Biogen as
Denner's romantic partner. 

 (Reporting by Svea Herbst-Bayliss; Editing by Conor Humphries)
 ((svea.herbst@thomsonreuters.com; +617 856 4331; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))