Sarissa's Denner quits Biogen board as firm seeks seats at Alkermes (updated)

Alkermes

14/06/2023 24:14

(Adds details about Denner's departure from Biogen and his
replacement)
    By Svea Herbst-Bayliss
       NEW YORK, June 13 (Reuters) - Activist investor Sarissa
Capital may have cleared a stumbling block in its push for board
seats at Alkermes  ALKS.O  when one of its candidates resigned
from the board of a company that has a commercial relationship
with the drugmaker.
    The hedge fund's founder, Alex Denner, 53, one of three
Sarissa candidates running for seats on Alkermes' 11-member
board, on Monday said he would give up his board seat at biotech
company Biogen  BIIB.O .
    The move eliminates "any claim of conflict whatsoever,"
Sarissa wrote to Alkermes shareholders on Tuesday.
    But Denner's move created headlines for Biogen not only
because the long-serving director is leaving unexpectedly but
also because he nominated his replacement, Susan Langer, 32, who
is his live-in romantic partner.
    Alkermes licensed multiple sclerosis drug Vumerity to Biogen
for commercialization, and some analysts worried that it would
be problematic for Denner to potentially sit on both companies'
boards.
    Sarissa owns 8.45% of Alkermes, which is valued at $5.2
billion. This is the third time the firm has mounted a
challenge. In 2021, Sarissa and Alkermes reached an agreement to
add a new director. Last year Sarissa dropped a board challenge,
and this year it has nominated three candidates.
    The hedge fund is criticizing the performance of Alkermes'
stock, which has lost 38% over the last five years. But it has
gained 49% since a value enhancement plan establishing
profitability targets was announced in late 2020, and is up 21%
since January.
    Alkermes is urging shareholders to stick with its current
directors and not elect any Sarissa candidates. The company said
Denner, who earned advanced degrees in mechanical engineering,
does not bring relevant skills to the board, and that it already
has an investor representative on its board after settling with
hedge fund Elliott Management in 2020.
    Alkermes shareholders will vote on directors on June 29 in
what is one of the year's five biggest boardroom challenges. 
    Biogen's annual meeting, which was scheduled for Tuesday,
has been postponed to June 26. 
        A Biogen representative told STAT News that the company
knew about the relationship between Denner and Langer and that
Denner, who has served on the Biogen board since 2009 and headed
the nominating and governance committee, had nominated Langer.
  
        Biogen did not disclose the relationship when it
announced the board moves on Monday.
  
        A Biogen representative did not immediately respond to
Reuters. 
  
        Langer, whose father Bob Langer co-founded vaccine maker
Moderna  MRNA.O , began her career at Biogen, a $45 billion
pharmaceutical company, after graduating from college. Her age
and lack of public board experience have raised some concerns
about her nomination in the governance community, analysts said.
  
        Biogen's longtime chairman, Stelios Papadopoulos, will
leave this year when reaching the mandatory retirement age and
will be replaced by board member Caroline Dorsa.
  
        Biogen directors Richard Mulligan and William Jones are
also leaving and no replacements were announced for their seats.
  
        
  

 (Reporting by Svea Herbst-Bayliss; Editing by Bill Berkrot and
Mark Porter)
 ((svea.herbst@thomsonreuters.com; +617 856 4331; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))