-Caligan urges Anika Therapeutics to conduct review, plans board challenge (updated)
21/02/2023 15:51
(Adds comment from company)
By Svea Herbst-Bayliss
NEW YORK, Feb 21 (Reuters) - Caligan Partners is urging
Anika Therapeutics ANIK.O to consider strategic alternatives
including a full sale, and is preparing to nominate directors to
the biotech company's board, according to a letter to the board
which was seen by Reuters.
Caligan Partners owns a roughly 4% stake in Anika and is
ratcheting up pressure to protest an underperforming stock price
and losses at the company's joint preservation segment.
"Anika may be better positioned as a private company or as
part of a larger organization," Caligan's managing partner,
David Johnson, wrote to the board.
Anika's osteoarthritis knee pain relief injection treatments
would be attractive to other companies and could be worth almost
$60 per share, Johnson wrote. That would be nearly double
Friday's closing stock price of $30.57.
On Tuesday, the company's stock price climbed nearly 6% as
the broader market declined.
For the past five months, Caligan has tried to engage with
Anika's board to discuss ways to boost the share price, which
has dropped 41% over the last five years, the letter said.
But the two sides reached an impasse and Johnson wrote that
the directors were unwilling to consider alternatives to unlock
more value for shareholders.
"Anika's board and management team are confident that the
continued successful execution of our strategy will drive
significant shareholder value," the company said in a statement.
A representative for the company was not immediately
available for comment.
"We believe that in conjunction with a review of Anika's
strategic options, fresh perspectives are needed," the letter
said. "Anika needs new directors on its Board."
Johnson did not identify his director candidates or say how
many he planned to nominate to Anika's seven-person board, where
two members will stand for re-election this year.
Anika is best known for its viscosupplement portfolio,
including Monovisc and Orthovisc, marketed by Johnson & Johnson
JNJ.N .
Anika's joint preservation segment, which it acquired in
2020, is a drag on profitability, the letter said.
Caligan also expressed concern at management's decision in
March 2022 to withdraw financial targets it had announced less
than a year earlier, causing the stock to tumble 14% the
following day.
Management has also cut its initial guidance every year in
the joint preservation segment since acquiring Arthosurface and
Parcus in 2020, further hurting its credibility with investors,
Johnson wrote.
Caligan, which specializes in healthcare investing, last
nominated a slate of directors in September 2019 at AMAG
Pharmaceuticals where it quickly settled for two board seats.
Within a year of the settlement, AMAG had replaced its chief
executive officer, rationalized operating expenses and was
bought by Covis Pharma in late 2020.
(Reporting by Svea Herbst-Bayliss
Editing by Chris Reese and Bernadette Baum)
((svea.herbst@thomsonreuters.com; +617 856 4331; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))