2/13/2017 6:59:39 AM
February 13, 2017
By Alex Keown, BioSpace.com Breaking News Staff
NEW YORK – Most investors in New Jersey-based Immunomedics (IMMU) were pleased when share prices shot through the roof last week after the company inked a deal worth up to $2 billion with Seattle Genetics (SGEN). However, activist investor venBio Select Advisor LLC was less-than-pleased with the deal and slammed it for its timing and terms.
This morning Behzad Aghazadeh, managing partner of venBio, condemned the deal with Seattle Genetics. He said the company has given away its “crown jewel” as “a blatant and shameful maneuver” by the board of directors due to the postponement of the company’s annual meeting. Following the announcement of the deal, the meeting was pushed back from Feb. 16 to March 3. Aghazadeh said the delay was a method for the board and management to “manipulate the outcome” of the annual meeting and “entrench themselves at the expense of stockholders’ best interests.” He added that venBio is “exploring all options to hold them accountable.”
venBio holds approximately 10 percent of Immunomedics stock and is reportedly the largest shareholder in the company. venBio has a slate of candidates it has been hoping to place on the company board of directors and said the deal with Seattle Genetics is an attempt to derail support for those board candidates, which he claimed are supported by proxy advisory firms ISS, Glass Lewis and Egan Jones.
Last week’s deal will see Seattle Genetics become responsible for initiating a Phase III trial of in patients with metastatic triple-negative breast cancer and submit the initial application or approval with the U.S. Food and Drug Administration (FDA). The agreement includes the development of additional indications for IMMU-132, including urothelial cancer (UC), small-cell lung cancer (SCLC) and non-small-cell lung cancer (NSCLC), which are currently in Phase II clinical studies, along with other solid tumor indications being studied in ongoing clinical trials.
IMMU-132, sacituzumab govitecan, is a novel antibody-drug conjugate that binds to a protein found on many cancer cells called TROP-2. By bonding with the cancer cells, IMMU-132 can then deliver a dose of a chemo agent into the cell, hopefully killing it. IMMU-132, its lead investigational antibody-drug conjugate, sacituzumab govitecan, earned a Breakthrough Therapy designation by the U.S. Food and Drug Administration in February 2016.
Not only did Aghazadeh condemn the timing of the deal with Seattle Genetics, he also said the deal is a blow to stockholders because Seattle Genetics is able to acquire 10 percent of the company at a price he said was too low, $4.90 per share. Share prices hit a high of $5.66 after the deal was announced, but have slipped down to this morning’s price of $5.12 per share.
Additionally, Aghazadeh said the deal will hamper the market value of IMMU-132 when compared to similar drugs developed by companies like Tesaro, Inc. or Clovis Oncology.
“Seattle Genetics appears to have aided and abetted the Board’s breach of its fiduciary duties to stockholders by knowingly agreeing to a subpar transaction primarily designed to entrench the Board rather than deliver stockholder value, and venBio intends to evaluate all of its legal options,” Aghazadeh said in his statement.
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