Oracle Partners Announces Its Proxy Contest Against Biolase, Inc.
Submits Nominations for Four Independent Directors
GREENWICH, Conn., March 11, 2014
GREENWICH, Conn., March 11, 2014 /PRNewswire/ -- Oracle Partners, L.P.
("Oracle"), Biolase, Inc.'s ("Biolase" or the "Company") (Nasdaq: BIOL)
largest shareholder, announces its nomination of four independent directors
for election to the Biolase Board, citing management and Board entrenchment in
the face of continuing poor financial performance.
Poor Financial Performance
Larry Feinberg, the Managing Member of Oracle's general partner, said: "As the
Company's largest shareholder, we have previously expressed our concern
regarding the operating and financial performance of Biolase to management,
which has fallen on deaf ears." Mr. Feinberg added: "The financial results of
the Company for the year ended 2013 were very disappointing, with a 2%
decrease in net revenue (including an approximate 9% year-over-year decline in
the most important laser product line) and a decrease in gross margins to 38%
from 46% year-over-year. Reflecting investors' concern, the price of
Biolase's Common Stock has declined an astounding 50.8%, from a high of $5.83
on April 26, 2013 to the closing price of $2.87 on March 10, 2014."
Management and Board Entrenchment
"In addition to financial performance issues, at the apparent behest of
Federico Pignatelli, the Company's Chairman and CEO, management is now
attempting to unlawfully entrench itself and certain Board members, which
raises significant corporate governance concerns."
Mr. Feinberg continued: "On March 3, 2014, the Company announced in a press
release that Dr. Alexander K. Arrow and Dr. Sam Low had tendered their
resignations as directors of the Company, and that two new independent
directors, Mr. Jeffrey M. Nugent and Mr. Paul N. Clark, had been appointed by
the Board to fill the vacancies, resulting in a Board consisting of six
On March 6, 2014, after apparently realizing that Messrs. Clark and Nugent
were, in fact, acting with an independent voice in the best interest of all
shareholders, the Company filed a Form 8-K with the Securities and Exchange
Commission claiming the size of the Board had somehow been increased to eight
in an effort by the Chairman to secure his position by claiming that Drs.
Arrow (who as the Company's President and COO is not considered independent)
and Low were still on the Board. These actions violate Biolase's own bylaws
and Delaware law, which provide director resignations become effective
immediately. Since the vacancies created by these Board resignations were
subsequently filled by Messrs. Clark and Nugent, there were no Board vacancies
remaining on the Company's six-member Board to which Drs. Arrow and Low could
have been reappointed. What seems to be occurring is an unlawful manipulation
of the Board composition by the Chairman to stack the Board in a manner
favorable to management."
Mr. Feinberg concluded: "Given the Company's continued poor operating and
financial performance, and the grave concerns raised by these Board
developments, we have notified the Company that we intend to seek changes to
Biolase's Board at the 2014 annual meeting. Accordingly, we have nominated
four highly distinguished independent directors, three of whom already sit on
the Biolase Board. We are also considering legal action to enforce the rights
of shareholders under applicable law."
Oracle's nominees to the Biolase Board include:
Paul N. Clark, 67, has served as a member of the Board of Directors of the
Company since February 2014. Mr. Clark has been a Strategic Advisory Board
member of Genstar Capital, LLC, a middle market private equity firm focusing
on the life sciences and healthcare services industries, since August 2007
and was an Operating Partner from August 2007 to January 2013. Prior to
that, Mr. Clark was the Chief Executive Officer and President of ICOS
Corporation, a biotherapeutics company, from June 1999 to January 2007, and
the Chairman of the Board of Directors of ICOS from February 2000 to January
2007. From 1984 to 1998, Mr. Clark worked in various senior management
capacities for Abbott Laboratories, a health care products manufacturer and
retired from Abbott Laboratories as Executive Vice President and a board
Jeffrey M. Nugent, 67, has served as a member of the Board of Directors of
the Company since February 2014. Mr. Nugent is the Founder of Precision
Dermatology, Inc., a privately held dermatology therapeutics company that
was recently acquired by Valeant Pharmaceuticals International, Inc.Mr.
Nugent served as its President and CEO from December 2010 until February
2013 and Senior Advisor from February 2013 until June 2013.Prior to then
he served in a senior management capacity at various healthcare and
biomedical companies, including Ascension Orthopedics, Inc., Ventus Medical,
Inc., and Insight Pharmaceuticals LLC, a manufacturer and marketer of
leading non-prescription medications.From 1999 to 2002, Mr. Nugent served
as President, CEO and a director of Revlon, Inc., and before then held a
number of senior management positions within Johnson & Johnson.
Frederic H. Moll, 62, has served as a member of the Company's Board of
Directors since June 2013 and is a member of the Board's Compensation
Committee. Dr. Moll is currently the Chairman and Chief Executive Officer
of Auris Surgical Robotics, Inc., an ophthalmic robotics company. Dr.Moll
co-founded Hansen Medical, Inc., a medical robotics company, in September
2002, served as its Chief Executive Officer through June 2010, and served on
its board of directors through May 2012. In November 1995, Dr.Moll
co-founded Intuitive Surgical, Inc., a medical device company, and served as
its first Chief Executive Officer and later, its Vice President and Medical
Director until September 2003.
Eric Varma, M.D., 32, has been a Partner at Oracle Investment Management,
Inc., which is a fundamental research driven investment management company
that is exclusively focused on the global healthcare and bioscience
industries, since 2009. Prior to joining Oracle Investment Management, Dr.
Varma worked at Leerink Swann, the Boston Consulting Group, and the Food and
Drug Administration. Dr. Varma has served on the Board of Directors of
Vermillion, Inc., a multivariate diagnostics company focused on gynecologic
cancers and women's health, since 2013 and is the Chair of its Compensation
Complete biographical details of Oracle's nominees will be contained within
its preliminary proxy statement.
About Oracle Partners, L.P.
Oracle Partners is a fundamental-research driven investment fund that is
exclusively focused on the global healthcare and bioscience industries.
Additional Information and Where to Find It
Oracle Partners, L.P., Oracle Institutional Partners, L.P., Oracle Ten Fund
Master, L.P., Oracle Associates, LLC, Oracle Investment Management, Inc. and
Larry N. Feinberg (collectively, "Oracle"), together with Paul N. Clark,
Jeffrey M. Nugent, Frederic H. Moll and Eric Varma, are participants in the
solicitation of proxies from stockholders in connection with the 2014 Annual
Meeting of Stockholders (the "Annual Meeting") of Biolase, Inc. (the
"Company"). Oracle intends to file a proxy statement (the "2014 Proxy
Statement") with the Securities and Exchange Commission (the "SEC") in
connection with the solicitation of proxies for the Annual Meeting.
Oracle may be deemed to beneficially own 6,105,383 shares of the Company's
common stock, representing approximately 16.4% of the Company's outstanding
common stock. None of the other participants owns in excess of 1% of the
Company's common stock. Additional information regarding such participants,
including their direct or indirect interests, by security holdings or
otherwise, will be included in the 2014 Proxy Statement and other relevant
documents to be filed with the SEC in connection with the Annual Meeting.
Promptly after filing its definitive 2014 Proxy Statement with the SEC, Oracle
intends to mail the definitive 2014 Proxy Statement and an accompanying proxy
card to some or all stockholders pursuant to applicable SEC rules.
STOCKHOLDERS ARE URGED TO READ THE 2014 PROXY STATEMENT (INCLUDING ANY
AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT THE
COMPANY WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION. Stockholders may obtain, free of charge, copies
of the definitive 2014 Proxy Statement and any other documents filed by Oracle
with respect to the Company with the SEC in connection with the Annual Meeting
at the SEC's website (http://www.sec.gov) or by writing to Oracle Partners,
L.P., 200 Greenwich Avenue, Greenwich, CT 06830.
SOURCE Oracle Partners, L.P.
Contact: Oracle Partners, L.P., Aileen Wiate, Chief Financial Officer, (203)
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