Actelion ‘Confident’ Current Board Members Will Be Re-Elected
Actelion Ltd. (ATLN), under pressure from its largest shareholder to consider options including a sale, expects that investors will re-elect the Swiss biotechnology company’s board members, Vice Chairman Joe Scodari said.
While it’s “certainly a possibility” that some nominees put forward by Elliott Advisors (UK) Ltd. may be elected at the May 5 annual meeting, “at the moment we don’t think that is a likely outcome,” Scodari said today in a telephone interview. Elliott owns a stake of more than 6 percent.
Both Elliott, part of a $17 billion hedge fund founded by Paul Singer, and Allschwil-based Actelion have proposed board changes as they seek to win over shareholders. Elliott has called for Actelion Chief Executive Officer Jean-Paul Clozel and Chairman Robert Cawthorn to leave the board. Actelion’s efforts to develop new drugs have faltered over the past year with a series of clinical-trial setbacks.
“The current board feels pretty confident in the outcome, that it will be in favor of the Actelion board and the recommendations made by the Actelion board,” Scodari said. Still, it’s “reasonably likely” shareholders will approve an Elliott resolution to limit the terms of board members to one year, he said.
Actelion is proposing an expansion of the board, supporting Jean-Pierre Garnier, a former chief executive officer of GlaxoSmithKline Plc (GSK), and Robert Bertolini, a former chief financial officer at Schering-Plough Corp., as candidates in addition to the nine current members. If elected, Garnier would become chairman when Robert Cawthorn steps down next year.
Open Door
Elliott is nominating James Shannon, former head of drug development at Novartis AG, and five others including Elmar Schnee, former head of pharmaceuticals at Merck KGaA, to the board.
Scodari left open the door to possible talks with Elliott before the meeting, adding that no negotiations are taking place and none are scheduled.
“At this juncture we don’t believe it’s appropriate to make an outreach but I think it would be inappropriate for me to say that that’s completely off the table,” he said. “Circumstances may develop where either they believe it makes sense to do that, or we believe it makes sense to do that.”
Elliott won partial backing from a shareholder advisory group last week. Institutional Shareholder Services Inc., or ISS, said in a report that investors should vote for three nominees to the board put forward by Elliott. Actelion said April 21 that Glass Lewis, an independent governance and proxy voting firm, advised shareholders to re-elect the company’s board.
Structural Change
Actelion’s board is considering changes to the structure of the company, including paring some costs, Scodari said. Job cuts are a possibility, he said.
“We would not rule anything out, so that would include reductions in force if and when it’s determined that those reductions make sense,” he said.
Switzerland’s biggest biotechnology company is also mulling larger acquisitions, something Actelion couldn’t have considered five or six years ago, according to Scodari.
“The board and management is very open to larger transactions and in fact that’s been under consideration for some time,” he said. “When and if the right situation emerges, we would absolutely move forward with that.”
To contact the reporter on this story: Dermot Doherty in Geneva at ddoherty9@bloomberg.net
To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net
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