Actelion Ltd. said hedge fund Elliott Advisors (UK) Ltd. is trying to seize control of the Swiss drugmaker at a time when products in development are approaching key milestones.
Elliott, which has nominated six candidates for Actelion’s board, wants to take control without paying for it, with the sole goal of forcing “a quick sale,” the company said in a letter to shareholders, encouraging them to register their stock for the May 5 annual meeting.
Results of a late-stage clinical trial on the macitentan lung drug are due late this year or early in 2012, and another compound, selexipag, also is in the final phase of tests, Actelion said. The treatments, designed to treat pulmonary arterial hypertension, “represent very attractive medical and commercial opportunities,” the company said.
Elliott’s effort “is an ill-timed attempt that would surrender to a potential acquirer the future value that rightly belongs to all shareholders,” Actelion said in the letter.
Actelion is making its case to shareholders after Elliott, part of a $17 billion hedge fund founded by Paul Singer, made presentations to investors during meetings in London, New York and Zurich. Elliott wants the company to consider options including a sale, and has said Actelion’s co-founder, Chief Executive Officer Jean-Paul Clozel, should leave the board.
Actelion rose 15 centimes, or 0.3 percent, to 52.10 Swiss francs at the close of trading in Zurich, giving the company a market value of 6.78 billion francs ($7.4 billion).
The share price has quadrupled since Actelion’s initial public offering 11 years ago, “significantly outperforming its listed biotech peers,” the company said. Actelion had record revenue and earnings last year. Elliott is a “relatively new shareholder” and owns about 6 percent of Actelion’s stock, according to the company.
“Actelion’s management does not want to offer shareholders a choice in the future direction of the company, and that is made clear in today’s letter,” Elliott Advisors, the London arm of Singer’s New York-based firm, said in an e-mailed statement today.
“In our recent meetings with shareholders, the overwhelming response continues to be that the current board of Actelion and its founder are not willing to have an open and comprehensive discussion about the company’s strategic alternatives,” Elliott said.
The hedge fund’s nominees met with investors in Zurich on March 25 after similar meetings in London and New York. The fund nominated James Shannon, former head of global development at Novartis AG, as Actelion chairman.
The fund’s other nominees are Robert Hock, a former investment banker at JPMorgan Chase & Co.; Anders Haerfstrand, former chief executive officer of Swiss drugmaker Nitec Pharma AG; Hans-Christian Semmler, chief executive at Haupt Pharma AG; Peter Allen, CEO of ProStrakan Group Plc, and Elmar Schnee, the former head of pharmaceuticals at Merck KGaA.
Actelion’s chairman and eight of nine directors are independent, the company said. Elliott approached two Actelion board members, Joe Scodari and Carl Feldbaum, and asked them to effectively endorse the fund’s slate, according to the Actelion letter, which was signed by all directors. Scodari and Feldbaum declined to do so, Actelion said.
“They do not believe the candidates proposed by Elliott have either comparable or better experience or expertise, nor are they more independent than the current Actelion board of directors,” the company said.
Actelion got about 85 percent of its 1.93 billion Swiss francs in revenue last year from sales of Tracleer, which treats pulmonary arterial hypertension. Macitentan would be a successor to Tracleer, which begins to lose patent protection in 2015.