Ariad Pharmaceuticals Inc., the cancer-drug maker that lost 58 percent of its value in the last year, added activist investor Alex Denner to its board.
Ariad will also add a second new director to be agreed on with Denner, which would bring the board’s size to 10, the Cambridge, Massachusetts-based company said today in a statement. The stock rose 1.6 percent to $8.87 at the close in New York.
Denner’s Sarissa Capital Management LP is Ariad’s second-largest stockholder, with 12 million shares, or about 6.5 percent of the company. The activist started buying the stock and asked for board representation in October, after Ariad shares plunged on regulators’ concerns over the safety of its cancer drug, Iclusig.
“The agreement we reached offers the opportunity to immediately work together with the existing board to maximize the potential of Iclusig and the pipeline of cancer medicines and to build value for all shareholders,” Denner said in the statement.
Denner is also on the boards of drugmakers Vivus Inc. and Biogen Idec Inc., the latter of which he joined while working with billionaire Carl Icahn. Denner left Icahn in 2011 to found Sarissa with Richard Mulligan, another Biogen director.
He joins Ariad as the company recovers from a blow last year when the Food and Drug Administration halted marketing of Iclusig over safety concerns. The drug was off the market for about two months, erasing about $2 billion in Ariad’s market value. In December, the FDA gave the go-ahead for Ariad to sell Iclusig again, to a narrower set of patients and with increased safety oversight.
Denner hasn’t outlined his plans at Ariad, other than to say the shares are undervalued and that Iclusig has the potential to benefit many patients. Approved for rare forms of leukemia, Iclusig is expected by analysts to generate $317 million in 2018 revenue.
During his five years with Icahn, Denner targeted at least six drugmakers and prompted the sales of three, including ImClone Systems Inc. in 2008 for $6.5 billion to Eli Lilly & Co. and Genzyme Corp. in 2011 for about $20 billion to Sanofi.
“We welcome Dr. Denner to the company’s board and look forward to working with him to continue building shareholder value, which we all believe is best achieved through successful commercialization of Iclusig, as well as the ongoing development of our strong pipeline of important cancer medicines,” Ariad Chief Executive Officer Harvey Berger said in the statement.