Biotech and Pharma

Activist Alex Denner to gain board control at Medicines Co.

Key Points
  • Medicines Co. is restructuring its board, cutting to 7 members from 12.
  • More than half of the smaller slate has ties to activist investor Alex Denner of Sarissa Capital.
  • Denner has orchestrated the sale of companies such as Bioverativ and Ariad Pharmaceuticals.
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Biotech firm The Medicines Co. said it's restructuring its board to just seven members from the current 12. More than half of the smaller slate is affiliated with activist investor Alex Denner of Sarissa Capital.

Medicines Co. shares jumped more than 4 percent on the news.

The seven directors to be nominated for election at this year's annual shareholder meeting are Denner, company Executive Chairman Fredric Eshelman, Geno Germano, John Kelly, CEO Clive Meanwell, Paris Panayiotopoulos and Sarah Schlesinger, Medicines Co. said in its annual report Thursday. The company didn't publicize the proposed changes further.

Germano, Panayiotopoulos and Schlesinger have all been involved with other companies Denner's invested in, two of which Denner – a Carl Icahn protege – ultimately orchestrated the sale of: Bioverativ and Ariad Pharmaceuticals.

"As a result of the rapid and significant evolution our business and the narrowing of our operational focus onto inclisiran, our board of directors determined to restructure the board, adding directors with relevant expertise and experience and reducing the board's overall size from twelve to seven members, providing a more agile and efficient structure," the company said in its 10-K filing. Inclisiran is an experimental cholesterol drug in the company's pipeline.

The five directors not included in the new slate are William Crouse, Elizabeth Wyatt, Melvin Spigelman, Hiroaki Shigeta and Armin Kessler.

Neither the Medicines Company nor Denner immediately responded to requests for comment.

Denner's Sarissa Capital owned 2.6 percent of the Medicines Co.'s shares as of Dec. 31, regulatory filings show. The fund, which specializes in pharmaceuticals and biotechnology investments and shareholder activism, first purchased Medicines Co. shares in March 2015 at a cost of $27.53 per share, according to FactSet data.

Medicines Co. has a market value of just more than $2 billion. It reported 2017 revenue of $44.8 million from the approved drug Angiomax, a blood thinner.

The company's main focus is the experimental medicine inclisiran, in a category of cholesterol drugs known as PCSK9 inhibitors. Two are already on the market, from Amgen and Regeneron, partnered with Sanofi. Early sales have disappointed, though some key data are expected this month on Regeneron and Sanofi's drug, Praluent, that investors hope could spur sales. Inclisiran is designed to have to be injected less frequently than the already marketed products.

Denner came to prominence working with Icahn on a number of biotech investments that resulted in sales, including ImClone Systems to Eli Lilly in 2008 for $6.5 billion, and Genzyme to Sanofi in 2011 for $20.1 billion.

Denner split with Icahn in 2012 to form Sarissa. In January 2017, he orchestrated the sale of biotech company Ariad to Japanese drugmaker Takeda, for $5.2 billion. Panayiotopoulos was CEO of Ariad and Schlesinger was a director.

In November, Denner helped facilitate the sale of hemophilia drug maker Bioverativ, for $11.6 billion, to Sanofi, a little more than a year after the company was spun out of Biogen, of which Denner is a director. Germano was a director of Bioverativ.

Sarissa also holds stakes in AbbVie, Biogen and Innoviva, among other drug companies. It added stakes in Allergan, Intercept Pharmaceuticals and Ironwood Pharmaceuticals at the end of 2017, according to a regulatory filing.