|Billionaire Paul Elliott Singer of Elliot Investment has been described as one of the country's toughest money managers and a vulture investor. His firm has targeted Alexion for changes or a possible sale.|
By Mitchell Young
NEWHAVEN: All bets may be off at Alexion Pharmaceuticals [ NYSE: ALXN] as an activist investor announced it has taken a position in the company and is seeking major changes and potentially force a sale of the company.
According to the news site Fiercebiotech, Leerink Partners analyst Geoffrey Porges has called Alexion “one of the rare, once or twice per decade, activist investment situations in the biopharmaceutical industry.”
Apparently activist investor Elliott Management agrees, with the analyst, the New York Times, reports that Elliot has taken a position in the company and will likely press the company to do more to boost its share price.
In mid September the company’s stock price was $149 per share and analysts were recommending that it could reach $170 this year. New Alexion CEO Ludwig Hantson announced a new direction for the company on September 12 including a re-location of its headquarters to Boston and a restructuring of the company reducing the workforce by 20%.
The market reaction to the company’s financial guidance and new direction was not positive and the stock traded at just above $105 per share on December 7th.
The Times wrote that Elliot was seeking a more aggressive plan for the company including the potential sale of the company. The current market value of the company is approximately $25 billion. Revenue for the company and profits for the company have continued to grow, but Hantson’s guidance suggested it could slow down. Several companies have been working on new drugs that would target the same disease, paroxysmal nocturnal hemoglobinuria [PNH], that drives Alexion’s sales, including New Haven based Achillion Pharmaceuticals [Nasdaq: ACHN].
Reaction to the Elliot investment sent Alexion stock up 6% so far today [ December 8].
According to the Times, Elliot met with Alexion management in October and presented a list of four new potential board members for the company, a deadline for adding board members is imminent.
Alexion has responded to press inquiries saying, “Alexion believes in active and constructive dialogue with all of our shareholders, and we value their perspectives.”
Hantson’s restructuring already was cutting more than $250 million per year in expenses, even as the company’s drug development efforts in its core franchise were continuing to meet new success with regulators and the marketplace.
The relocation to Boston was proffered by Hantson to allow the company to access that city’s biotech community to help develop new drug candidates. On December 7 the company announced a licensing deal with a down payment of $40 million [see Licensing] that would bolster the company’s core franchise’s ability to fend off competitors.
Early last month we wrote that the company needed to add more bioscience savvy executives to its Board, the Times reports that Elliot made that a demand as well at their meeting.
The company announced the addition of rare disease bio-science executive Francois Nader, M.D. on November 11, soon after the meeting with Elliott.
While the stock performance of the company has been very bad in the past few months, the company has received regulatory approvals for new uses of its franchise drug Soliris and has reported positive results on multiple clinical trials for its sales' challenged Kanuma drug and for its next generation Soliris replacement.