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Roumell Asset Management Salutes Actions Taken at Transcept Pharmaceuticals Inc (TSPT)

Jim Roumell‘s fund Roumell Asset Management, has disclosed, in a newly amended filing, that it has sent a letter to the board of directors of Transcept Pharmaceuticals Inc (NASDAQ:TSPT), in which it salutes the actions taken by the company. Roumell had announced its intentions to enter into discussions with Transcept’s board earlier in September.

James Roumell

“To that end, we believe the company has taken a number of positive and noteworthy steps and we applaud those efforts.  The company has in fact implemented a meaningful workforce reduction, clearly identified its intention to merge, sell or liquidate and ended costly human trials on its DHE initiative,” Roumell said in the letter.

At the same time, according to the letter, Roumell’s earlier proposal to nominate Matthew Loar on the company’s board was accepted by Trasncept.

“Moreover, we believe the company’s current process is a good one.  We believe possible reverse-merger alternatives ought to be explored in the context of a substantial cash distribution to shareholders.  Further, any reverse-merger candidate should be required to invest additional capital into the new company to insure alignment of interests. The right reverse-merger candidate would have the added benefit of allowing shareholders continued optionality on Intermezzo,” the fund also said.

Roumell currently holds around 2.2 million shares of Transcept, reporting at the end of last week selling around 10,500 shares. Overall, the fund trimmed its stake in the company from around 2.25 million shares, disclosed in its latest 13F.

Transcept Pharmaceuticals Inc. (NASDAQ:TSPT) is a Point Richmond, California based specialty pharmaceutical company that largely focuses on development and commercialization of therapies in the field of neuroscience. Intermezzo, a sublingual formulation of zolpidem for the treatment of insomnia, is Transcept Pharmaceuticals’ principal product. The company has collaborated with Purdue Pharmaceutical Products, L.P. for commercializing Intermezzo in the U.S. and has also granted it the negotiation rights for the commercialization in Canada and Mexico.

Recently, Transcept Pharmaceuticals Inc. (NASDAQ:TSPT) announced that an independent proxy voting and corporate governance advisory firm, Glass Lewis & Co., recommended its stockholders to vote ‘Against’ all proposals introduced by a stockholder group consisting of Roumell Asset Management, SC Fundamental and Retrophin, Inc.. Moreover Glass Lewis & Co. also noted that the features of the Tax Benefit Preservation Plan between Transcept and American Stock Transfer & Trust Company, LLC are reasonable.

Several hedge funds have been bullish on Transcept Pharmaceuticals Inc. (NASDAQ:TSPT) so far. Renaissance Technologies, managed by Jim Simons, has increased its holding of Transcept Pharmaceuticals Inc. (NASDAQ:TSPT)’s stock by 32% during the third quarter, currently owning 108,200 shares, worth $344,000. D. E. Shaw, managed by D. E. Shaw also holds a stake worth $117,000 in the company, which amasses 36,648 shares.

Disclosure: none

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