Ariad Pharma CEO ‘Retires’ in Settlement With Activist Hedge Fund (The Street)
Ariad Pharmaceuticals founder and CEO Harvey Berger is exiting the struggling cancer drug company in a settlement with Sarissa Capital, the activist hedge fund led by Alex Denner, the company said Wednesday. Denner’s fund, which owns almost 7% of Ariad, started a proxy fight last February to wrest control of the board and force Berger’s ouster. Ariad shares tumbled in 2013 because safety problems tied to the company’s leukemia drug Iclusig led to restrictions on its use and cut into sales growth significantly.
Vulture Circles Indebted Tech Companies (CNBC)
Silicon Valley may still be chasing the proverbial unicorns of technology, but at least one big Wall Street investor is thinking more like a vulture. Steve Tananbaum, a leading investor in the bonds of troubled companies, said the technology arena is one of the most interesting opportunities in the market today, given the high debt load carried by mediocre companies. “One sector that hasn’t gotten as much attention in the press but we think is very vulnerable is the technology sector,” the chief investment officer of $23 billion GoldenTree Asset Management said Tuesday at the Milken Institute Global Conference in Los Angeles.
Ackman Activism Deja Vu Evoked as Railroad Options Surge (Bloomberg)
Bullish options on railroad stocks including CSX Corp. have surged amid speculation that an activist investor is building a stake in one of the companies. CSX’s stock jumped 11 percent last week as trading volume ballooned to more than double the five-year average. To UBS AG analyst Thomas Wadewitz, the trading was reminiscent of what occurred with Canadian Pacific Railway Ltd. when billionaire hedge-fund manager William Ackman was buying shares prior to a proxy fight that led to a boardroom coup.
Mayer Brown’s Brian Nolan On Strategy Behind Drug Patent Challenges (Reuters)
Prominent hedge fund manager Kyle Bass‘ threat last January to knock out big pharmaceutical companies’ patents has not proved idle. In recent months, his Coalition for Affordable Drugs has filed petitions for inter partes review of nine drug patents at the U.S. Patent and Trademark Office. The review process was part of a series of reforms brought about by the 2011 America Invents Act, making it faster and easier to challenge patent validity outside of federal courts, and allowing petitions by third parties.