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Martin Shkreli Has Taken An Activist Position in AMAG

Martin Shkreli, CIO of MSMB Capital Management, took a 5.8% ownership interest in Amag Pharmaceuticals (AMAG) in a bid to prevent Amag merging with Allos Therapeutics (ALTH). Before the deal is made official, Shkreli will have to prove he has the funds available for the $18-a-share purchase.

Phill Gross

Shareholder Support for Shkreli

Shkreli is actively advocating against the merger. He has even submitted a proposal that asks Amag shareholders to dismiss six of the board’s seven directors and replacing them with five MSMB nominees. Further, he is not alone in his opposition to the merger. Adage Capital Management and Palo Alto Investors own 17.5% and 15% of Amag respectively. Both companies have said they are also opposed to a merger between Amag and Allos, citing a disagreement with the financial and the strategic rationale behind the merger. According to TheStreet, there is no word yet as to whether Adage and Palo Alto support the measures Shkreli wants to take with regards to the Board. Amag will have a difficult time pushing the merger through without the support of Shkreli, Adage and Palo Alto considering that between them they own more than 38% of the company.

Shareholder Dissent Angers Amag

Their dissent seems to be provoking the management. An Amag shareholder, who asked to not be identified, told TheStreet, “Voting no on the Allos deal is a referendum against Amag’s management team.” Also, TheStreet reports “If the current Amag board survives, directors will face tremendous pressure to fire Amag CEO Brian Pereira and put the company up for sale. For all intent and purpose, a sale of Amag will really be a simple auction of the company’s only asset Feraheme, an injectable iron replacement therapy for anemia in patients with chronic kidney disease.”