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Sarissa’s Denner quits Biogen board as firm seeks seats at Alkermes

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By Svea Herbst-Bayliss

NEW YORK (Reuters) – Activist investor Sarissa Capital may have cleared a stumbling block in its push for board seats at Alkermes when one of its candidates resigned from the board of a company that has a commercial relationship with the drugmaker.

The hedge fund’s founder, Alex Denner, one of three Sarissa candidates running for seats on Alkermes’ 11-member board, said this week that he will give up his board seat at biotech Biogen.

The move eliminates “any claim of conflict whatsoever,” Sarissa wrote to Alkermes shareholders on Tuesday morning.

Alkermes licensed bipolar disorder treatment Lybalvi and the multiple sclerosis drug Vumerity to Biogen for commercialization, and some analysts worried it would be problematic for Denner to potentially sit on both companies’ boards.

Sarissa owns 8.45% of Alkermes, which is valued at $5.2 billion. This is the third time the firm is mounting a challenge. In 2021, Sarissa and Alkermes reached an agreement to add a new director. Last year Sarissa dropped a board challenge, and this year it has nominated three candidates.

The hedge fund is criticizing the performance of Alkermes’ stock, which has lost 38% over the last five years. But it has gained 49% since a value enhancement plan establishing profitability targets was announced in late 2020, and is up 21% since January.

Alkermes is urging shareholders to stick with its current directors and not elect any Sarissa candidate. The company said Denner, who earned advanced degrees in mechanical engineering, does not bring relevant skills to the board, and that it already has an investor representative on its board after settling with hedge fund Elliott Management in 2020.

Shareholders will vote on directors on June 29 in what is one of the year’s five biggest boardroom challenges.

(Reporting by Svea Herbst-Bayliss; Editing by Bill Berkrot)

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