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Update 21:00: Add comment Exelixis.
exélixis (NASDAQ:EXEL) will face a proxy battle with hedge fund Farallon Capital, which announced last Monday that it had nominated three people to the biotech firm. exelixis up 1% in pre-market trade.
“We believe that the Company should focus their R&D efforts and spending, communicate a differentiated and coherent strategy, commit to continued distributions of excess capital to shareholders, and augment the Board with fresh perspectives,” Philip D. Dreyfuss, Partner at Farallon wrote in a letter Wednesday at the Exelixis meeting. “That is why we recently notified you that we intend to nominate three exceptional director candidates to the Board.”
When Farallon announced that he would nominate the directors last week, he had not yet decided whether to go ahead with a proxy battle and was trying to work with the company, according to a WSJ report on Tuesday. Farallon had been in talks with Exelixis (EXEL) about the fund’s main concern, which is research and development spending, the WSJ said. Those talks recently fell apart.
Exelixis (EXEL) recently reached a near-final agreement to avoid a proxy contest that included the appointment of two of Farallon’s nominees and the announcement of the retirement of two long-standing directors and the formation of a new Nomination Committee. of Capital, the company said in a statement in response. to the Farallon letter. An agreement was never reached.
“…Farallon demanded a highly unusual breadth and depth of access to information as a non-negotiable part of any agreement, including unprecedented access to the pipeline, people and date of the Exelixis clinical trial,” said Exelixis (EXEL ) in the statement. “This would put the Company and all of its shareholders at risk, something the Company cannot accept.”
Last month, Farallon Capital, which has a 7.2% stake in Exelixis (EXEL), said biotech is undervalued and “needs to revamp the board.” Farallon said in Wednesday’s letter that it has been continuously investing in Exelixis since 2018.
Farallon also said that Exelixis (EXEL) has more than $2 billion in cash and marketable securities on its balance sheet that it needs to find ways to distribute to holders.
“We were pleased to see that the Board responded to our call for a return of capital with its recent share repurchase announcement, but from our perspective, the plan does not go far enough,” Farallon’s Dreyfuss wrote in the letter.
Last month, Exelixis (EXEL) authorized a $550 million repurchase program of the company’s common shares by the end of 2023.
