IRISH BIOTECH group Elan last night announced a boardroom shake-up that will see one of the management’s most vociferous critics become a non-executive director of the company.
Jack Schuler, a former president of Abbott Laboratories, was last night named as one of three people the company proposes to nominate for election to the board at the company’s annual general meeting (agm) next month.
Mr Schuler has been outspoken in his views on the competence of chief executive Kelly Martin and chairman Kyran McLaughlin to maximise the company’s revenues from its key drug, Tysabri, the breakthrough treatment for multiple sclerosis.
He has also voiced concerns about the company’s strategic review under which Citigroup is examining options – including the sale of all or a minority stake in the company – to fund its future development.
Mr Martin said on Wednesday that it was in the “last phases” of the strategic review, although he said it could be a year before a deal was agreed. Speaking at an investor conference hosted by Goldman Sachs, Mr Martin was asked whether a decision would be announced in the next six months to a year. “I don’t want to put a specific time frame, but in the near term we would hope to reach a conclusion. That’s about as specific as I can get.”
Mr Schuler, whose activist investment firm Crabtree Partners owns about 1 per cent of the Irish company, has accused Mr Martin of destroying value in the company.
He also established a website, fixelan.com, as a forum for discontented shareholders and held out the possibility of rebel shareholders nominating their own slate of directors at the agm. The fixelan.com was last night inaccessible.
Elan needs funds to pay for trials of drug candidates, led by its most promising treatment, bapineuzumab for Alzheimer’s disease, and to repay $1.1 billion in debt due in November 2011. The company expects to have about $200 million of cash and investments at the end of the year.
Elan also announced last night that it would nominate Vaughan Bryson, a 32-year veteran of Eli Lilly who has also acted as an adviser in the healthcare industry. They will join another former Eli Lilly executive, Richard Pilnik, who was appointed to the company’s board in May as part of Elan’s commitment to Mr Schuler last February to beef up the commercial focus of the company.
Elan said last night that three current directors would step down at the agm. They are Dennis Selkoe, Ann Maynard Gray and Floyd Bloom.
Dr Selkoe has been an Elan director since 1996 when the company bought Athena Neurosciences – the company whose intellectual property has provided the basis for the most high-profile elements of Elan’s recent drug pipeline. Dr Selkoe, a neurologist, was one of Athena’s founders. He is also professor of neurology and neuroscience at Harvard University. Ms Gray has served on the Elan board since 2001 while Dr Bloom was only appointed to the Elan board in July 2007.
The changes mark a significant shift in emphasis in the Elan boardroom with all three nominees boasting significant industry experience while the departing directors are more closely identified with academia and research. – (Additional reporting, Bloomberg)
