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Alkermes rebuffs challenge from activist investor Sarissa—for now

Shareholders in Alkermes have quelled a challenge from Sarissa Capital, reelecting seven board members and rejecting three nominees from the activist investor, the Ireland-based drugmaker said.

Early this month, Sarissa, which owns $400 million of Alkermes’ stock for an 8.5% stake, sent a letter to shareholders urging for transformation of the “undervalued” company.

But Sarissa did not find enough support from shareholders for its board nominees Alex Denner, Ph.D., Sarah Schlesinger, M.D., and Patrice Bonfiglio.

Alkermes did not reveal results of the vote, which occurred Thursday at the company’s annual meeting. Those will be reported in an upcoming Securities and Exchange Commission filing, Alkermes said in a release.

“We believe this outcome is a reflection of our strong performance and robust corporate governance practices,” Nancy Wysenski, the director of Alkermes’ board, said in a release. “We remain focused on executing on our strategic priorities for the benefit of all shareholders, including our commitment to operational efficiency, disciplined capital allocation and profitability.”

Alkermes has been guided since 1991 by one of the industry’s longest-tenured CEOs, Richard Pops. After a decade of growth, revenues have been stagnant over the last five years, toggling between $1 billion and $1.2 billion. Over that period, Alkermes’ share price has fallen from more than $44 to its current $31.47.

“For too long, Alkermes has been run for the benefit of management and not for shareholders,” Sarissa said in its letter early this month. “For over thirty years, the company has almost consistently operated at a loss.”

A month ago, the company got a boost when an arbitration panel ruled in its favor in a licensing disagreement with Johnson & Johnson over Alkermes’ NanoCrystal technology. The ruling prompted Alkermes to bump up its revenue forecast for 2023 by $425 million to a projected range of $1.55 billion to $1.68 billion.

Early last week, Alkermes’ management gained more traction when an independent advisory firm recommended that shareholders reject the Sarissa board nominees and support the company’s current direction.

Earlier this year, Sarissa was successful in transforming the board at another struggling Dublin ompany—Amrin—as it replaced Chairman Per Wold-Olsen and prompted the resignation of CEO Karim Mikhail.

Earlier this month, Sarissa’s chief investment officer Denner quit his seat on the board at Biogen, strengthening his push for a place on Alkermes’ board. Shortly after that move, Biogen investors elected Denner’s partner, Susan Langer, to fill his slot.