venBio Committed to Delivering Much-needed Change at Immunomedics
Believes Immunomedics Lawsuit to Silence Stockholders is Baseless
venBio’s Four Board Nominees Have the Right Experience,
Capabilities, and Independence to Chart Best Course Forward for ALL
Stockholders – Including Fairly Evaluating the Seattle Genetics
Partnership and Any Potentially Superior Alternatives
Vote on the GOLD Proxy Card for
venBio’s Four Highly-Qualified Nominees Today
NEW YORK–(BUSINESS WIRE)– venBio Select Advisor LLC (“venBio”), the beneficial owner of
approximately 10.5 million shares, or 9.9%, of Immunomedics, Inc.
(NASDAQ:IMMU) (“Immunomedics” or the “Company”) and its largest
stockholder, today sent a letter to Immunomedics stockholders in
connection with venBio’s nomination of four highly-qualified candidates
– Scott Canute, Peter Barton Hutt, Dr. Khalid Islam, and Dr. Behzad
Aghazadeh – for election to the Company’s Board of Directors (the
“Board”) at the upcoming 2016 Annual Meeting of Stockholders, which is
currently scheduled to be held on March 3, 2017.
The full text of the letter follows:
Dear Fellow Stockholders:
With the Immunomedics Annual Meeting quickly approaching, you,
our fellow stockholders, face a critical choice. Will you allow
the same type of self-enrichment and strategic missteps that have
characterized Immunomedics for decades to continue unchecked? Or will
you elect Board members who have deep experience in the areas that are
specifically relevant to Immunomedics’ future success and the
independence to truly act in your best interests?
As you carefully consider this important decision, we urge you to keep
in mind the following facts:
-
Immunomedics’ management and Board have an established track record
of acting in the best interests of themselves – not all stockholders.-
As a result of repeated strategic missteps, the Company has
brought ZERO drugs to market over the course of its entire 35-year
history. -
While stockholders have suffered through the Company’s serial
capital dilutions and decades-long share price underperformance,
the husband-wife team of Chief Scientific Officer David Goldenberg
(“Dr. Goldenberg”) and Chief Executive Officer Cynthia Sullivan
(“Ms. Sullivan”) – who have occupied nearly half the Board until
recently – have generously rewarded themselves at stockholders’
expense – paying themselves nearly $45mm in
compensation.1 -
Notably, Dr. Goldenberg was paid $4.2M in FY2016, including $3.4M
of stock awards, while the Company’s share price declined 41%. Ms.
Sullivan was paid $1.4M during the same period, including $350K in
stock awards despite a failure to achieve any of the Company’s
stated goals. 2 -
The Board’s decision to allow Dr. Goldenberg to allocate IMMU
product ownership rights between the Company and a subsidiary that
he partially owns is emblematic of the Board’s acquiescence to
management. -
As Adam Feuerstein, a reporter at investment publication TheStreet,
noted: “Thirty-five years of continuous R&D without an approved
drug is an astounding record of futility, made worse by feckless
corporate governance that has allowed [Dr. David] Goldenberg and
[his wife, CEO Cynthia] Sullivan to each make millions of dollars
in salary, bonuses, related-party consulting fees and stock
grants, all at shareholder expense.”3
-
As a result of repeated strategic missteps, the Company has
-
venBio launched a proxy contest, nominating four highly-qualified
candidates for the Board to finally bring the oversight we believe
Immunomedics desperately needs in alignment with the interests of all
stockholders.-
As Immunomedics’ largest investor, we want the best outcome for
all stockholders – the true owners of the Company. This is why we
could not sit idly by and let the value of Immunomedics be further
squandered, and instead chose to nominate four
highly-qualified nominees – Scott Canute, Peter Barton Hutt, Dr.
Khalid Islam, and myself – to the Board. -
Our nominees were deliberately and
thoughtfully recruited based on their deep mix of experience
in pharmaceutical development and breast cancer, commercial
manufacturing and regulatory issues, pharmaceutical partnering and
deal making, and an understanding of the capital markets. -
Our nominees will bring an independent approach to the Board and
build a culture of strong oversight and effective management to
drive value at the Company and rapidly deliver IMMU-132 to
patients in need. -
venBio is completely aligned with stockholders. Unlike some
members of the current Board and management, our only interest in
the Company is through our stockholdings – not through personal
ownership stakes in subsidiaries, royalty arrangements and other
perks.
-
As Immunomedics’ largest investor, we want the best outcome for
-
Independent third-parties and other stockholders have recognized
that venBio’s slate is the best path for Immunomedics.-
In an extremely rare occurrence, the three
leading proxy advisory firms – ISS, Glass Lewis, and Egan Jones –
ALL supported venBio’s full slate.-
With regard to our slate’s ability to lead Immunomedics
forward, Glass Lewis noted: “… [W]e find that the Dissident
Nominees are well qualified to oversee the IMMU-132
development process with minimal disruption, given their
considerable experience in the pharmaceutical industry and
with the FDA regulatory process.” -
Specific to investor support for venBio’s slate, leading proxy
advisory firm Institutional Shareholder Services (“ISS”)
noted: “The lack of stock appreciation in a year in which
IMMU-132 achieved above expectations phase 2 clinical trial
results, combined with a strong inflection point after the
dissident made its campaign public represent strong evidence
against management.”
-
With regard to our slate’s ability to lead Immunomedics
-
The Company’s second largest stockholder,4 a highly
respected healthcare investor, independently publicly announced
its support for venBio’s nominees.
-
In an extremely rare occurrence, the three
-
While Immunomedics has made numerous statements since we launched
our campaign claiming to prize “shareholder value,” their actions
reveal what we believe is their true motivation: self-preservation and
entrenchment at the expense of stockholders’ interests.-
In reaction to our campaign, the Company initially significantly
delayed the Annual Meeting from December 14, 2016 to February 16,
2017. -
The Company then hastily appointed
self-selected new Board members – which we believe mirrored the
previous Board in terms of its lack of true independence and
absence of applicable experience.5-
As ISS noted: “First, the fact that the board only moved to
fix its governance problems after the dissident started its
campaign suggests a reactive response,
as opposed to a carefully considered refreshment.
Second, considering the long history of execution missteps and
conflicts of interest, Goldenberg and
Sullivan’s leadership of this refreshment process appears to
undermine its sincerity.”6
-
As ISS noted: “First, the fact that the board only moved to
-
Immunomedics put together a last-ditch effort to attempt to sway a
proxy vote that favored venBio at the time the Board made its
decision7 – by signing away the Company’s prized asset,
IMMU-132, to Seattle Genetics (SGEN). We
believe this was a rushed deal that does not deliver fair value
for stockholders.8 -
In a separate announcement the same day it announced the deal, the
Company delayed the Annual Meeting AGAIN, this time to March 3,
2017. -
Last week, Immunomedics once again changed the rules in the middle
of the game by amending its bylaws to switch from a majority vote
condition to a plurality vote for the election of directors. The
change in the voting standard to a plurality now virtually
guarantees that three incumbent Board members will be elected,
irrespective of how many stockholders vote against their election.
The Company misleadingly labeled this complete change in election
standard as a “clarif[ication],” indicating the lengths the Board
will go to in order to protect their positions.
-
In reaction to our campaign, the Company initially significantly
-
Immunomedics has now resorted to the desperate measure of suing its
stockholders, and seeking to disenfranchise these voters from having
their voices heard.-
On February 17, 2017, the Company filed a lawsuit that is
factually and legally baseless. Based on
record date information and 13F filings, we believe at least 20%
of Immunomedics’ stockholders are targeted in this suit. We
believe this is just the latest example of the Company wasting
stockholders’ money to serve the self-interest of management and
the existing Board. -
The lawsuit makes a number of false claims about venBio (IMMU’s
largest stockholder), IMMU’s second largest stockholder and a
highly respected healthcare investor, and a long-standing and what
appears to be extremely well-educated contingent of retail
investors – many of whom we believe have stood by the Company for
years when very few others would. -
Immunomedics’ stated objective is to prevent the votes of these
stockholders — and the votes of all other stockholders who voted
in favor of venBio’s slate — from being counted at the upcoming
Annual Meeting and is seeking a declaration that those votes are
null and void. -
Contrary to the Company’s initial assertion on the heels of
announcing the SGEN deal and even after the delay in the date of
the stockholder meeting, they are now also seeking permission to
set a new record date for the third time. -
The fact that Immunomedics has come to the point where they are
aiming to use stockholder money to silence venBio and to void
stockholder proxies is deeply troubling – though
based on their pattern of behavior, unfortunately not surprising. -
We are also troubled by the Company’s recent
announcement that it irrevocably waived a closing condition for
the SGEN transaction in what we believe is an apparent attempt to
handcuff a future Board, with the effect of making it more likely
that SGEN will bring a lawsuit should a new Board be presented
with a better transaction.
-
On February 17, 2017, the Company filed a lawsuit that is
-
venBio is not backing down and will continue to stand for the
rights of all stockholders and the election of a more qualified and
truly independent Board.-
We strongly believe stockholders’ views should be heard and
respected, and the future of the company should be determined by
an elected Board, not an appointed Board. -
We believe the recently announced deal with Seattle Genetics was
put together hastily as a last-ditch effort to attempt to sway a
proxy vote that has favored venBio – and it may not be the best
option for all IMMU stockholders. -
This is why we believe that an elected Board should have the
chance to fully evaluate the deal before it
is consummated.-
As more details of the Seattle Genetics agreement come to
light, Wells Fargo analyst Jim Birchenough recently critiqued
the deal, noting: “We view the 15% royalty [for licensing
IMMU-132] as relatively low for a late stage oncology asset,
and while 20% royalty could be considered average, it is
unclear whether that rate of royalty could be reached within
triple negative breast cancer (TNBC) sales without further
detail on sales thresholds for royalty tiering.”9
-
As more details of the Seattle Genetics agreement come to
-
As a result, we recently took legal action to protect
stockholders’ ability to have their voice heard before the Company
is fully committed to the Seattle Genetics partnership deal.-
We have successfully secured a commitment from Immunomedics
and SGEN to the Delaware Chancery Court to not close the
transaction prior to March 10, 2017, following the 2016 Annual
Meeting.
-
We have successfully secured a commitment from Immunomedics
-
We strongly believe stockholders’ views should be heard and
The choice that you face is clear: Endorse a Board
that has acted only reactively, continually acted in its self-interest
and that has not delivered value to stockholders, or elect Board members
that will be independent and experienced voices that will be focused on
achieving the most value for ALL Immunomedics stockholders.
Vote FOR all four of venBio’s highly-qualified
nominees on the GOLD Proxy Card today.
Sincerely,
Dr. Behzad Aghazadeh
IMPORTANT INFORMATION REGARDING THE VOTING PROCESS
Tell your Board what you think! Your vote is important. No matter how
many shares of Common Stock you own, please give venBio your proxy FOR
the election of the venBio Nominees.
In a proxy contest, only the latest dated proxy card or instruction form
counts. Please note that a vote against the Company’s nominees on the
White card is not the same as a vote for venBio’s nominees using the
GOLD proxy card or voting instruction form. To support venBio’s four
nominees, you must vote the GOLD proxy card or instruction form. If you
have previously voted on management’s White proxy card, a vote on the
GOLD proxy card or instruction form will count as long as it is your
latest dated vote.
If you have already voted any GOLD proxy card or instruction form
previously sent to you and have not accumulated additional shares since
that vote, your vote will automatically transfer to the new GOLD proxy
card or instruction form as of the January 24, 2017 record date and no
additional action is required. If you have accumulated additional
shares, you will have to take action on the new GOLD proxy card or
instruction form in order to have your full share position voted. To
vote the “GOLD proxy card” please follow the instructions on the voting
instruction form sent to you and vote electronically on www.proxyvote.com
or by phone with the number provided on the bottom of the GOLD form. In
order to vote electronically, you will need to locate your control
number, which will be the 16 digit number located inside a rectangular
box on the right hand side of the voting instruction form.
Alternatively, you can return the GOLD voting instruction form by mail
in the postage paid envelope provided to you.
If you have not received your GOLD proxy card or own less than 5,000
shares in any of your accounts, to vote these shares please follow these
steps:
1. Call your broker and request that your broker provide you with the 16
digit control number for all of your accounts for the venBio GOLD proxy
card regarding the Immunomedics meeting
2. Once you have all of your control numbers go to www.proxyvote.com
type in the control number and vote the GOLD proxy card
If you require additional assistance to vote your IMMU shares, please
call Okapi Partners at (855) 305-0857.
(212) 297-0720
Stockholders Call Toll-Free at: (855) 305-0857
E-mail:
info@okapipartners.com
About venBio Select Advisor LLC
venBio Select Advisor LLC (“venBio Select”) is the SEC registered
investment manager for venBio’s public markets strategy and its main
equity investment vehicle – the venBio Select Fund – which primarily
invests across the biotechnology and therapeutics sector. The venBio
Select Fund is managed by Dr. Behzad Aghazadeh, supported by a team of
seasoned professionals with advanced medical and scientific backgrounds,
and extensive investment experience in the biopharmaceutical industry.
The investment and business operations for venBio Select are based in
New York. venBio’s separate venture capital team operates and manages
their funds from San Francisco, partnering with industry leaders to
build biotechnology companies with a focus on novel therapeutics for
unmet medical needs.
About the Proxy Solicitation
venBio Select Advisor LLC, Behzad Aghazadeh, Scott Canute, Peter Barton
Hutt and Khalid Islam (collectively, the “Participants”) have filed with
the Securities and Exchange Commission (the “SEC”) a definitive proxy
statement and accompanying form of proxy to be used in connection with
the solicitation of proxies from the stockholders of Immunomedics (the
“Company”). All stockholders of the Company are advised to read the
definitive proxy statement and other documents related to the
solicitation of proxies by the Participants, as they contain important
information, including additional information related to the
Participants. The definitive proxy statement and an accompanying proxy
card is being furnished to some or all of the Company’s stockholders and
is, along with other relevant documents, available at no charge on the
SEC website at http://www.sec.gov/
or from Okapi Partners at 212-297-0720 or info@okapipartners.com.
Information about the Participants and a description of their direct or
indirect interests by security holdings is contained in the definitive
proxy statement on Schedule 14A filed by the Participants with the SEC
on December 6, 2016. This document is available free of charge from the
sources indicated above.
Warning Regarding Forward Looking Statements
THIS PRESS RELEASE CONTAINS FORWARD LOOKING STATEMENTS. FORWARD LOOKING
STATEMENTS CAN BE IDENTIFIED BY USE OF WORDS SUCH AS « OUTLOOK »,
« BELIEVE », « INTEND », « EXPECT », « POTENTIAL », « WILL », « MAY », « SHOULD »,
« ESTIMATE », « ANTICIPATE », AND DERIVATIVES OR NEGATIVES OF SUCH WORDS OR
SIMILAR WORDS. FORWARD LOOKING STATEMENTS IN THIS PRESS RELEASE ARE
BASED UPON PRESENT BELIEFS OR EXPECTATIONS. HOWEVER, FORWARD LOOKING
STATEMENTS AND THEIR IMPLICATIONS ARE NOT GUARANTEED TO OCCUR AND MAY
NOT OCCUR AS A RESULT OF VARIOUS RISKS, REASONS AND UNCERTAINTIES.
EXCEPT AS REQUIRED BY LAW, VENBIO AND ITS AFFILIATES AND RELATED PERSONS
UNDERTAKE NO OBLIGATION TO UPDATE ANY FORWARD LOOKING STATEMENT, WHETHER
AS A RESULT OF NEW INFORMATION, FUTURE DEVELOPMENTS OR OTHERWISE.
| 1 |
Figure is aggregated using compensation disclosure figures contained in summary compensation tables available in proxy statements filed by the Company with the SEC starting in 1995. |
|
| 2 |
See the Company’s proxy statement for the 2016 annual meeting of stockholders, filed with the SEC on November 2, 2016, at 44. |
|
| 3 |
Adam Feuerstein, Immunomedics Sale Hinges on Proxy Battle Over |
|
| 4 |
With holdings of approximately 9.13% of the Company’s shares on a fully-converted basis as of 12/31 based on the press release. |
|
| 5 |
As further detailed in our stockholder presentation dated January |
|
| 6 |
Permission to quote from the ISS and Glass Lewis reports was neither sought nor obtained. Emphases have been added by venBio. |
|
| 7 |
As of the day before the SGEN Agreement was announced, approximately 55% of the proxies submitted were in favor of the election of all of venBio’s nominees. Such proxies are revocable and stockholders can change their voting preferences until the time of the annual meeting and results prior to the meeting may not be the same or similar to the results at the annual meeting. |
|
| 8 |
We believe the$780 implied market capitalization based on the Company’s announced deal terms is woefully small compared to other independent oncology-focused companies that have leveraged their respective crown jewels to achieve market capitalizations in the billions. For example, it was roughly 7% of Tesaro, Inc.’s (Nasdaq: TSRO) market capitalization, 10% of Exelixis, Inc.’s (Nasdaq: EXEL), 25% of Clovis Oncology, Inc.’s (Nasdaq: CLVS), and 30% of Array BioPharma Inc.’s (Nasdaq: ARRY) based on 2/10 share prices. Each of these companies have late-stage or newly commercialized compounds, similar to Immunomedics, though none have the same breadth of utility, in our opinion, making the miniscule deal terms even more galling. |
|
| 9 | Wells Fargo research dated February 17, 2017 | |
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Contacts
Investors
Okapi Partners LLC
Bruce H. Goldfarb / Lydia
Mulyk, 212-297-0720
Toll-free: 855-305-0857
info@okapipartners.com
or
Media
Sloane
& Company
Dan Zacchei / Joe Germani, 212-486-9500
dzacchei@sloanepr.com
/ jgermani@sloanepr.com
Source: venBio Select Advisor LLC
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