TMCnet News
venBio Sends Letter to Immunomedics StockholdersvenBio Select Advisor LLC ("venBio"), the beneficial owner of approximately 9.5 million shares, or 9.0%, 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 February 16, 2017. The full text of the letter follows: [January 11, 2017] Dear Fellow Stockholders: New York-based venBio Select Advisor LLC is the SEC (News - Alert) registered investment manager for venBio's public markets strategy focused on the biotechnology sector. Our fund aims to invest in disruptive innovative assets, often through capital infusion into companies in order to advance important novel therapies from development through commercialization. We believe that the Board of Directors and management of Immunomedics have failed to advance the best interests of its stockholders. In particular, we are extremely disappointed with the Company's failure to form a strategic partnership to bring to market IMMU-132, a promising and much needed drug candidate for treating triple negative breast cancer, which we believe may have led to a destruction of stockholder value over the past year and a half. Furthermore, we believe that poor corporate governance and a lack of Board independence arising from the husband-wife team of Board Chairman and Chief Scientific Officer (CSO) Dr. David Goldenberg and CEO Cynthia Sullivan's outsized presence on what was a five person Board have contributed to a string of failures and missteps at the Company, which are discussed below. We believe that the Company's recently announced Board and leadership changes are too little, too late, and do not adequately address these concerns. Over the past year and a half, we have engaged extensively with Immunomedics, offering constructive solutions to improve the Company's shortcomings, unlock stockholder value, and advance the development of the IMMU-132 drug. In our view, there has been a lack of significant progress made to correct what ails the Company, which includes its inability to move into Phase 3 testing of IMMU-132. We believe that the flurry of recent press releases highlighting incremental news and, most recently, the nomination of new director candidates, from Immunomedics has been driven by defensiveness in the face of our public criticisms. We urge stockholders not to fall for Immunomedics' blatant attempt to distract from the lack of true progress at the Company. Clearly, change is needed urgently to right the course of Immunomedics. This is why we are nominating four highly-qualified candidates for election to the Board. Our candidates have the necessary pharmaceutical development background and breast cancer expertise, commercial manufacturing and regulatory expertise, management skills, pharmaceutical partnering/deal making and capital markets know-how to successfully lead the Company forward and drive the advancement of the IMMU-132 drug, which will enhance stockholder value and restore stockholder confidence. Our case for change at venBio is based on the following core arguments: 1) The Board has Overseen Rampant Destruction of Stockholder Value
2) Immunomedics Has Failed to Form a Strategic Partnership to Bring the IMMU-132 Drug to Market and Monetize its Pipeline The Company has failed to deliver on its promise of signing a partnership or licensing agreement to move IMMU-132, a drug candidate for treating triple negative breast cancer (a deadly disease for which no targeted therapies currently exist), through clinical development. This has prohibited the necessary clinical trials that would allow patients to benefit from this treatment.
3) The Company Has Failed to Maintain Good Corporate Governance The Company's husband-wife CEO-CSO team until recently occupied 40% of its Board seats and the Chairmanship of the Board, severely limiting the ability of the Board to exercise independent oversight over management. Although this is slated to change per the Company's recent announcement, their hasty maneuvers to adjust the Board are, in our view, simply a calculated minimal response to our criticisms, and not reflective of any newfound devotion to good corporate governance. The Board's failure to implement any necessary changes prior to our criticism demonstrates its inability to confront the challenges faced by the Company. Even though Dr. Goldenberg owns a larger stake in the Company's subsidiaries than in the Company itself, the Board apparently finds it acceptable to allow Dr. Goldenberg to allocate ownership of new intellectual property between the Company and its subsidiaries that he owns. We believe that Dr. Goldenberg and Ms. Sullivan, as members of both management and the Board, bear responsibility for the Company's strategic missteps that have led to a significant decline stockholder value. In addition, we believe the misaligned compensation structures that have been put in place for Dr. Goldenberg and Ms. Sullivan have led to the enrichment of both executives without a corresponding increase in stockholder value:
Management missteps along with concerning behavior throughout this contested proxy process leave us concerned about management's ability to act in the best interests of stockholders. In addition, the Company has repeatedly misled investors and mismanaged its cash balance.
4) venBio's Highly-Qualified Board Nominees have the Requisite Experience and Skill Set Needed to Transform Immunomedics; The Company's Nominees Do Not We have for years observed Immunomedics and analyzed its deficiencies. Based on this, we believe that the following core competencies and areas of expertise are essential qualities that any potential Board must collectively possess if Immunomedics is to embark on the path of creating true stockholder value:
While we are still evaluating Immunomedics' recent additions to the Board, our initial impression is that their candidates do not fulfill the requirements above because collectively they do not have the comprehensive experience in these areas. The focus of the Company's major asset pertains to a complex therapeutic treatment with breast cancer, an area where venBio's nominees are better positioned to oversee based on our experience and knowledge. Additionally, we are concerned with the Company nominees' lack of relevant experience in signing a strategic partnership with a large pharmaceutical company, which is a main corporate objective of the Company to advance the progress of IMMU-132. It's critical that the Company is ideally represented to execute on the most valuable strategic relationship, as well as be appropriately positioned for the period thereafter, ensuring continued success of the Company. The Company will not have a second chance to put in the right Board and leadership. venBio's nominees were brought together with thought to address the current and future needs of the Company in comparison to the Company's slate which we believe was patched together in an attempt to quickly and ineffectively react to the pressure we have placed on the Company. We believe that our slate of highly-qualified candidates possess each of the essential qualities we listed above and collectively fit these needs, which will provide the change necessary to accelerate the advancement of drug candidates, namely IMMU-132, that address unmet medical needs and to unlock value for our fellow stockholders, guiding the Company through a critical time of growth, and restoring the investment community's confidence in the Immunomedics Board. In addition, venBio has a strong advisory network that our nominees will use as a resource if they join the Board. This network includes Dr. Richard Heyman, co-founder and Chief Executive Officer of Aragon Pharmaceuticals, which focused on androgen receptor signaling inhibitors for the treatment of prostate cancer and was acquired by Johnson & Johnson in 2013, and Seragon Pharmaceuticals, which focused on Selective Estrogen Receptor Degraders (SERDs) for the treatment of breast cancer. venBio's nominees for the Immunomedics Board of Directors include:
At this critical juncture in the acceleration of IMMU-32, your vote is critical to curbing the tide of missteps and strategic failures at Immunomedics. We urge you to support our four highly-qualified Board nominees, who have the skills and experience necessary to turn around the Company and build lasting value for you, its stockholders. Vote FOR all four of our Nominees on the GOLD Proxy Card Today. Sincerely, Dr. Behzad Aghazadeh 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 [email protected]. 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 1 Press Release: Immunomedics Provides Update on Triple-Negative Breast Cancer Presentation at ASCO (Jun. 3, 2016), available at https://globenewswire.com/news-release/2016/06/03/845992/0/en/Immunomedics-Provides-Update-on-Triple-Negative-Breast-Cancer-Presentation-at-ASCO.html. See also Adam Feurstein, Immunomedics Kicked Out of Prestigious ASCO Cancer Conference, THE STREET (Jun. 3, 2016), available at https://www.thestreet.com/story/13594991/1/immunomedics-kicked-out-of-prestigious-asco-cancer-conference.html. 2 See the Company's proxy statement for the 2016 annual meeting of stockholders, filed with the SEC on November 2, 2016, at 50-51. 3 Id. at 44. 4 Id. View source version on businesswire.com: http://www.businesswire.com/news/home/20170111005636/en/ |