(Reuters) – Hedge fund Elliott Management on Tuesday publicly called on Alexion Pharmaceuticals Inc to sell itself, arguing that management’s steps, including recent plans to acquire a smaller company, were leading in the wrong direction.
“The best approach for the Company and its stakeholders is the immediate exploration of a sale,” Elliott Associates wrote to Alexion’s board and its chief executive officer. “The current strategy is unlikely to restore the market’s perceptions of Alexion’s attractiveness and uniqueness,” the letter said.
Elliott, which manages roughly $40 billion and is one of the world’s most powerful activist investors, said it has been watching and waiting for months for CEO Ludwig Hantson’s “go-it-alone” approach to gain traction and is speaking out now after he announced plans to buy Portola Pharmaceuticals Inc (PTLA.O).
A spokeswoman for Alexion declined to comment.
Until now, Elliott and Alexion have held private discussions and this is the second time that the hedge fund has publicly pushed the company for a sale. Alexion in December acknowledged Elliott’s suggestions but said it rejected them.
Since then, the company has been on an acquisition spree, seeking to diversify its research pipeline, deals the hedge fund criticized in the letter.
Investors reacted negatively to the Portola announcement, made last week, by erasing approximately $1.7 billion from the Alexion’s market capitalization in a single day. According to Refinitiv data, it is currently valued at $22 billion and its stock price has dropped 6% since January.
“Such a disproportionate decline in a company’s share price is the sign of much deeper concerns regarding a company’s perceived strategy,” Elliott said in the letter.
Elliott pointed to other missteps, including the purchase of Achillion Pharmaceuticals for $930 million, as the company tries to diversify its revenue base away from its bestselling drugs for rare blood disorders. It also cited an unexpected and unexplained departure of Paul Clancy, a former chief financial officer, as worrying investors.
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Home » Analysis & Comment » Activist investor Elliott pushes Alexion Pharma to sell itself
Activist investor Elliott pushes Alexion Pharma to sell itself
(Reuters) – Hedge fund Elliott Management on Tuesday publicly called on Alexion Pharmaceuticals Inc to sell itself, arguing that management’s steps, including recent plans to acquire a smaller company, were leading in the wrong direction.
“The best approach for the Company and its stakeholders is the immediate exploration of a sale,” Elliott Associates wrote to Alexion’s board and its chief executive officer. “The current strategy is unlikely to restore the market’s perceptions of Alexion’s attractiveness and uniqueness,” the letter said.
Elliott, which manages roughly $40 billion and is one of the world’s most powerful activist investors, said it has been watching and waiting for months for CEO Ludwig Hantson’s “go-it-alone” approach to gain traction and is speaking out now after he announced plans to buy Portola Pharmaceuticals Inc (PTLA.O).
A spokeswoman for Alexion declined to comment.
Until now, Elliott and Alexion have held private discussions and this is the second time that the hedge fund has publicly pushed the company for a sale. Alexion in December acknowledged Elliott’s suggestions but said it rejected them.
Since then, the company has been on an acquisition spree, seeking to diversify its research pipeline, deals the hedge fund criticized in the letter.
Investors reacted negatively to the Portola announcement, made last week, by erasing approximately $1.7 billion from the Alexion’s market capitalization in a single day. According to Refinitiv data, it is currently valued at $22 billion and its stock price has dropped 6% since January.
“Such a disproportionate decline in a company’s share price is the sign of much deeper concerns regarding a company’s perceived strategy,” Elliott said in the letter.
Elliott pointed to other missteps, including the purchase of Achillion Pharmaceuticals for $930 million, as the company tries to diversify its revenue base away from its bestselling drugs for rare blood disorders. It also cited an unexpected and unexplained departure of Paul Clancy, a former chief financial officer, as worrying investors.
Source: Read Full Article