DEAL REPORTER
Ariad Pharmaceuticals (NASDAQ:ARIA) and activist investor Sarissa Capital Management are in active discussions to end a proxy fight, two people familiar with the situation said.
If an agreement is reached, it could be announced as soon as next week, they said. A settlement may include a timetable for the retirement of longtime Ariad CEO Harvey Berger, which Sarissa has demanded, the people said.
Because the talks are fluid, however, the people cautioned that there was still a possibility that the parties could fail to reach an agreement.
Greenwich, Connecticut-based Sarissa is the largest shareholder in Ariad, with a 6.85% stake. The fund is led by former Icahn Capital and Viking Global Investors portfolio manager Alex Denner, who was appointed to the Ariad board in February of last year.
Last February, Sarissa announced it would nominate three directors for Ariad’s board and that it would seek the “imminent retirement” of Berger, who has served as chairman and CEO since 1991. It also said that “any potential settlement of a potential proxy contest must include the CEO’s retirement”.
Ariad and Sarissa representatives declined to comment.
Should no agreement be reached, Sarissa will pursue its plan to run a slate of three directors for the Ariad board at its annual general meeting in coming months, said one of the people.
Sarissa’s candidates include Richard Mulligan, a Sarissa co-founder, Anna Protopapas, a former Millennium Pharmaceuticals executive, and Bernhard Ehmer, the CEO of Biotest (XETRA:BIO). They are being put forth as alternatives to CEO Berger and two others.
Cambridge, Massachusetts-based Ariad sells Iclusig, a treatment for chronic myeloid leukemia, and it is developing drugs to treat cancer and other diseases.
The company, which has a market value of USD 1.8bn, suffered a blow in October 2013 when Iclusig was pulled from the US market by the FDA for several months to change prescribing information. Its shares fell that month from USD 18.22 to as low as USD 2.20. They were trading at USD 9.78 on Friday.