Bioenvision Update: Merger Foe Stops Blogging After Genzyme Subpoena; Board Battle Continues
Faced by a wide-ranging subpoena from Genzyme (GENZ), individual Bioenvision shareholder Adam Shay, whose website and blog helped galvanize opposition to the Cambridge company’s merger plans with New York-based Bioenvison (BIVN), has stopped his commentary and will no longer update his site.
Shay’s site, www.rejectgenzymetenderoffer.com, will apparently remain live, at least for the time being. We have not been able to track down Shay. But a from-the-heart last post by the North Carolina resident, clearly upset over Genzyme’s tactics, lays out the situation. Here are some excerpts:
“Genzyme is known for hardball negotiating tactics when acquiring small biotech companies. However, I never realized the extent to which they are willing to go to quash dissension. Someone had the entry on Wikipedia about the attempted Genzyme takeover of Bioenvision removed. They are now trying to get a court deposition and subpoena served on myself. For what purpose I do not know—I am just an individual shareholder that has been blogging on publicly available information…
“At the end of the day it doesn’t come down to how much money you have. It comes down to right and wrong and how that all sorts out with the man upstairs. Communicating that Bioenvision is prepared to go it alone by raising additional funds and then selling out at an artificially deflated price is one of the many wrongs that has taken place during this past year…
“For all my supporters and fellow shareholders I say stand strong. Stand up for what you believe in, regardless of how tough the odds might seem. Success is always achievable when you truly believe in your cause and yourself.”
Uh, Genzyme, good tactic. That will definitely help your public image. Genzyme’s wide-ranging request—some might say fishing expedition or intimidation effort—seeks all Shay’s documents and communications regarding the tender offer, which was soundly rejected by shareholders. This includes Shay’s interactions with Bioenvison, SCO Capital, the leading minority shareholder opposed to the deal, and all members of the media. That would be us, too—since we’ve had a fair amount of interaction with Shay.
The subpoena was filed on July 12, but apparently first revealed this week by blogger Ed Silverman of Pharmalot. Pharmalot has also posted a copy of the subpoena.
The information sought from Shay involves a lawsuit—filed against Genzyme, Bioenvision, and Bioenvision board members, among others—to which Shay is not a party. Silverman speculated that Genzyme was trying to see if there was a connection between Shay and SCO Capital, something Shay has denied. We reached SCO president Jeffrey Davis on vacation yesterday. “We’re not connected with Shay, we’re not connected with anybody,” he told us.
Genzyme has said it will continue pressing for the merger, and will take its case to shareholders later in the year. A spokesman who was looking into the Shay matter this morning did not get back to us before we posted.
This is not the only lawsuit related to the attempted takeover. As far as we can tell, at least five class action suits have been brought against Bioenvision and Genzyme in this matter, including several filed in the last two weeks. You can find two here and here and press releases about the latest three here, here, and here.
On another front, SCO has made waves recently by asserting its claims to two Bioenvision board spots, calling for a management overhaul, and seeking to revoke Genzyme’s rights to the leukemia drug clofarabine. Genzyme countered that it has assurances from Bioenvision that SCO has no board rights.
Davis, who previously served on the Bioenvision board but stepped down in 2004, said yesterday that SCO’s rights to the director seats pre-date Genzyme’s involvement in the matter. “When I resigned from the board we reserved all our rights to put those people back on the board,” he says. “They never came to use when they announced this merger and asked us to wave those rights or anything like that. So our view is we still have those rights.”
Davis is clearly frustrated with Bioenvision, which he says has not returned SCO’s phone calls. “I find it incredible that the Bioenvision board of directors has their largest common shareholder [actually, now the second-largest shareholder, after Genzyme] calling them and they don’t return the call.”