Activist investors challenging the management of Immunomedics have reportedly won control of a majority of the seats on the drug developer’s board of directors, putting another hurdle in front of a deal to license the company’s lead drug to Seattle Genetics.
Biotech investment fund venBio—Immunomedics’ (NASDAQ: IMMU) largest shareholder, with a 9.9 percent stake in the Morris Plains, NJ-based company—said that preliminary shareholder vote totals from the company’s annual meeting Friday show that the directors it supported were “overwhelmingly elected.” VenBio has been openly critical of CEO Cynthia Sullivan, and her husband and Immunomedics chief scientific officer David Goldenberg, alleging that the two have enriched themselves at shareholder expense.
VenBio has also been critical of Immunomedics’ deal to license sacituzumab govitecan, a drug that the company has been studying as a potential treatment for triple negative breast cancer. Bothell, WA-based Seattle Genetics (NASDAQ: SGEN) would pay $250 million up front in exchange for global rights to sell the Immunomedics drug, if it gets approved. In a letter sent to shareholders last month, venBio characterized the agreement as a “rushed deal that does not deliver fair value.” The firm also contended that the SeaGen deal was an attempt to sway shareholders before the proxy vote.
Immunomedics has been trying to fight the venBio challenge in court, characterizing the proxy fight as “unlawful” and a violation of federal securities laws. The company contends that venBio is the one interfering in the voting process. In a securities filing, Immunomedics said that venBio plans to retain the Immunomedics drug to develop and market in-house, a strategy that the company calls a “high-risk agenda.”
In its letter to shareholders, venBio said that a new board of directors would have the chance to fully evaluate the SeaGen deal before it closes.