Elan chief hits back at dissident shareholders
IRISH BIOTECH group Elan yesterday went on the attack against rebel shareholders.
Just hours after securing an injunction in the High Court to stop two dissident directors running an “unauthorised” parallel investigation into corporate governance at Elan, chief executive Kelly Martin posted a letter to shareholders on its website.
Identifying Dane Ib Sonderby in particular, Mr Martin accused him of “deliberately spreading misinformation” and making false allegations. He also said Mr Sonderby, who has claimed the board was ignoring issues raised by him, has failed to take up several offers of a meeting with directors.
Since July, Mr Sonderby, who runs investment firm Zoar Invest and controls about 0.3 per cent of Elan’s stock, has run a campaign against the company’s corporate governance via a website saveelan.com. A number of specific issues have been raised.
The issues raised are:
- alleged conflicts of interest in the sale of painkiller Prialt to Azur Pharma, where a number of Elan directors own shares. Those accused by Mr Sonderby included Davy deputy chairman and Elan chairman Kyran McLaughlin;
- an alleged “sweetheart” deal in a licensing agreement with Amarin, specifically alleging a conflict of interest by Elan chief financial officer Shane Cooke, whose brother works with Amarin;
- questions about Mr Martin’s involvement in hedge fund Kinsale Capital Management while chief executive officer of Elan;
- concern over “change of control” provisions in the deal where Johnson Johnson took a major stake in Elan and control of its bapineuzumab Alzheimer’s programme, and
- anger at the scale of the financial penalty imposed on Elan as part of settlement into alleged marketing irregularities of epileptic seizures therapy Zonegran several years ago.
The allegations are separately the subject of an internal “independent” investigation of corporate governance commissioned by Elan, which is being carried out by Bill Ide of McKenna, Long Aldridge and which is due to report to a board meeting next Wednesday.
Mr Martin noted that Mr Ide was a former chairman of the American Bar Association.
Mr Martin said he had been asked by shareholders to “set the record straight”. In his letter, he dismissed all the allegations, noting that any “conflicted” directors had no involvement in the transactions at issue.
He said the JJ deal provision were industry standard and that Elan was far from alone in facing heavy penalties in inquiries on marketing practices. In relation to Kinsale, Mr Martin said Mr Sonderby was simply incorrect on his involvement in the firm.
Mr Kelly said Elan would “not hesitate to continue to set the record straight when necessary as it relates to false allegations”.