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Move on Immunomedics board puts Seattle Genetics deal in doubt

Four venBio candidates voted to the board which gives group a majority

Seattle Genetics

An acrimonious battle between the current management of Immunomedics and activist investor group venBio came to a head on Friday after shareholders elected all four of the latter's candidates to the board.

Long-suffering investors voted venBio head Dr Behzad Aghazadeh and three other candidates to the board (Scott Canute, Peter Barton Hutt and Dr Khalid Islam) effectively giving the rebels a majority and punishing Immunomedics for failing to bring any products to market in its 35-year history.

Aghazadeh said the vote reflected a "groundswell of support, following the endorsements of the three leading proxy advisory firms … [which] will pave the way for fresh, independent perspectives at the board level, and will ensure that stockholders’ interests are strongly represented".

venBio holds 9.9% of Immunomedics and launched its campaign in the build-up to the company's recent deal to license worldwide rights to its candidate drug for triple negative breast cancer, sacituzumab govitecan (IMMU-132), to Seattle Genetics.

venBio has made no secret of the fact it wants to keep IMMU-132 in-house, describing the Seattle Genetics license a couple of weeks ago as a "rushed deal that does not deliver fair value to shareholders".

Immunomedics stands to get $250m upfront from the Seattle Genetics deal and up to $2bn in milestones for rights to the drug, which is currently in a phase I/II trial in TNBC and - if positive - could form the basis for a filing under the FDA's accelerated approval regulations. The FDA previously granted the drug a breakthrough therapy designation for the treatment of patients with TNBC who have failed prior therapies for metastatic disease.

The group has also accused Immunomedics chief executive Cynthia Sullivan and her husband David Goldenberg - the biotech's chief scientific officer - of putting personal profit ahead of the interests of the company and its shareholders.

Ahead of Friday's vote, Immunomedics - which has been trying to fight the venBio challenge in the courts - issued a statement saying it had offered to immediately appoint all four of venBio's nominees, agree to the resignation of current vice chairman Jason Aryeh (who was due to become chairman on June 30) and continue a search for a new CEO.

On Friday it vowed to continue to "pursue legally justified relief against venBio … for their unlawful proxy fight that continues to violate a myriad of federal securities laws".

Article by
Phil Taylor

7th March 2017

From: Regulatory

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