By Svea Herbst-Bayliss
NEW YORK (Reuters) – Caligan Partners is urging Anika Therapeutics to consider strategic alternatives including a full sale and is preparing to nominate directors to the biotech company’s board, according to a letter to the board which was seen by Reuters.
Caligan Partners owns a roughly 4% stake in Anika and is ratcheting up the pressure to protest an underperforming stock price and losses at the company’s joint preservation segment.
“Anika may be better positioned as a private company or as part of a larger organization,” Caligan’s managing partner, David Johnson, wrote to the board.
Anika’s osteoarthritis knee pain relief injection treatments would be attractive to other companies and could be worth almost $60 per share, Johnson wrote. That would be nearly double Friday’s closing stock price of $30.57.
For the last five months Caligan has tried to engage constructively with Anika’s board to discuss ways to boost the share price which has dropped 41% over the last five years, the letter said.
But the two sides have reached an impasse and Johnson wrote that the directors were unwilling to consider alternatives to unlock more value for shareholders.
A representative for the company was not immediately available for comment.
“We believe that in conjunction with a review of Anika’s strategic options, fresh perspectives are needed,” the letter said. “Anika needs new directors on its Board.”
Johnson did not identify his director candidates or say how many he plans to nominate to Anika’s seven-person board, where two members will stand for re-election this year.
Anika is best known for its viscosupplement portfolio, including Monovisc and Orthovisc, which is marketed by Johnson & Johnson. The viscosupplement market is expected to grow strongly in the coming years, boosted by increased demand for non-surgical treatments.
But Anika’s joint preservation segment, which it acquired in 2020, is a drag on profitability, the letter said.
Caligan also expressed concern at management’s decision in March 2022 to withdraw financial targets it had announced less than a year earlier, a move that caused the stock price to tumble 14% the following day.
Management also cut its initial guidance every year in the joint preservation segment since acquiring Arthosurface and Parcus in 2020, further hurting its credibility with investors, Johnson wrote.
Caligan, which specializes in health-care investing, last nominated a slate of directors in September 2019 at AMAG Pharmaceuticals where it quickly settled for two board seats. Within a year of the settlement, AMAG had replaced its chief executive officer, rationalized operating expenses and was bought by Covis Pharma in late 2020.
(Reporting by Svea Herbst-Bayliss; Editing by Chris Reese)
