Actelion On The Defensive: Corporate Governance White Paper

First, there were just words. Then there was a maiden dividend, the first of regular payouts to shareholders. Now there's a white paper on good corporate governance. Whether or not Elliott Advisors, a new-ish, almost-6% shareholder in Actelion, succeed in their (apparent) mission to force the sale of the company, they've certainly done a good job, it seems, reminding the company of its duties to its shareholders.

We're not taking sides here. Far from it. We dislike short-term, profit-seeking hedge funds just as much as the next (average) man (or woman) who isn't getting part of the spoils. (And Elliott, for the record, claims it's a long-term investor).

But Actelion's responses thus far to Elliott's Feb. 3 public missive, calling for CEO Jean-Paul Clozel and for Chairman Robert Cawthorn to step down from the board, and accusing the Swiss biotech of poor corporate governance, hint that perhaps management wasn't quite doing enough previously to explicitly reassure investors that they do, indeed, consider all the strategic options and judge each in terms of shareholder value, rather than against Clozel's personal, and well-documented, drive for long-term independence.

To the latest defense weapon, then: two dozen slides highlighting the company's super-high corporate governance standards, by Cawthorn.

"Eight out of nine of our board members are independent," shouts the slick slide-deck (Clozel is the odd-man out, which is why Elliott wants him off). We meet regularly and consider input and feedback from shareholders, it says. (We're paraphrasing a little.)

But not content with emphasizing its own (high) standards, Actelion's board is arguing that it's corporate governance is BETTER than your average U.S. standards. Under Swiss law, the full board is called to make more major strategy decisions than is the case for U.S. companies; Swiss companies need shareholder approval for many more actions than their U.S. counterparts, the deck claims, including dividends and issuing new equity.

If that isn't enough, the white paper goes on to essentially remind Elliott and their ilk of the power that they do have, as significant shareholders, over the composition of the board. Firstly, investors owning at least 1.5% can submit proposals for adoption at the AGM. Second, Swiss law allows a majority of voting shareholders to force directors out without cause, giving them "a powerful tool to assure their ongoing satisfaction with the Board." (In the U.S. removing directors requires a supermajority vote in most cases, says the paper).

It seems the corporate governance system is working rather well, then; no doubt Elliott will continue to leverage all the rights granted to it as a large shareholder. The company's May 5 AGM should be an interesting event.

Meantime, Actelion's board will be hoping that enough other investors join Rudolf Maag's camp: the 4.2% shareholder on March 7 became the first to speak out in support of the company's standalone strategy.

image by flickrer Ran Yaniv Hartstein under creative commons

"We ARE Creating Shareholder Value," Argues Actelion's Clozel

Actelion's CEO Jean-Paul Clozel clashed entertainingly with one of the Swiss biotech's biggest (and newest) shareholders during the company's full-year results announcement Feb. 17.

The clash came despite Actelion's management unashamedly using the event to reassure investors that the company DOES have their interests at heart, that it IS creating optimal long-term value and that"to consider a sale at this time [in the company's evolution] would be the worst time imaginable" for existing shareholders.

The context: a Feb. 3 letter from Elliott Advisors, a hedge fund that only months before had become among the largest shareholders. The letter called for Clozel's resignation, accused management of stifling several alleged take-over approaches, thereby denying investors the chance to cash in, and claimed poor corporate governance (CEO on the board; board Chairman a supporter of CEO).

Actelion, we felt, fended off the letter rather well. (It also retorted that "there have been no offers for the company".) But it is surely no coincidence that the company chose today to declare its first ever dividend, the first of regular payouts to its shareholders? And that each member of the management team presaged his talk with a quick big picture sketch to drive home the "we're committed to unlocking shareholder value" message?

"I feel I'm a little closer to my shareholders as a result of this dividend distribution," said Clozel. "It's a way for us to share with our long-term investors what we have been able to build up." CFO Andrew Oakley seemed to suggest it was entirely normal for Actelion to pay a dividend given the company's strong profitability, commercial muscle and its healthy pipeline. "It's a logical step for the company."

This is a company staunchly defending its independence. Fighting off the sharks. It's a company arguing that it has gone through the start-up and build-up phases of a biotech's evolution and is now entering the 'leverage' stage, when it has its pipeline, its infrastructure, its buildings (including a spanking new five-storey steel business center, opened in Dec. 2010), and is now waiting for the rewards to pour in.

As such, to sell out now would "deprive all the employees and loyal shareholders the possibility of sharing in the rewards" that they're due, said Clozel, "for the benefit of a few people wanting to make a quick profit."

This dig at the hedge funds was picked up by a member of Elliott Advisors in the audience -- which is when the real fun began (fun that Actelion management had wanted to avoid, by allegedly barring some hedge funds from the presentation). "We're here for the long-term," the Elliott representative claimed, so don't accuse us of looking for quick gains. After pointing out that there weren't many shareholders in the room (it was an analyst and media event, mind you), he went on to ask about the company's processes for receiving and reviewing takeover approaches (read our letter, said Clozel), about how the company dealt with conflicts of interest generated by Clozel's being on the board (it's very useful and important that management is represented on the board, he said) and ....how the company justified building such an expensive building...when pharma is facing severe regulatory challenges and when shareholders are being asked to finance hundreds of millions in R&D that have led to failures?"

This was getting funny: Clozel, who's built up Europe's most profitable and successful biotech company, was being saddled with all of Big Pharma's productivity woes. And being asked to justify his new business center (it came in "within budget" and "before it went up, Otto [Schwarz, BD and Operations] had been sitting in a container since 2008").

There was more entertainment to come. Did the audience like the building, Clozel asked. (We weren't there, but we gather hands were raised). Who didn't like it? Well, this Elliott guy, surprise surprise. Who was then, in the grand finale to this extraordinary -- public -- exchange between CEO and shareholder, accused of being "the son of Prince Charles." An allusion, we hasten to add, to that British royal family member's well-known disregard for modern architecture.

What about the numbers? Ah, the numbers. Revenues up 13% in local currencies, EBIT up 19% in local currencies, lots about managing the cost base, lots about how wonderfully the shares have done over the long-term...and plenty of reminders about the CHF 800 million share buy-back program, initiated in Nov. 2010.

image by flickr user USFWS Pacific used under a creative commons license.

M&A Predictions! Fortune Tellers -- They Are Not

Even though the New Year has come and gone, analysts are still making their predictions about what 2011 will bring for the pharma and biotech industries. (Admittedly, it is still early enough to do so, but March would have been pushing it.)

The latest endeavor to predict the future comes from the fine analysts at Morningstar, who released their “2011 M&A Outlook for Healthcare” report this week. The report includes some sound, albeit a little obvious, deductions on what will be moving M&A in 2011 – a move into emerging markets, slowing R&D productivity, and (cue ominous music) the upcoming patent cliff.

Morningstar experts expect further consolidation in Big Pharma; and say Eli Lilly & Co., as well as Bristol-Myers Squibb will be ripe for the picking as the patents on their lead drugs reach their expiration date – but, honestly, who would buy them?

Merck & Co. (Schering-Plough), Pfizer Inc. (Wyeth), Roche (Genentech), and Novartis (Alcon)have all made major acquisitions in the past two years that have added significantly to their debt situations and are unlikely to dump the burden of a major restructuring on top of the issues they’ve already had to bear while trying to make these puzzle pieces fit.

Morningstar analyst Damien Conover suggests Abbott Laboratories could handle acquiring either Lilly or Bristol. He also thinks Sanofi-Aventis and GlaxoSmithKline could benefit from an acquisition of Bristol as well. This sounds all well and good, but Glaxo has made it pretty clear that it is not interested in any large acquisitions and Sanofi has its hands full already with that little Genzyme deal it has been drawing out for months. And let’s be honest, if the past has taught us anything, it’s that bigger is not always better.

So moving on to more realistic prospects for mash-ups in 2011 – let’s take a look at what biotechs Morningstar thinks will offer the best bang for the buck.

They list Biogen-Idec, Seattle Genetics, Human Genome Sciences, Dendreon, and Actelion as their top five take-out targets this year. The reasoning is complex but the basic insight is that these companies have strong pipelines or technology in really HOT therapeutic areas like neurology, orphan drugs, and cancer. Yet, Biogen, Celgene, Gilead, and Merck KGaA will offer an acquirer the most immediate and gratifying (think mid-to single-digit billions) boost to earnings – something every Big Pharma could use right now. These companies also have the nice bonus of having a lot of cash on hand and fairly low burn rates.

While all of these companies have their positives and negatives, it’s important to keep in mind that just because they can be acquired doesn’t mean that they will be. Take the #1 takeout target this year for example, Biogen; it’s been on Morningstar’s take-out list for three years now despite plenty attempts by billionaire shareholder Carl Icahn to get the company on the market.

That said; Morningstar hasn’t done abysmally in its predictions over the last two years. Three companies from the 2009 list were acquired – Trubion, CV Therapeutics, and Medarex, but none of these companies were in the top 15 that year. Another seven got picked up from its 2010 list – Crucell, ZymoGenetics, Talecris, King Pharmaceuticals, OSI Pharmaceuticals, Biovail and Genzyme – with three of these companies being in their top 15 picks.

So what do you think – will this be Biogen’s year to find a suitor or will the Massachusetts biotech continue to dance alone?

Image from flickr user What Makes The Pie Shops Tick? used under a creative commons license

Schuler: Not Sold on Selling Elan

At first, investor reaction to Elan's announcement that the drugmaker is looking to sell, merge or concoct some other maneuver was welcome as the stock moved up early today.

But as the day wore on, more shareholders may feel the same as Jack Schuler of Crabtree Partners, which holds about 5 million Elan shares. Schuler, a former Abbott Labs president, last month went public with an angry missive complaining that Elan ceo Kelly Martin is inexperienced and, moreover, a big spender. He called for Martin's ouster and is even more upset after hearing about the new 'strategic' review.

While walking the crowded halls at the JP Morgan conference, Schuler called us and has this to say:

"We are very disappointed and this is exactly what we were fearful of. We want to have a change at the top of the company. We feel the management team, particularly the top people, coming from Merrill Lynch is not the right background for running a company like this. There's a fair amount of arrogance, and very extensive spending.

They believe there is extreme value in the drugs and the Alzheimer's drug has tremendous potential. And Tysabri should be used for most all MS patients when you consider the alternative of not taking it. This management team has totally mismanaged that drug and we're fearful they'll mismanage the Alzheimer's drug. They don't need cash. Their debt is due in 2011 and were close to selling one division for more than $1 billion, and as soon as the credit crisis improves a bit, they'll be able to. And if they cancel the contracts for the planes and cut expenses and Tysabri sales go up, they'll get up there.

We're fearful he'll structure a deal that doesn't require shareholder approval, which he knows he would not get. This not the time to sell the company or give away the rights to your very promising drugs. There's no need to. We're fearful because he's under such pressure to resign he'll try some sort of desperate move like this. This is not the guy to be negotiating anything right now. We really are appealing to the board to take control of this company and put people in charge who have experience in pharmaceutical business, particularly marketing."

We'll have more on Elan in the next issue of The Pink Sheet DAILY...--Ed Silverman

Deerfield to Nitromed: Not So Fast, Not So Cheap

A few weeks ago we asked aloud why the investors in a public shell company would benefit from a reverse merger with a privately held biotech company.

Today, Deerfield Management--a 12% stakeholder in Nitromed--said it decided it would definitely not benefit from Nitromed's decision to become a public shell for Archemix by divesting its only asset of consequence, the combination heart failure drug Bidil. Our Pink Sheet Daily coverage of that reverse merger deal is here.

And Deerfield has a solution: it will buy Nitromed itself, for $0.50 per share, what Deerfield figures Nitromed would be worth if it sold off Bidil as planned and wound down the company and distributed the cash to shareholders. By Deerfield's calculations that's approximately 100% above the price of NitroMed's shares prior to the announcement of the Bidil asset sale and a 200% premium to the shares' closing price on December 3rd. (See left, click to enlarge.)

Deerfield Managing Partner James Flynn's letter noted that Deerfield has always remained a passive investor during its 15-year history, and not one to "wage contentious public debates." But:

"Unfortunately, the decisions of the NitroMed Board have placed us in the untenable position of neither being able to sell our shares at a reasonable price, nor receiving any value for the company's assets which are being entirely divested. Instead, the Board has determined to sell all of the BiDil assets and apply the proceeds of that sale, together with existing cash balances, for the benefit of a company that will be 70% owned by shareholders of Archemix."

Flynn goes on to note that Archemix, as a company whose lead asset is in Phase I, would have to break the mold for Deerfield and other Nitromed investors to benefit.

"NitroMed shareholders have been allotted a scant 30% of the combined company in exchange for NitroMed's cash, implying a value for Archemix of approximately $100 million. There are virtually no examples of public biotechnology companies with only Phase I data which have a comparable economic value today. In fact, we believe that in the current financing environment a majority of these companies have negative enterprise values. Even looking at biotechnology companies with credible products in Phase III development targeting large markets and retaining full economics, a high percentage have economic values lower than that proposed for Archemix."

After our post a few weeks ago we spoke with a variety of people about the up- and down-sides to reverse mergers from all perspectives--the private biotech, it's investors, and the public shell investors. Let's focus on the latter group--we think there is consensus on why private biotechs and their backers go after these deals (recall that Replidyne had more than 120 suitors for its cash and Nasdaq listing).

Flynn notes in his letter the basic argument against: significant dilution now, next to zero liquidity now and post-merger, and near-certain further significant dilution down the road when more cash is needed to push Archemix's projects through the clinic.

He also notes potential conflicts of interest:

"The person conducting the negotiations had the choice of losing his job if shares of NitroMed were sold or to become the CEO of a new company if a transaction were structured to keep the cash in the company. And, we understand, several members of the NitroMed Board have economic interests in Archemix."

Well, then.

But what about the upside? Archemix is certainly a well-funded and well-managed firm that in most markets would likely have pulled off its attempted IPO; it boasts near-exclusive access to therapeutic aptamers, a technology platform with potential to combine the best features of small molecules and antibody therapeutics; Nitromed shareholders--most of them--mightn't have had the opportunity to invest in Archemix, a private company, at any price without a reverse merger deal. One observer put that last point to us this way: "When I put my money into a company, I don’t put it in saying ‘if that asset fails, i want my money back’ ... if I invest in the management and the assets, then I’m willing to take their recommendation, they have access to more deals than I do."

Deerfield apparently sees things differently and is ready to cut its losses in a once-promising investment. Despite its better efficacy in African American patients, BiDil has proved a commercial disappointment; in late October, the company announced it had sold the business to JHP Pharmaceuticals for $24.5 million in cash and additional payments for product inventory, setting up essentially a Nasdaq-traded cash shell ripe for a reverse merger. Competition for NitroMed's estimated $35 to $40 million in cash was reportedly fierce, but Archemix ultimately won the day.

If Deerfield has its way, what next for Archemix? The company has raised $105 million from SV Life Sciences, Prospect Venture Partners and Atlas Venture and others since foundation in 2001 and has a variety of strategic alliances with the likes of Merck-Serono, Takeda and Lilly. It will probably have about $20 million without NitroMed's dowry.

Could it raise more cash privately? Probably, but the dilution would be tough to swallow. Another shell? The clock is ticking.

Deals of the Week: It's All in the Spin

Spin control is the operative phrase in pharma land this week. Merck PR again worked overtime, trying to put the 1200 job cuts announced Monday in a positive light. It's all part of the company's "Plan to Win" strategy, said Kenneth Frazier, the company's president of Global Human Health in a press release. (For an alternate viewpoint, check out this poem written by a Merck employee who sadly has a little too much time on his or her hands. Hat tip: Pharma Marketing Blog.) At least this time the company opted not to leak the news in a PowerPoint presentation. That's how some Merck natural products researchers found out about their early retirement according to C&EN. Meanwhile, Merck's partner in...Vytorin, Schering has its hands full regarding news that the Department of Justice--via federal prosecutors in unspecified U.S. Attorneys’ offices--is investigating the company.

We've also got to give Ken Johnson, a PhRMA VP, his due. The gentleman rose to the industry's defense in advance of Thursday's Congressional hearing concerning direct-to-consumer ads with this stirring tribute in the WSJ: consumer advertising for prescription drugs "brings patients into their doctors' offices and helps start important doctor-patient conversations about conditions that might otherwise go undiagnosed or untreated." (So that's why Robert Jarvik was skulling (er, is it shilling?) for Pfizer.)

Meanwhile, you can bet Amgen's PR team didn't thank CEO Kevin Sharer when he responded to angry shareholders with this comment uttered at Wednesday's Westlake, CA meeting: "I felt real economic pain." (Personally, this blogger would love to say that she took a 29% cut in pay from her 2006 salary and still managed to bring home more than $13 million.)

Are you looking for a different spin on the industry's news? We bring you this edition of:

Enzon/Icahn: Carl Icahn (for oh, yes I can) finally got his way--at least regarding Enzon. A few months back, Icahn upped his stake in the New Jersey-based pharma to almost 7% and quickly started making noises about a possible sale or spin-out. This week comes news that Enzon will be spinning out its biotechnology business into a new public entity that has yet to be named. (Our suggestion: Celian Inc., after Carl of course. It's got a nice ring to it--and its subtle too.) Enzon will gift the newco with $150 million of funding, expected to cover two to three years of research, and Enzon's pegylation and Locked Nucleic Acid (LNA--via Santaris) drug delivery technologies. Jeffrey Buchalter, Enzon's current CEO, will take the reins of the start-up, while Craig Tooman, currently CFO, will move up to the top spot at Enzon. Tooman's slimmed down Enzon retains rights to four marketed products (Abelcet, Adagen, DepoCyt, and Oncaspar), rights to current PEG royalty revenues, and a manufacturing facility in Indianapolis. The news isn't all that surprising--Carl can be a persuasive guy (unless you are Biogen Idec). In addition, Enzon was very much at a point in its life cycle where it was appealing to two very different kinds of investors--those who appreciate the stability and earnings provided by its marketed products and those drawn to the potential of its risky drug delivery/discovery capabilities. We're not sure which camp Icahn belongs to (we're guessing the former), but it's safe to say that lately investors haven't viewed drug delivery too kindly. Last December, David Steinberg told START UP: "The old model of drug delivery is completely broken down. To be successful you have to think far more innovatively." Maybe with this split Buchalter's newco will have the luxury of serving just one shareholder master.

Stiefel Laboratories/ABR: On Tuesday, Duluth, Ga.-based Stiefel announced it was acquiring the shares of two French companies, ABR Invent and ABR development, which make the dermal filler Atlean. Financial terms of the deal weren't disclosed. "Stiefel Laboratories has been looking for the right dermal filler to add to our aesthetic portfolio for quite some time," said Charles W. Stiefel, chairman and CEO, Stiefel Laboratories in a press release. ABR's Atlean consists of tricalcium phosphate particles suspended in a hyaluronic acid (HA) gel. As we reported in this March 2008 Medtech Insight Report, HA is the active component in all of the most popular fillers, including Restylane and Juvderm. Recent advances in HA filler technology--especially the introduction of highly cross-linked HA products that are more durable, easier to handle, and provide immediate cosmetic results without the need for pre-injection allergy skin testing--have resulted in rapid market adoption of these products. Even though sales over the next three years are expected to slow thanks to the sluggish US economy, analysts still predict the annual market for dermal fillers could reach $950 million by 2010. Oh, and we'd be remiss if we didn't mention this acquisition probably wouldn't have been possible without the $500 million in walking around money that Blackstone Group supplied to Stiefel last August.

NuVasive/Osiris Therapeutics: Spinal company Nuvasive announced late Thursday that it was acquiring Osiris' Osteocel biologics business for $35 million in cash upon close of the deal, and milestones worth up to $50 million, which are payable in cash or a combination of cash and stock. For its money, NuVasive gets a proprietary adult stem cell bone graft product derived from mesenchymal stem cells, as well as a processing facility to boost capacity. NuVasive said in a press release that it expects Osteocel revenues to jump from $15 million in 2008 to $25 million in 2009 and that the purchase will have no impact on Nuvasive's EPS, excluding an in-process R&D charge. NuVasive went public in 2004; since then it has acquired a nucleus disc replacement product, AMI Holdings' Neodisc, and a biomaterials platform from Radius Medical LLC. Two years ago, we speculated about Osiris' potential transformation into a orthopedics company. Osteocel was a big part of Osiris initial success. Because the MSC product is labeled as human tissue for transplant, it didn't have to go through clinical trials, making its path to mrket very straightforward. This helped pave the way for the company's 2006 IPO, which raised $35.8 million. Seems likely that Osiris will use the money from this most recent deal to fund ongoing Phase III clinical trials of its Prochymal product for graft vs host disease. In addition to the NuVasive deal, Osiris also announced Thursday that it has been given regulatory clearance to initiate an expanded access treatment program for Prochymal that makes the investigational stem cell product available to children with life-threatening GvHD.

Pfizer/NicOx: It was a bad news/good news kind of week for French spec pharma NicOx, which specializes in reprofiling existing drugs by grafting nitric oxide onto them. On May 6, partner Pfizer announced it would not advance PF-03187207, an experimental glaucoma therapy, into Phase III trials based on lackluster clinical data. Shares of NicOx tumbled 38% as a result. The "spinnable" news? Pfizer might consider continued development of the drug for potential registration in Asia, depending on the results of an on-going Phase II trial in Japan. In addition, despite the set-back with PF-03187207, Pfizer said it remains "commited to our joint program with NicOx, where the follow-up compounds...have produced encouraging results." It's worth remembering that the two companies have collaborated since 2004. In 2006, they significantly broadened their relationship when Pfizer agreed to pay nearly $30 million up-front and more than $350 million in milestones for exclusive, across the board rights to NicOx's technology in ophthalmology. NicOX's tumbing share price could put pressure on its execs to ink a deal for the company's still unpartnered Phase III Naproxcinod, a nitric oxide–donating form of naproxen. Analysts have hailed that compound as as a blockbuster alternative to the blighted Cox-2s. (For more, check out this February IN VIVO piece.)

(Image courtesy of Flickr user ilmungo through a Creative Commons license.)

Carl Icahn vs. Evil Corporate Governance

Don’t get us wrong. We think corporate governance, as a general, rule, stinks. We never understood how Pfizer could have gotten itself into the position of paying Hank McKinnell $180 million in retirement benefits – the man who presided over the deletion of tens of billions in the company’s market value.

Or, in an act of proportionately greater idiocy, how the board of Cell Therapeutics, that reliably subpar performer, could in 2006 pay its CEO James Bianco some $1.1 million in cash (and a ton of underperforming stock) along with, among other perks, $220,000 in the use of chartered aircraft.

Chancellor, Sith School of Corporate Governance

The charters must have been some compensation for the loss of Air Cell Therapeutics (the corporate jet) – which the board, in a short-lived fit of financial responsibility – sold at the end of 2005.

So philosophically we’re on board with Carl Icahn’s idea of taking lax corporate governance to task in his new blog (http://icahnreport.com/), still post-less as of this morning. "I may do something to finally focus on more than making money," Icahn told Dow Jones.

We’re sure Carl gives generously to all sorts of charitable organizations (there are, after all, the Carl C. Icahn Foundation and The Icahn Charitable Foundation). But forgive us for a certain skepticism re. icahnreport. Oh, we’re sure those widows and orphans will benefit as board members get religion and really start corporately governing. And we’re also sure that when they do, our economy will just pull itself up by its bootstraps instead of whining for more bailouts.

But we also figure that the more Carl can whip up support for board-bashing, the more likely he’ll be to get additional board seats at Biogen Idec. Then, with that malign group finally paying attention to the shareholders, they'll finally force the deal to allow Carl to off-load his Biogen shares.

He bought them, remember, figuring that Big Pharmas had such poor corporate governance that they'd be begging like dogs at the Thanksgiving table to overpay for an acquisition. (For our take on that ongoing affair, see here and here).

They didn’t? Hmm. Maybe there is some real corporate governance out there after all.

Northwest Under the Hammer

Surprise! The lawyers are out to get Northwest Biotherapeutics—on behalf of their disgruntled shareholders—for the “materially false and misleading statements” issued in that July 9 press release.

Northwest, or their comms department, definitely messed up—we blogged the dodgy release and its subsequent clarification here, and claim no prizes for predicting that something like this would happen. This is not a case of suing McDonalds for serving hot coffee—the lawyers, for once, have a reasonable point. Northwest declared that the world’s first therapeutic cancer vaccine was available to patients. It wasn’t. The experimental substance was allowed into Switzerland—conditionally.

Acting on behalf of “defrauded investors,” law firms like Hagens Berman Sobol Shapiro can see good business in the inherently risky, volatile biotech sector. They’re slapping suits about everywhere, it seems, including recently on GPC Biotech and Dendreon, allegedly for misleading investors over their cancer candidate’s progress.

Blaming the management is not always justifiable—especially at young firms trying to get their first drug through the FDA maze. Stuff can go wrong in drug development; investors not ready for that should choose another sector.

Trouble is, the Northwest saga will mean yet more lawsuits, and probably make these actions even more part of the biotech landscape than they already are. That doesn’t seem the best way to encourage transparent communication between management and regulators, and management and their investors.