Sarissa Capital Management LP has filed a lawsuit as part of its plans to nominate a slate of directors to the board of Innoviva Inc., according to a letter to shareholders by Innoviva.
Innoviva deemed the proxy fight "unnecessary and distracting" and called the litigation "costly and frivolous," adding that the activist investor took this step without making a serious attempt to engage constructively with the board or management.
The activist investor responded in a statement that Innoviva rebuffed its attempts to have an active dialogue with independent directors and, in the middle of discussions, filed proxy materials rejecting all of Sarissa's nominees and claimed incorrectly that Sarissa wanted to take control of the board.
Sarissa said it does not seek control of the board but "much needed stockholder representation" with a minority slate of three nominees.
In addition, Sarissa does not believe Innoviva's claim that its "marketing and executive leadership play a critical role" in the growth of revenue for the respiratory products commercialized by GlaxoSmithKline PLC. It added that the company admitted in a 10-K filing that "We have no control over GSK's marketing and sales efforts."
The activist investor, however, agrees with Innoviva that after a sluggish launch of products by GSK, GSK has dramatically improved its commercial efforts.
Innoviva has urged stockholders to vote for its own slate of nominees at the annual meeting scheduled for April 20, while Sarissa urged investors to vote in favor of its slate.