Activist Julian Singer Girds for Catalyst Biosciences Fight, Will Run Director Slate
Singer started his fight in March, and wants the company to return all cash to shareholders
Activist investor Julian Singer ramped up his campaign against biotech firm Catalyst Biosciences (US:CBIO) last week, telling the company and investors it's unable to settle differences and running its slate of directors at the 2022 company annual meeting.
Singer and his group, JDS1, filed their definitive proxy statement on July 19 with The US Securities and Exchange Commission for the annual meeting schedule, led for Aug. 15, and began mailing them to investors on July 21.
The activist nominated a short slate of three directors to the eight-member board, Shelly Lombard, Matthew Stecker, and Igor Volshteyn.
Singer said he updated the company on its plans in March and updated in April and June.
Singer's latest proxy statement disclosed that JDS1 representatives held settlement talks with the company that failed to resolve their differences.
A last-ditch, July 21 effort to resolve the matter also failed to resolve issues, including
"While such discussions did not result in any consensus being reached at such time as to a settlement framework, JDS1 anticipates having further discussions with the company. JDS1 cannot predict whether any future discussions with the company will result in any settlement being reached that will avoid a proxy contest at the 2022 Annual Meeting."
JDS1 said, therefore, that until something changes or they settle the dispute, it would continue to proceed with its proxy contest.
JDS1 owns approximately 8.4% of the outstanding common stock of Catalyst
Singer said in a news release last week, contrary to Catalyst's public statements. "Our agenda in pursuing this proxy contest is very clear. We are pursuing this proxy contest principally to ensure that the Catalyst Board takes timely if not immediate, action to distribute the maximum amount of its available cash to ALL stockholders."
And he took issue with what he called Catalyst's public statement that it plans to return "as much as" $65 million in cash to stockholders, with the total amount to be distributed dependent upon "several factors. "
Singer's letter echoed the ones that his father, fellow activist Paul Singer, who runs Elliott Management, one of the most significant funds involved in activism.
Singer the younger blasted management for recent stock performance, telling shareholders that Catalyst's stock fell about 95% from its Feb. 2018 high of $35.60 in February 2018, and by roughly 78% since its closing price of $8.32 on July 22, 2019, when JDS1 first contacted the company to explore strategic alternatives.
"During the 16-year tenure of Dr. Usman on the Board and as Chief Executive Officer, we are not aware of a single drug that has been commercialized at Catalyst. Yet, in 2021, Dr. Usman was awarded and paid more than $1.2 million in total compensation, while, during that same year, stockholders saw the value of their shares plummet by approximately 86%," Singer wrote.
He added that his group had suffered enough and urged the company to take immediate action to lift the share price by returning as much cash as possible to shareholders.
"With limited drug development projects and only a handful of employees remaining, Catalyst should explain to stockholders why it needs all the cash it currently holds," Singer concluded.