Sarissa Capital has sent a cautionary note warning that misleading statements have been made by Innoviva Inc (NASDAQ:INVA). The opinion of Sarissa Capital is that the misleading statements are deliberately being made with a view to misinforming shareholders on the matter concerning Glass Lewis and ISS, the corporate governance and proxy voting firms.
According to Sarissa Capital, one of the ways that Innoviva is trying to mislead is by juxtaposing comments about Glass Lewis and ISS with its own recommendations as to for who the shareholders should cast their vote. Innoviva does this without being clear as to who is making such an indication and, in the process, obscuring matters.
Sarissa Capital has also noted that this is not the first time that Innoviva has set out to mislead by listing several instances in the past. This included the claims that Innoviva had made in the past that Sarissa Capital was planning a boardroom coup though it was a false accusation since Sarissa Capital was only out to get minority control.
Secondly, Innoviva had claimed that cost-cutting measures initiated by Dr. Denner at Enzon had led to destruction of value. This was false since the decline in revenues at Enzon was due to the fact that some royalties have expired and the drugs which earn the company royalties have also suffered from falling usage. What the board actually did was to reduce expenses and ensure that shareholders were earning more from the royalty revenues rather than the management benefitting disproportionately.
Innoviva had also accused Sarissa Capital of not reaching out with a view to engaging constructively. This is false as Sarissa Capital has made the initiative but its attempts have been rebuffed by the non-executive directors of Innoviva.
As evidence of the poor corporate governance at Innoviva, Sarissa has quoted Glass Lewis and ISS as having observed that transparency was lacking at Innoviva and that Innoviva’s response to the concerns raised by Sarissa had been selectively structured. Consequently, Sarissa Capital is urging shareholders to help bring change by voting.
On Monday shares of Innoviva Inc rose by 4.37% to close the day at $14.22.