Dive Brief:
- Bristol-Myers Squibb announced Tuesday morning it has added three new independent members to its board of directors.
- The additions include former Bausch & Lomb CFO Robert Bertolini, ex-Vertex Pharmaceuticals CEO Matt Emmens and Ted Samuels, who has a long history in the financial sector.
- Bristol-Myers also entered into an accelerated share repurchase program to buy back $2 billion worth of the company's common stock.
Dive Insight:
As part of the shake-up, the board will temporarily be expanded to 14 seats, but only 11 seats will be up for re-election at the annual meeting in May. Former CEO and current board chairman Lamberto Andreotti will step down as planned.
The moves come after an activist investor has been building shares in the company. JANA Partners took a stake in Bristol-Myers in the fourth quarter of 2016 and now holds approximately 3.9 million shares, less than 1% of the drugmaker's outstanding common stock.
"These three new independent directors will add valuable industry knowledge and fresh perspectives to the Board, and shareholders stand to reap a substantial benefit from the company's sizable investment in its undervalued shares," said Barry Rosenstein, founder and managing partner of JANA.
Bristol said in a statement that it has been in "discussions with representatives of JANA to better understand their views."
These developments come on the heels of speculation that Bristol-Myers is being considered a takeout target by its larger pharma counterparts like Pfizer, Johnson & Johnson, Sanofi and Novartis.
Bristol-Myers, previously the fourth largest pharma, has hit setbacks with its crown jewel — the immuno-oncology treatment Opdivo. After failing in first-line lung cancer, prospects for the drug were trimmed dramatically. Since then, Bristol-Myers has cut its guidance and its shares have fallen, dropping more than 15% over the last year.
While Bristol-Myers isn’t the company it was a year ago, it still has a market cap of $90 billion and a strong portfolio of oncology products.
The new Board members could be what the company needs to fend off an acquirer, or just maybe, Bristol is setting itself up for a takeout.