Innoviva, Inc. · NASDAQ:INVA
Innoviva — Proxy Contest (April 2017)
20 slides from Innoviva's proxy contest presentation, Apr 12, 2017
Slide 1: Innoviva Investor Presentation
Innoviva Investor Presentation April 12, 2017
Slide 2: Special note regarding this presentation
Special note regarding this presentation ON MARCH 22, 2017, SARISSA CAPITAL MANAGEMENT LP ("SARISSA"), TOGETHER WITH THE OTHER PARTICIPANTS IN SARISSA'S PROXY SOLICITATION (THE "PARTICIPANTS"), FILED A DEFINITIVE PROXY STATEMENT AND ACCOMPANYING GOLD PROXY CARD WITH THE SECURITIES AND EXCHANGE COMMI
Slide 3: Summary
Summary Sarissa believes that Innoviva’s directors Barbara Duncan, Catherine J. Friedman, Patrick G. LePore, Paul A. Pepe, James L. Tyree and William H. Waltrip have breached their fiduciary duties by (1) overpaying their executives and (2) overpaying themselves
Slide 4: Innoviva does not market or sell any drugs; it just collects royalty payments
INNOVIVA DOES NOT MARKET OR SELL ANY DRUGS. IT JUST COLLECTS ROYALTY PAYMENTS. SO WHY IS INNOVIVA’S SPENDING AND COMPENSATION SO EXORBITANT? IT IS TIME FOR INNOVIVA TO BE OPTIMIZED FOR SHAREHOLDERS
Slide 5: Biospecifics Technologies currently collects royalties on 1 drug
Biospecifics Technologies Corp. currently collects royalties on 1 drug... Total compensation of Principal Executive Officer in 2015 à $354K DEF 14A filed April 2016 Biospecifics Technologies collects royalties on its injectable collagenase, marketed as XIAFLEX® by Endo International plc. Biospecific
Slide 6: Enzon Pharmaceuticals currently collects royalties on drugs
Enzon Pharmaceuticals currently collects royalties on 4 drugs… Total compensation of Principle Executive Officer in 2015 à $40K Enzon Pharmaceuticals, Inc. receives royalty revenues from existing licensing arrangements with other companies primarily related to sales of four marketed drug products, n
Slide 7: Innoviva currently collects royalties on drugs
Innoviva currently collects royalties on 2 drugs… Total compensation of CEO in 2015 à $3.6 million Innoviva’s current business is focused on collecting royalties from two respiratory inhalers sold and marketed by GSK ~10x the amount paid at Biospecifics; ~90x the amount paid at Enzon DEF 14A filed M
Slide 8: Directors failing to uphold fiduciary duties by paying the CEO excessive multiples
We believe the directors of Innoviva are failing to uphold their fiduciary duties by paying the CEO excessive multiples of what CEOs at other companies that simply collect royalties are paid Non-executive directors at Innoviva Barbara Duncan Catherine J. Friedman Patrick G. LePore Paul A. Pepe James
Slide 9: Biospecifics Technologies median director compensation
Biospecifics Technologies Corp. currently collects royalties on 1 drug... Median compensation of directors in 2015 à $68K DEF 14A filed April 2016 Biospecifics Technologies collects royalties on its injectable collagenase, marketed as XIAFLEX® by Endo International plc. Biospecifics Technologies is
Slide 10: Enzon Pharmaceuticals median director compensation
Enzon Pharmaceuticals currently collects royalties on 4 drugs… Median compensation of directors in 2015 à $35K Enzon Pharmaceuticals, Inc. receives royalty revenues from existing licensing arrangements with other companies primarily related to sales of four marketed drug products, namely, PegIntron
Slide 11: Innoviva median director compensation
Innoviva currently collects royalties on 2 drugs… Median compensation of directors in 2015 à $330K Innoviva’s current business is focused on collecting royalties from two respiratory inhalers sold and marketed by GSK ~5x the amount paid at Biospecifics; ~9x the amount paid at Enzon DEF 14A filed Mar
Slide 12: Even more remarkable: director pay versus Theravance Biopharma
Even more remarkable… in 2015 the median compensation of directors at Innoviva was >$100K higher than Theravance Biopharma, the company that it spun off in 2014 that has a real operating business! Non-executive director Total compensation (2015) Eran Broshy 163,641 Henrietta H. Fore 193,293 Robert V
Slide 13: Directors failing to uphold fiduciary duties by paying themselves multiples
We believe the directors at Innoviva are failing to uphold their fiduciary duties by paying themselves multiples of what directors at other companies that simply collect royalties are paid Non-executive directors at Innoviva Barbara Duncan Catherine J. Friedman Patrick G. LePore Paul A. Pepe James L
Slide 14: Comparing compensation to companies of similar size is misguided
Note, comparing compensation at Innoviva to other companies of similar size by revenue or market cap is misguided Unlike other companies in its peer group by size: Innoviva does not sell or market drugs! Innoviva does not engage in any real R&D! We believe these are critical points to understanding
Slide 15: Concern that Innoviva will squander future royalty revenues
In light of Innoviva’s excessive spending, including egregious compensation of management and directors Sarissa is gravely concerned that Innoviva will squander future royalty revenues on M&A (management has already expressed a desire to “build over time a recurring revenue business”)1, additional o
Slide 16: Concern about imprudent acquisitions
Sarissa is particularly concerned that Innoviva will waste shareholder money on imprudent acquisitions Sarissa believes shareholders should not be confident that the current board and management team will make the right capital allocation decisions Sarissa is fearful that any imprudent acquisitions
Slide 17: Innoviva does not market or sell any drugs; it just collects royalty payments
INNOVIVA DOES NOT MARKET OR SELL ANY DRUGS. IT JUST COLLECTS ROYALTY PAYMENTS. SO WHY IS INNOVIVA’S SPENDING AND COMPENSATION SO EXORBITANT? IT IS TIME FOR INNOVIVA TO BE OPTIMIZED FOR SHAREHOLDERS
Slide 18: ISS, Glass Lewis and Egan-Jones recommend voting the GOLD proxy card
ISS, Glass Lewis and Egan-Jones all recommend that Innoviva shareholders vote on Sarissa’s GOLD PROXY CARD ISS and Egan-Jones recommend all three Sarissa nominees and Glass Lewis recommends two Sarissa nominees All three recommend shareholders vote AGAINST Innoviva’s executive compensation All three
Slide 19: We urge you to vote the GOLD proxy card
We urge you to VOTE THE GOLD PROXY CARD Time is of the essence. We urge you to VOTE THE GOLD PROXY CARD to help us fix the problems at Innoviva. If you want to follow the recommendations of ISS, Glass Lewis and Egan-Jones and vote for Sarissa nominees YOU MUST VOTE ON THE GOLD CARD AND YOU CANNOT VO
Slide 20: To be continued...
To be continued... SARISSA CAPITAL