Puma Biotechnology Inc · NASDAQ:PBYI
Puma Biotechnology — Proxy Contest (November 2015)
46 slides from Puma Biotechnology's proxy contest presentation, Nov 30, 2015
Slide 1: Schedule 14A - Puma Biotechnology, Inc.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 14A (Rule 14a–101) INFORMATION REQUIRED IN CONSENT STATEMENT SCHEDULE 14A INFORMATION Consent Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant ¨ Filed by a Party other t
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Slide 3: Participants' consent solicitation and ISS presentation notice
Dr. Fredric N. Eshelman, James M. Daly, Seth A. Rudnick, and Kenneth B. Lee, Jr. (collectively, the “Participants”), filed a definitive consent statement and accompanying form of consent card with the Securities and Exchange Commission to be used in the solicitation of written consents from the stoc
Slide 4: Puma Biotechnology, Inc. Consent Solicitation
PUMA BIOTECHNOLOGY, INC. CONSENT SOLICITATION Information for Investors November 2015
Slide 5: Certain Disclosures
Certain Disclosures DR. FREDRIC N. ESHELMAN (“DR. ESHELMAN”) DOES NOT ASSUME RESPONSIBILITY FOR INVESTMENT DECISIONS. THIS PRESENTATION DOES NOT RECOMMEND THE PURCHASEOR SALEOF ANY SECURITY.UNDERNO CIRCUMSTANCESISTHISPRESENTATION TO BEUSEDOR CONSIDEREDASAN OFFERTO SELLOR A SOLICITATIONOF AN OFFER TO
Slide 6: Fredric N. Eshelman, Pharm.D.
Fredric N. Eshelman, Pharm.D. Founder of Eshelman Ventures, LLC, an investment company primarily focused on healthcare companies. Non-Executive Chairman of The Medicines Company, a global biopharmaceutical company focused on saving lives, alleviating suffering and contributing to the economics of he
Slide 7: Background Of Investment
Background Of Investment • Between May 18, 2015 and June 4, 2015, I purchased a total of 150,000 shares of Puma’s common stock. • Between October 22, 2015 and November 3, 2015, I acquired options to purchase 150,000 shares of Puma’s common stock. • As a result of these transactions, I am the benefic
Slide 8: Company Overview
Company Overview Puma Biotechnology, Inc. (NYSE: PBYI) (“Puma” or the “Company”), a Delaware corporation and development stage biopharmaceutical company, focuses on the acquisition, development and commercialization of products for the treatment of various forms of cancer. • Headquarters: Los Angele
Slide 9: Company Overview
Company Overview Single Drug Candidate Neratinib/PB272 (oral): treatment of breast cancer patients, non- small cell lung cancer patients, and patients with HER2 mutation- positive solid tumors. • Puma is scheduled to present three-year data from the ExteNET trial of neratinib on December 11, 2015 at
Slide 10: Why Am I Soliciting Consents?
Why Am I Soliciting Consents? • Board and management practices are reducing stockholder value. o Stock price underperformance relative to the biotechnology industry and the Company’s closest peers over the most recent six-month and one-year periods. Stockholders have been whipsawed in both direction
Slide 11: Consent Solicitation Overview
Consent Solicitation Overview 8
Slide 12: Consent Solicitation Goals
Consent Solicitation Goals • Increase the size of Puma’s board from five to nine directors. • Elect four highly qualified and experienced directors. • No incumbent directors will be replaced. • The Nominees will each add unique expertise and experience to ensure a successful strategy for navigating
Slide 13: Consent Solicitation Proposals
Consent Solicitation Proposals • Proposal 1: Repeal Amendments to the Bylaws o Adoption of Proposal 1 will ensure that the current board cannot (i) prevent or impair the stockholders’ ability to add the Nominees to the Board or (ii) limit the Nominees’ ability to take actions in the best interests o
Slide 14: Dramatic Stock Price Underperformance
Dramatic Stock Price Underperformance Puma shares have significantly underperformed the S&P 500 and NYSE Arca Biotechnology Index. Preliminary Consent Solicitation Filed Dr. Eshelman Initial Investment While the Company has performed generally in line with peers since its IPO in 2012 and outperforme
Slide 15: Dramatic Stock Price Underperformance
Dramatic Stock Price Underperformance Puma has also significantly underperformed its closest peer companies. Source: Capital IQ 12
Slide 16: History of Problematic Statements: Background
History of Problematic Statements: Background ExteNET Trial Description • Started by Pfizer Inc. in April 2009. • Enrolled 2,821 patients in 41 countries. • Double-blind, placebo-controlled, Phase III trial of neratinib vs. placebo after adjuvant treatment with trastuzumab (“Herceptin”) in women wit
Slide 17: History of Problematic Statements: Background
History of Problematic Statements: Background ExteNET Results Presented to Date • Two-year disease free survival (“DFS”) 93.9% neratinib, 91.6% placebo. • In approximately 60.0% of patients for whom there was a centrally-confirmed HER2 result available, the numbers were 94.7% and 90.6% respectively.
Slide 18: History of Problematic Statements: Optimistic Statements by Puma
History of Problematic Statements: Optimistic Statements by Puma Beginning on July 22, 2014, and continuing until as late as May 7, 2015, Puma claimed that the ExteNET data would show that neratinib significantly improves results in breast cancer patients over a placebo. “The results of the trial “M
Slide 19: History of Problematic Statements: Clinical Trial Data Inconsistent With Expectations
History of Problematic Statements: Clinical Trial Data Inconsistent With Expectations Between May 13, 2015 and June 1, 2015, Puma released additional ExteNET data, which was presented at the American Society of Clinical Onocology (“ASCO”) annual meeting. The newly released ExteNET data did not meet
Slide 20: History of Problematic Statements: Clinical Trial Data Inconsistent With Expectations
History of Problematic Statements: Clinical Trial Data Inconsistent With Expectations While the Company continued to tout the success of the ExteNET Trial at the June 2015 ASCO meeting, significant portions of the analyst, investor, and medical communities saw the data and clearly disagreed. Puma’s
Slide 21: History of Problematic Statements: Regulatory Plan and Cancer Indication
History of Problematic Statements: Regulatory Plan and Cancer Indication Management has a history of mismanaging market expectations. • For example, Puma stated on several occasions, including as late as November 13, 2014, that it would file a new drug application (“NDA”) for neratinib during the fi
Slide 22: History of Problematic Statements: Other Trials
History of Problematic Statements: Other Trials The Company held a conference call on December 23, 2013 to discuss HER2 mutation trials. • We have tried to locate the transcript but have been unable to do so. As far as we can tell, the transcript seems to be missing and unavailable. However, accordi
Slide 23: History of Problematic Statements: Public Disclosures & Drug Development Process
History of Problematic Statements: Public Disclosures & Drug Development Process Clinical Trials • Diarrhea problem evident in early PFE data—why no protocol amendments for loparemide prophylaxis? • Equivocating on the extent of data to be presented in December 2015 on ExteNET and other trials. Publ
Slide 24: M&A Speculation
M&A Speculation There has been speculation regarding M&A for quite some time. Analystshave also commented: Cowen 5/5/15: “..[F]uture stock performance appears increasingly dependent on M&A, an outcome we have little visibility on.” “Puma management has acknowledged that a sale of the company may be
Slide 25: Stockholder Discontent
Stockholder Discontent The Company’s problematic statements have already led some stockholders to take legal action. • A stockholder class action complaint was filed on June 3, 2015 in the U.S. District Court for the Central District of California against Puma, Alan Auerbach and Charles Eyler. • In
Slide 26: History of Problematic Statements: Impact On Puma's Stock Price
History of Problematic Statements: Impact On Puma’s Stock Price “Puma Biotechnology Inc. soared after the company yesterday reported positive trial results for its breast cancer drug… Puma shares almost quadrupled…” -Bloomberg, July 23, 2014 • July 22, 2014 closing price: $59.03. Following market cl
Slide 27: History of Problematic Statements: Soaring Stock Price & Effect On Executive Compensation
History of Problematic Statements: Soaring Stock Price & Effect On Executive Compensation Chairman, President and CEO Alan Auerbach and SVP Finance and Administration and Treasurer Charles Eyler were each rewarded with generous cash and stock bonuses for 2014. Auerbach: Eyler: • $300,000 cash bonus
Slide 28: Stockholder Unfriendly Executive Compensation
Stockholder Unfriendly Executive Compensation The Company’s overall executive compensation program is excessive, is not aligned with shareholder interests, and does not reflect best practices. Puma’s executive and director compensation levels are excessive. • Alan Auerbach’s total annual compensatio
Slide 29: Stockholder Unfriendly Executive Compensation
Stockholder Unfriendly Executive Compensation Executive compensation practices that are not consistent with best practices and investor expectations. • Puma only provides its stockholders with an opportunity to vote on its executive compensation program once every three years (triennial say-on-pay).
Slide 30: Failure to Respond to 220 Demand
Failure to Respond to 220 Demand Puma’s current board and management are not sufficiently committed to transparent disclosure or responsive to legitimate stockholder concerns. • In July 2015, I exercised my right as a stockholder under DGCL Section 220 to request copies of the Company’s board minute
Slide 31: Value Proposition
Value Proposition
Slide 32: Value Proposition
Value Proposition Puma shares still offer investors a value proposition. • ExteNET Trial results: Supposed to present three-year (and hopefully four-year) data in December 2015. According to Company CEO they expect widening of curve separation (more survival effect) with three-four-year data. Drugs
Slide 33: Potential Downside That Needs to Be Addressed
Potential Downside That Needs to Be Addressed • Questions about the approvability of neratinib for extended adjuvant: o Clinical effect not large in light of high incidence of diarrhea. o Protocol modified several times. o 40% diarrhea in treatment group raises issue of ascertainment bias. o Only 61
Slide 34: Our Plan to Improve Transparency
Our Plan to Improve Transparency The Nominees will work with management to improve transparency and manage street and investor expectations, specifically by providing greater clarity with respect to the following issues: • Assure full disclosure of ExteNET data (safety/efficacy, primary and subgroup
Slide 35: Business Initiatives Nominees Plan to Pursue
Business Initiatives Nominees Plan to Pursue The Nominees have outlined a set of business initiatives that address the following areas that they have identified as critical to their oversight function and a value-maximizing strategy: 1. Regulatory, Clinical and R&D Plan 2. Commercial/Competitive Sit
Slide 36: Minority Slate of Highly Qualified Nominees
Minority Slate of Highly Qualified Nominees 33
Slide 37: Highly Qualified Slate of Nominees
Highly Qualified Slate of Nominees The Nominees have the experience and expertise to help guide Puma down the complicated path to a successful launch of neratinib: • Highly qualified with excellent, relevant track records and significant experience, comparing favorably with current directors. • Prov
Slide 38: Optimal Board Size: Nine is Fine
Optimal Board Size: Nine is Fine Puma’s current board would have you believe that a five member board “is appropriate for effectively governing the Company” and that the board’s current size “provides for efficient decision-making.” Puma’s claims contradict best practices and industry norms: Best Pr
Slide 39: Current Board's Lack Of Experience
Current Board’s Lack Of Experience Puma claims that the current board members “posses a well diversified range of experience” and the current board “has the experience necessary to guide the Company through the next stages of its development.” • The current board has limited public company corporate
Slide 40: Nominee Experience
Nominee Experience Puma claims that the Nominees “provide no additional experience or expertise.” In fact, the Nominees will add extensive expertise that the current board lacks: Drug Development and Regulatory Current Board Nominees Auerbach’s experience Three Nominees have extensive development ex
Slide 41: Nominee Experience
Nominee Experience Investment Current Board Nominees Only one current board Three Nominees have significant investment experience focused on breakthrough and early stage member has significant companies, at funds with a venture capital model. investment experience. • Dr. Eshelman: Founder of Eshelma
Slide 42: Nominee Fredric N. Eshelman, Pharm.D.
NOMINEE FREDRIC N. ESHELMAN, PHARM.D. CAREER HIGHLIGHTS Age: 66 Founder of Eshelman Ventures, LLC, an investment company primarily focused on healthcare companies. Non-Executive Chairman of The Medicines Company, a global biopharmaceutical company focused on saving lives, alleviating suffering and c
Slide 43: Nominee James M. Daly
NOMINEE JAMES M. DALY CAREER HIGHLIGHTS Age: 53 Mr. Daly served as Executive Vice President and Chief Commercial Officer at Incyte Corporation, a biopharmaceutical company, from October 2012 until June 2015. Mr. Daly has served as one of Chimerix Inc’s directors since 2014. Prior to joining Incyte,
Slide 44: Nominee Seth A. Rudnick, M.D.
NOMINEE SETH A. RUDNICK, M.D. CAREER HIGHLIGHTS Age: 66 Dr. Seth Rudnick has been venture partner and previously general partner at Canaan Partners, a venture capital firm, since 1998, from which he is now retired. Formerly, Dr. Rudnick was the Chief Executive Officer and Chairman of CytoTherapeutic
Slide 45: Nominee Kenneth B. Lee, Jr.
NOMINEE KENNETH B. LEE, JR. CAREER HIGHLIGHTS Age: 67 Managing member of Hatteras BioCapital, LLC and the general partner of Hatteras BioCapital Fund, L.P., a venture capital fund focusing on life sciences companies. Mr. Lee most recently served as managing director of the firm’s Health Sciences Cor
Slide 46: Contact
Contact Legal Inquiries: Cadwalader, Wickersham & Taft LLP Richard Brand (212) 504-5757 richard.brand@cwt.com Investor Inquiries: Okapi Partners LLC Bruce Goldfarb/ Pat McHugh/ Lydia Mulyk (212) 297-0720 or (877) 869-0171 info@okapipartners.com Media Inquiries: Finsbury Kal Goldberg/ Chuck Nathan /