Design Cells/iStock by way of Getty Photos
Replace 2:35pm: Provides firm remark.
2seventy Bio (NASDAQ:TSVT) rose 6.5% amid a push from activist investor Engine Capital for a board refresh and the appointment of its chief working officer as CEO of the most cancers remedy developer.
Engine Capital, which has a 3% stake in 2seventy (TSVT), desires the corporate to focus solely on its Abecma drug and instantly stop to monetize all growth applications, in accordance with a letter the investor wrote to the board on Wednesday. The activist additionally desires the corporate to right away cut back company overhead, appoint COO Chip Baird as CEO and “sever ties” with CEO Nick Leschly.
“In conclusion, 2seventy’s worth creation alternative is important, however the Board should act with a way of urgency to cease the money burn, shield the stability sheet and the underlying worth of Abecma,” Engine Capital Managing Companion Arnaud Ajdler wrote within the letter. “Except the Board takes drastic measures alongside the traces we urge on this letter, we consider the corporate will possible be bankrupt in a few years.”
Engine Capital additionally desires a shareholder consultant to be added to the board and for the corporate to ascertain a particular committee of impartial administrators to speak instantly with shareholders and monetize the Firm’s pipeline.
2seventy Bio (TSVT) responded to the Engine Capital letter in an announcement on Wednesday.
“As we indicated final month, the Board has commenced a course of to contemplate all choices to maximise worth,” 2seventy Bio mentioned within the assertion. “This course of is properly underway and our crew is dedicated to working as thoughtfully and shortly as potential to make sure our vital therapies develop into obtainable to sufferers in want, we drive worth for our shareholders and finest assist our staff.”
The activist letter comes after 2seventy Bio (TSVT) introduced in September that Leschly will step down from his present function as CEO and take up the place of chairman. Baird, who was CFO, was promoted to COO. The corporate additionally mentioned that it’s going to minimize down 40% of its workforce and internally advance fewer pipeline applications in a bid to chop down prices.
2seventy bio (TSVT) did not instantly reply to Looking for Alpha e mail request for remark. TSVT has brief curiosity of 29%.