London-based investment bank Elliott Advisors wrote a letter to Alexion Pharmaceuticals criticizing its plan to acquire of San Francisco-based biotechnology company Portola and urging Alexion to put itself up for sale.
The May 12 letter detailed the deals's negative impact on shareholder value and return, highlighting that about $1.7 billion was lost from Alexion's market capitalization in a single day, and its enterprise value multiple has decreased more than 75 percent since 2015. Elliott Investors further condemned the deal by noting that Portola has no chronic rare-disease exposure, which is at the center of Alexion's focus.
The investor also wrote that Portola's primary product, reversal agent AndexXa, shows little overlap with most of Alexion's products. The deal, which is underway, pushes Alexion into a hospital-based product during the pandemic, which has rapidly decreased hospital admission.
Elliott Advisors expressed its lack of confidence in Alexion's executive team since the sudden and unexplained departure of former CFO Paul Clancy.
"The current executive team has struggled to find its footing, and the Board has struggled to provide any satisfactory answers for the disappointing results. For investors, the frustration is palpable," Elliott Advisors wrote.
The investor endorsed the possibility of Alexion offering itself up for sale, calling the prospect "the most viable pathway forward to solve its prolonged market issues and deliver an optimal outcome to all with a stake in Alexion’s future."
Read the full letter here.