Activist investor calls for board shakeup at Assertio, threatens proxy contest

An investor in Chicago-area pharmaceutical company Assertio Holdings is calling on the small drugmaker to shake up its board and has threatened a proxy battle if changes aren’t made.

Buxton Helmsley Group, a New York investment fund manager with a roughly 1% stake in Lake Forest, IL-based Assertio, said the commercial drugmaker’s board is “unfit to serve,” according to a letter reviewed by Endpoints News. The investor called for the ouster of four board members: chairman Peter Staple, Heather Mason, William McKee and Jeffrey Vacirca.

Brendan O’Grady

In May, BHG urged stockholders to vote against the directors, called out the lack of analyst coverage of the company and suggested the board explore a possible sale, among other complaints. A few weeks later, Assertio named a new CEO, Brendan O’Grady, who joined from Glenmark Pharmaceuticals after prior roles at Amwell and Teva Pharmaceuticals.

Activist cases against biopharma companies are few and far between. The number of campaigns in the broader healthcare field has slid in the past year. Bloomberg tallied 37 in the first half of 2024, a 30% year-over-year drop.

BHG also claimed that Assertio’s board was lacking in its due diligence of last year’s $248 million takeover of Spectrum Pharmaceuticals.

Assertio lined up the deal a few months after Spectrum’s lung cancer drug was rejected by the FDA and about 75% of its R&D staff were laid off. Spectrum is also involved in multiple class action lawsuits alleging its former leaders made false or misleading statements about its business and prospects of FDA approval.

Alexander Parker

The board should have investigated whistleblower complaints, BHG senior managing director Alexander Parker wrote in the letter. In its May statement, BHG proposed Parker as a new board director for Assertio. At the time, BHG said it also gave a list of six other “highly qualified candidates” to the board. It didn’t name the six people.

Assertio’s commercial portfolio includes oral suspension medicines, suppositories, a nasal spray, oxycodone tablets and others, and has said it expects sales this year of $110 million to $125 million. Its stock $ASRT is up about 53% year-to-date, but down about 69% over the past 12 months.

BHG also recently called out consumer brand Fossil Group. Shortly after, Fossil’s CEO stepped down and changes were made to the board.