Aurinia Pharmaceuticals has initiated a strategic review after MKT Capital called on the Canadian drugmaker to do so. The company also parted ways with two directors who were voted out by shareholders in May following a withhold campaign by MKT.
Aurinia tapped advisors to help it explore strategic alternatives, including a sale, the company said in a statement last Thursday. The stock jumped more than 13% Friday but pared most of the gains by the closing bell.
Aurinia’s move came three weeks after 4.2% activist shareholder MKT said it believed the ‘‘best risk-adjusted path forward’’ for Aurinia was a strategic review process and that a ‘‘large number’’ of shareholders would ‘‘strongly favor a sale of the business at the right price.’’
In that statement, MKT also criticized Aurinia for not formally ejecting Chairman George Milne and Compensation Committee Chair Joseph Hagan from the board, despite two weeks having passed since the two received less than majority support from shareholders at the May 17 meeting, triggering their resignations under the company’s majority voting policy. MKT threatened to call a special meeting to push for a broader board overhaul.
Aurinia’s board accepted the resignations Milne and Hagan last week, when it also said it had retained a talent firm to assist in the search for two new directors.
In a press release following the announcement, MKT applauded the move, which it attributed to its pressure on the company.
“Now that the Board has finally accepted the resignations of two influential directors following our successful withhold campaign, Aurinia should invite investor input on who will fill the vacancies,” the activist stated.
Aurinia shares were quoted just below $10 each as of 11.07 a.m. EDT Monday, giving the company a market value of $1.42 billion.