U.S. contract drugmaker Catalent has agreed to appoint four new board members, including Elliott Investment Management’s Steven Barg, and launch a strategic review in a settlement deal with the activist hedge fund.
Steven Barg, a former Goldman Sachs banker who is now global head of engagement at Elliott, will serve on a newly created board committee, tasked with reviewing Catalent’s business, strategy, operations and capital-allocation priorities, the company said in a press release Tuesday morning.
The three other new directors – also included in the cooperation agreement between Catalent and Elliott – are former Pfizer finance chief Frank D’Amelio, former Genzyme executive Stephanie Okey and Michelle Ryan, who spent nearly 30 years at Johnson & Johnson, including seven as treasurer.
Ryan will serve alongside Barg on the review panel, which will be led by Catalent’s newly named executive chairman, John Greisch – a board member since 2018 – the statement reads.
In exchange, Elliott has agreed to standstill, voting, confidentiality and other provisions, including that it will keep its Catalent stake below 10%, and economic exposure below 15%. The four fresh directors are expected to feature on a 12-member slate for the upcoming board elections.
‘‘We believe the changes announced today…represent critical steps toward ensuring that Catalent reaches its full potential,’’ commented Elliott Senior Portfolio Manager Marc Steinberg. He added that the activist fund sees Catalent as a key player in the biopharmaceutical industry’ due to its ‘‘global scale and market-leading development and manufacturing capabilities.’’
The settlement comes a little over a month after rumors surfaced Elliott was preparing for a proxy contest for board seats after taking a big stake in Catalent.
Separately on Tuesday, Catalent reported a 17% year-over-year drop in revenue to $1.07 billion in the fourth fiscal quarter ended June 30, citing persistent production-related challenges, and announced that it would delay its annual report. The company guided to 2024 sales between $4.3 billion and $ 4.5 billion, which would be above the $4.28 billion recorded in fiscal 2023.
Catalent shares were up 7.4% at 49.01 each as of 9:45 a.m. EDT Tuesday. They were hovering above $100 last year in August and traded close to $140 two years ago.