Elan Chairman: "We're Qualified Managers Because We're Irish''
Angry investor Jack Schuler is firing at Elan once again. The FT reports he's trying to block the sale of 19-25 percent of the company to outside investors. Roche is reportedly interested. Instead, Schuler wants Elan's management replaced with people who actually have experience in commercializing drugs.
In response, Elan's management claim that they're perfectly qualified and should stay in place because they're Irish. I am not making this up.
First, the back story ...
This is the latest salvo in an entertaining soap opera. Back in December, Schuler sent an amusing letter to Elan's management, blasting them for:
"Lack of relevant industry experience, gross incompetence related to the management of Tysabri and its partnership with Biogen, and egregious misuse of company resources have caused investors to lose confidence in [CEO] Mr. [Kelly] Martin and his management team."Among other things, Schuler highlighted:
- Elan's management inexperience ("What was the board thinking when they chose a Merrill Lynch employee to be the CEO of Elan? ... As I look at Elan's top ten executives, I do not see anyone with any pharmaceutical marketing experience.")
- Its use of corporate jets ("... the company provides the CEO access to corporate jets, some of which are the largest and most expensive. For your CEO to fly from his home to the heart of the company in San Francisco would cost between $100,000 and $150,000 depending on the plane he chooses.")
- And the fact that the management team is located in a bunch of different cities on different continents.
They [Schuler et al] are concerned that a plan being mooted to sell a 19 per cent stake of Elan to a big pharmaceutical company would restrict the company's future growth.
... "Elan is a great company that has terrific lifesaving drugs but a management entrenched in arrogance," said Mr Schuler, who over the weekend dismissed the directors' reply as inadequate. "They are trying to defend the indefensible. They should have appointed commercial people two years ago."Perhaps the best part of the FT's story is buried near the bottom. It's chairman Kyran McLaughlin's explanation of why he and CEO Kelly Martin are the right men for the job. It's their Irishness, it turns out. The FT:
He had no plans to step down as chairman, adding Elan needed an Irish chairman or chief executive for tax and regulatory purposes. "If there was a remote whisper around the board for me to go, I'd be gone," he said. "The people who are unhappy are a small minority."
- Previous BNET coverage of Elan:
- Elan Sees Problems on Alzheimer's Drug; Puts Itself Up for Sale
- Elan "Poison Pill" Deal With Biogen Prevents Rumored Pfizer Takeover
- Elan's Pennsylvania Lawyer Once Again Makes News