Mereo and Rubric Capital Management settled their proxy battle, entering a cooperation agreement. As a result, Rubric withdrew its notice for a General Meeting of shareholders.
Mereo BioPharma and Rubric Capital Management settled their proxy battle, entering into a cooperation agreement. As a result, Rubric withdrew its notice for a General Meeting of shareholders.
Under the agreement, four new members will be appointed to the board of directors: Annalisa Jenkins, MBBS, Daniel Shames, M.D., Marc Yoskowitz and Justin Roberts.
Peter Fellner, Ph.D., Brian Schwartz M.D., Abdul Mullick, Ph.D., and Anne Hyland will resign from the board.
“We have appreciated Rubric’s perspectives over the last several months and are pleased to have reached this agreement,” stated Michael Wyzga, chair of Mereo’s board of directors.
Rubric holds a 14% ownership stake in London-based Mereo BioPharma and did not like the current management and company’s direction. In September, Mereo outlined ongoing negotiations with Rubric, which the investment firm rejected.
At that time, Mereo offered to have two of its board directors retire and have them replaced with a Rubric employee and another director. In addition, it provided an outline of its future strategy.
On Sept. 14, Rubric put forth a revised requisition for a general meeting of shareholders, which was scheduled for Nov. 18.
“Rubric invested in Mereo because we believe in the Company’s mission and the inherent potential of its promising programs,” David Rosen, founder and partner of Rubric, stated. “Our Agreement reflects our confidence in that potential and our shared goal to maximize impact and value for all shareholders.”
The battle between the two companies was rancorous. Rubric asked that five Mereo board members - Peter Fellner, Anders Ekblom, Deepika Pakianathan, Brian Schwartz and Michael Wyzga - be immediately removed. and replaced by five Rubric nominees. These included the members who were just added to the board and David Rosen, who was not.
Rubric claimed in a public letter to Mereo shareholders that Mereo’s responses were a “callous disregard for the rights and interests of all of Mereo’s shareholders.” It also accused Mereo’s board of having “no credible plan to create value,” adding that its plan could “be distilled into the following: do nothing; wait and hope for the best.”
Mereo’s response was to state that Rubric’s “underqualified” replacements would threaten the company’s strategic plan, which would depend upon the short-term licensing or sell-off of Mereo’s key assets. Mereo called this plan “irresponsible and suboptimal.”
Mereo has three core programs: setrusumab for Osteogenesis Imperfecta; alvelestat for severe Alpha-1 antitrypsin deficiency-related lung disease (AATD-LD) and bronchiolitis obliterans syndrome (BOS); and etigilimab, for advanced or metastatic solid tumors.
