Depomed Inc (NASDAQ:DEPO)
Depomed Inc. (NASDAQ:DEPO) shares are down 9% in the after-market on Q1 guidance of top-line revenues coming in between $95 and $100 million. This indicates a revenue reduction of 7%. However, that news, while important, does not affect the long- term vision for the pharmaceutical company as much as the news released after the regular trading session had closed. Activist investment group Starboard Value LP successfully moved to replace several directors and Depomed’s CEO.
Depomed, Inc. (NASDAQ:DEPO) today announced that Arthur J. Higgins has joined the Company as President and Chief Executive Officer and member of the Board of Directors, following the resignation of James Schoeneck as President and Chief Executive Officer and member of the Board of Directors.
Depomed also announced that Mr. Higgins, William McKee, former Chief Financial Officer of Barr Pharmaceuticals, LLC, and Gavin Molinelli, a partner at Starboard Value LP have joined the Board of Directors, and that Samuel Saks, M.D. and David Zenoff, D.B.A. have resigned from the Board. Karen Dawes, James Fogarty, Louis Lavigne, Jr., Robert Savage, Peter Staple and James Tyree will continue as members of the Board. James Fogarty will serve as the new Chairman of the Board.
Starboard Value LP is known as an activist investor. According to their website “Starboard Value LP is a New York-based investment adviser with a focused and fundamental approach to investing in publicly traded U.S. companies. Starboard invests in deeply undervalued companies and actively engages with management teams and boards of directors to identify and execute on opportunities to unlock value for the benefit of all shareholders.”
On April 8, 2016, Starboard Value LP acquired 4.14 million shares of DEPO and filed the necessary 13-D form with the SEC. In the filing, it was revealed that Starboard had taken a 6.8% stake in Depomed, Inc. (NASDAQ:DEPO). Depomed’s stock jumped on the back of the news regarding Starboard’s involvement, as the fund has a reputation of successfully reforming companies such as Darden Restaurants.
I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.
About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.