Innoviva (NSDQ:INVA) said yesterday that it plans to review its costs including the salaries of its top executive and board, bowing to pressure from hedge fund and activist investor Sarissa Capital Management.
Two weeks ago the fund demanded that Innoviva cut CEO Michael Aguiar’s pay to less than $500,000 a year; Aguiar’s total compensation in 2015 was $3.56 million, according to a regulatory filing. GlaxoSmithKline (NYSE:GSK), which owns a 29.3% stake in Innoviva, is working with the company to develop a 3-in-1 combination inhaled lung drug called Relvar Ellipta.
Sarissa, which is run by Alex Denner, a protege of billionaire investor Carl Icahn, owns 2.7% of Innoviva. In March the hedge fund nominated 3 candidates for the Innoviva board; GlaxoSmithKline has pledged to back Innoviva’s candidates at a shareholders meeting slated for April 20.
INVA shares closed down -.07% at $14.19 apiece yesterday.
In February, Innoviva and GSK touted data today from a non-inferiority lung function study evaluating the Relvar Ellipta therapy. The drug is an inhaled, once-daily corticosteroid/long-acting beta2 agonist combination therapy designed to treat patients with asthma.
The study showed that patients with well-controlled asthma could switch from the twice-daily Seretide Accuhaler to the companies’ once-daily Relvar Ellipta therapy without compromising lung function.
Patients who switched to the once-daily therapy maintained a lung function comparable to the patients treated with Seretide Accuhaler twice a day, meeting the study’s primary endpoint.