ALPHARETTA, Ga.--(BUSINESS WIRE)--Jun 13, 2022--
Velan Capital Investment Management LP and Repertoire Partners LP (together with the other participants in their solicitation, “Velan-Repertoire” or “we”), collectively one of the largest stockholders of Radius Health, Inc. (“Radius” or the “Company”) (NASDAQ: RDUS), with beneficial ownership of approximately 7.7% of the outstanding shares and economic exposure to approximately 10.1% of the outstanding shares, today responded to recent statements made by the Radius Board of Directors (the “Board”).
In its recent letter to stockholders, the Board touts that the Company was “effectively transformed through internal activism.” i However, in our view, the Company is deliberately applying a flawed definition of activism to mislead stockholders. This is apparently what the current Board considers activism (and an effective transformation, no less):
CEO Martin and the Board are apparently proud to announce that “90% of the management team has been changed and approximately 60% of current employees have joined the Company” in the past 24 months. What they fail to tell stockholders is that in the year leading up to CEO Martin’s appointment, TYMLOS’ revenue growth was 61% from the first quarter of 2019 to the first quarter of 2020, compared to CEO Martin’s tenure which has seen TYMLOS’ revenue decline 10% from the first quarter of 2020 to the first quarter of 2022.
We believe the incredibly high employee turnover coupled with declining sales is the result of poor Board oversight and CEO Martin’s strategic preference to only dedicate half of his time to TYMLOS. In our view, a properly functioning Board would have demanded that TYMLOS get the appropriate management focus and prioritized sales growth. Instead, Radius touts its productivity per commercial employee – which is only increasing because the number of employees is declining at a faster rate than revenue.
Urgent stockholder-driven change is needed within the Radius boardroom. So-called “internal activism” has failed. The current Board has created a toxic culture with minimal management oversight and no accountability – this is evidenced by 60% employee turnover, TYMLOS net sales declining by 10% and Radius stock price declining 49% during the first 24 months of CEO Martin’s tenure. iii
In contrast, Velan-Repertoire and our nominees – Eric Ende, Cynthia Flowers and Ann MacDougall – understand what true activism means:
Fundamentally, stockholder activism is about fighting to effect positive change to benefit all stockholders. In contrast, we believe the current Board’s self-described “internal activism” is indicative of self-preservation and fighting for CEO Martin’s interests given the packing of the Board with his allies and ensuing lack of accountability.
In our view, the disconnect is due to the apparent lack of alignment between the Board and stockholders. While stockholders have suffered immensely from the precipitous decline in the Company’s stock price, the same pain has not been felt in the boardroom given the Board’s collective minimal ownership. Real and meaningful change is desperately needed in the boardroom to ensure that stockholders’ interests come first. Vote on the proxy card today to send a clear message that the status quo will no longer be accepted and to help effect much needed change at Radius.
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[email protected] Partners LLC
Pat McHugh / Jason Alexander
Longacre Square Partners
Dan Zacchei / Joe Germani
KEYWORD: GEORGIA UNITED STATES NORTH AMERICA
INDUSTRY KEYWORD: PROFESSIONAL SERVICES FINANCE
SOURCE: Velan-Repertoire Group
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PUB: 06/13/2022 07:00 AM/DISC: 06/13/2022 07:03 AM