Ariad lets an activist through the gate as shaky buyout rumors linger

Sarissa Capital Management founder Alex Denner

Ariad Pharmaceuticals ($ARIA) has appointed a former Carl Icahn acolyte to its board of directors, giving in to the activist investor after downing a poison pill to fend off any hostile advances. Now, amid some loosely founded chatter about its M&A potential, the bruised biotech could be in for another shakeup.

Sarissa Capital Management founder Alex Denner will take a seat at the table for a two-year term, Ariad said, something he demanded back in October when escalating safety concerns over Iclusig, the company's sole approved drug, sent it on a value-raiding downswing. The ensuing months of bad news lopped more than $2.5 billion off of Ariad's market cap, and now, after getting FDA approval to reintroduce Iclusig to a smaller patient population, the company is working to put the pieces back together.

Where Denner fits in remains to be seen, but his reputation for shaking up boardrooms is well-established. Denner was the head of healthcare for corporate raider Icahn's firm before he struck out on his own with Sarissa in 2011, and he has since found his way into spats with Otsuka, Vivus ($VVUS) and Enzon. In a statement on joining Ariad's board, Denner said he has reached an agreement with the company that "offers the opportunity to immediately work together with the existing board to maximize the potential of Iclusig and the pipeline of cancer medicines and to build value for all shareholders."

Whether Iclusig's maximum value lies with Ariad is another matter altogether, and the whisper of buyout interest from the likes of Eli Lilly ($LLY), GlaxoSmithKline ($GSK) and Shire ($SHPG) was enough to give the biotech's shares a 10% boost last month. That report, from the U.K.'s Daily Mail, doesn't seem terribly likely for a host of reasons, but its effect on Ariad's stock price indicates that a "for sale" sign would fit within Denner's mandate of building vale for shareholders.

- read the statement

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