February 6, 2014 / 9:41 PM / 5 years ago

Investor seeks board seats at Ariad Pharmaceuticals -sources

NEW YORK, Feb 6 (Reuters) - A large shareholder is seeking to get at least two board seats at Ariad Pharmaceuticals Inc , the drugmaker grappling with safety concerns involving its leukemia drug Iclusig, according to people familiar with the matter.

Sarissa Capital Management LP, an activist fund run by Alex Denner - investor Carl Icahn’s former healthcare lieutenant - disclosed in October that it has taken a 6.2 percent stake in Ariad, becoming the company’s second-largest shareholder.

Sarissa has spoken to the biotechnology company about adding a few of its own directors to the board and is interested in reaching a settlement before a proxy deadline, the people said, asking not to be named because the matter is private.

The deadline for nominating a slate of directors to Ariad’s board is Feb. 20.

Ariad, which has an eight-member board, has three seats coming up for re-election at it annual shareholder meeting, expected to occur around the third week of June. The exact date has not been set yet.

Representatives for Ariad and Sarissa Capital declined to comment.

Ariad is Sarissa’s third publicly disclosed investment since launching last year, following an investment in Vivus Inc and one in Astex Pharmaceuticals Inc, which agreed to sell to Japan’s Otsuka Holdings Co in October.

Sarissa joined First Manhattan in a successful proxy battle at Vivus that placed six nominees from the investors and a new chief executive on the company’s board, giving the dissidents a majority.

In October, Ariad suspended sales of Iclusig, its only approved drug, after an investigation by the U.S. Food and Drug Administration found that a significant number of patients developed life-threatening blood clots or narrowing of the veins.

Sales resumed in January, although to a smaller group - patients with a specific genetic mutation and those who are unable to use alternative treatments such as Novartis AG’s Gleevec or Bristol-Myers Squibb Co’s Sprycel.

Ariad’s shares, which plunged to as low as $2.15 after news of the suspension in October, have since recovered to around $7.17, valuing the biotech company at more than $1.3 billion.

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