The following constitutes Amendment No. 4 to the Schedule 13D filed by the undersigned (“Amendment No. 4”). This Amendment No. 4 amends the Schedule 13D as specifically set forth herein.
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Item 3.
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Source and Amount of Funds or Other Consideration
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Item 3 is hereby amended and restated to read as follows:
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The Shares purchased by each of Krensavage Partners and Krensavage Partners Too were purchased with working capital (which may, at any given time, include margin loans made by brokerage firms in the ordinary course of business) in open market purchases. The aggregate purchase price of the 3,424,289 Shares directly owned by Krensavage Partners is approximately $13,560,184, including brokerage commissions. The aggregate purchase price of the 630,475 Shares directly owned by Krensavage Partners Too is approximately $2,994,756, including brokerage commissions.
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Item 4.
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Purpose of the Transaction.
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Item 4 is hereby amended to add the following:
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On July 27, 2016, Krensavage Asset Management and its affiliates (collectively, “Krensavage”) delivered a letter to Curtis M. Selquist, Chairman of the Issuer’s Board of Directors (the “Board”), expressing its concerns with the Issuer’s operating results for the second quarter of 2016 as well as certain actions taken by the Issuer’s management team and Board in connection with the 2016 annual meeting of shareholders (the “2016 Annual Meeting”), including, among others: (i) squandering $2.7 million, or eight times Krensavage’s budget and more than 20% of the Issuer’s cash on hand at the end of June 2016, on a proxy contest instead of settling with Krensavage; (ii) amending the Issuer’s Amended and Restated Bylaws on July 6, 2016 to complicate the nomination of directors; (iii) cutting guidance for fiscal 2016 after the conclusion of the 2016 Annual Meeting; (iv) hiring consultants to develop a plan for the Issuer after claiming that Krensavage lacked such a plan during the proxy fight; (v) retaining Brian K. Hutchison as chief executive after more than 14 years of failed promises and eroding shareholder value; and (vi) using “adjusted EBITDA” to evaluate performance, which Krensavage finds misleading because it not only ignores the Issuer’s massive capital spending (similar to EBITDA) but also ignores other real expenses of the Issuer. A copy of the letter is attached hereto as exhibit 99.1 and is incorporated herein by reference.
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Item 5.
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Interest in Securities of the Issuer.
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Items 5(a)-(c) are hereby amended and restated to read as follows:
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The aggregate percentage of Shares reported owned by each person named herein is based upon 58,026,674 Shares outstanding, as of April 27, 2016, which is the total number of Shares outstanding as reported in the Issuer’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on May 4, 2016.
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(a)
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As of the close of business on July 27, 2016, Krensavage Partners directly owns 3,424,289 Shares.
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Percentage: Approximately 5.9%
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(b)
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1. Sole power to vote or direct vote: 3,424,289
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2. Shared power to vote or direct vote: 0
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3. Sole power to dispose or direct the disposition: 3,424,289
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4. Shared power to dispose or direct the disposition: 0
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(c)
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The transactions in the Shares by Krensavage Partners since the filing of Amendment No. 3 to the Schedule 13D are set forth in Schedule A and are incorporated herein by reference.
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(a)
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Krensavage Advisors, as the general partner of Krensavage Partners, may be deemed the beneficial owner of the 3,424,289 Shares owned by Krensavage Partners.
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Percentage: Approximately 5.9%
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(b)
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1. Sole power to vote or direct vote: 3,424,289
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2. Shared power to vote or direct vote: 0
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3. Sole power to dispose or direct the disposition: 3,424,289
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4. Shared power to dispose or direct the disposition: 0
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(c)
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Krensavage Advisors has not entered into any transactions in the Shares since the filing of Amendment No. 3 to the Schedule 13D. The transactions in the Shares on behalf of Krensavage Partners since the filing of Amendment No. 3 to the Schedule 13D are set forth in Schedule A and are incorporated herein by reference.
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C.
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Krensavage Partners Too
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(a)
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As of the close of business on July 27, 2016, Krensavage Partners Too directly owns 630,475 Shares.
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Percentage: 1.1%
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(b)
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1. Sole power to vote or direct vote: 630,475
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2. Shared power to vote or direct vote: 0
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3. Sole power to dispose or direct the disposition: 630,475
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4. Shared power to dispose or direct the disposition: 0
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(c)
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The transactions in the Shares by Krensavage Partners Too since the filing of Amendment No. 3 to the Schedule 13D are set forth in Schedule A and are incorporated herein by reference.
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D.
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Krensavage Advisors Too
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(a)
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Krensavage Advisors Too, as the general partner of Krensavage Partners Too, may be deemed the beneficial owner of the 630,475 Shares owned by Krensavage Partners Too.
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Percentage: 1.1%
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(b)
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1. Sole power to vote or direct vote: 630,475
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2. Shared power to vote or direct vote: 0
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3. Sole power to dispose or direct the disposition: 630,475
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4. Shared power to dispose or direct the disposition: 0
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(c)
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Krensavage Advisors Too has not entered into any transactions in the Shares since the filing of Amendment No. 3 to the Schedule 13D. The transactions in the Shares on behalf of Krensavage Partners Too since the filing of Amendment No. 3 to the Schedule 13D are set forth in Schedule A and are incorporated herein by reference.
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E.
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Krensavage Asset Management
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(a)
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Krensavage Asset Management, as the investment manager of each of Krensavage Partners and Krensavage Partners Too, may be deemed the beneficial owner of the (i) 3,424,289 Shares owned by Krensavage Partners and (ii) 630,475 Shares owned by Krensavage Partners Too.
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Percentage: Approximately 7.0%
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(b)
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1. Sole power to vote or direct vote: 4,054,764
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2. Shared power to vote or direct vote: 0
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3. Sole power to dispose or direct the disposition: 4,054,764
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4. Shared power to dispose or direct the disposition: 0
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(c)
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Krensavage Asset Management has not entered into any transactions in the Shares since the filing of Amendment No. 3 to the Schedule 13D. The transactions in the Shares on behalf of each of Krensavage Partners and Krensavage Partners Too since the filing of Amendment No. 3 to the Schedule 13D are set forth in Schedule A and are incorporated herein by reference.
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(a)
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Mr. Krensavage, as the managing member of Krensavage Asset Management, may be deemed the beneficial owner of the (i) 3,424,289 Shares owned by Krensavage Partners and (ii) 630,475 Shares owned by Krensavage Partners Too.
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Percentage: Approximately 7.0%
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(b)
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1. Sole power to vote or direct vote: 4,054,764
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2. Shared power to vote or direct vote: 0
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3. Sole power to dispose or direct the disposition: 4,054,764
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4. Shared power to dispose or direct the disposition: 0
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(c)
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Mr. Krensavage has not entered into any transactions in the Shares since the filing of Amendment No. 3 to the Schedule 13D. The transactions in the Shares on behalf of each of Krensavage Partners and Krensavage Partners Too since the filing of Amendment No. 3 to the Schedule 13D are set forth in Schedule A and are incorporated herein by reference.
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The Reporting Persons, as members of a “group” for the purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, may be deemed the beneficial owner of the Shares directly owned by the other Reporting Persons. Each Reporting Person disclaims beneficial ownership of such Shares except to the extent of his or its pecuniary interest therein.
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Item 7.
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Material to be Filed as Exhibits
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Item 7 is hereby amended to add the following exhibit:
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99.1
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Letter to the Chairman of the Board, dated July 27, 2016.
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SIGNATURES
After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.
Dated: July 28, 2016
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Krensavage Partners, LP
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By:
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Krensavage Asset Management, LLC
Investment Manager
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By:
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/s/ Michael P. Krensavage
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Name:
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Michael P. Krensavage
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Title:
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Managing Member
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Krensavage Partners Too, LP
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By:
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Krensavage Asset Management, LLC
Investment Manager
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By:
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/s/ Michael P. Krensavage
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Name:
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Michael P. Krensavage
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Title:
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Managing Member
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Krensavage Advisors, LLC
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By:
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/s/ Michael P. Krensavage
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Name:
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Michael P. Krensavage
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Title:
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Owner
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Krensavage Advisors Too, LLC
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By:
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/s/ Michael P. Krensavage
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Name:
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Michael P. Krensavage
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Title:
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Owner
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Krensavage Asset Management, LLC
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By:
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/s/ Michael P. Krensavage
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Name:
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Michael P. Krensavage
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Title:
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Managing Member
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/s/ Michael P. Krensavage
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MICHAEL P. KRENSAVAGE
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SCHEDULE A
Transactions in the Shares
Since the Filing of Amendment No. 3 to the Schedule 13D
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Shares of Common Stock
Purchased / (Sold)
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Price Per
Share($)
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Date of
Purchase / Sale
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KRENSAVAGE PARTNERS, LP
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75
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3.7500
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05/31/2016
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16,834
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3.7248
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06/01/2016
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9,360
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3.6659
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06/03/2016
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9,432
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3.6939
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06/08/2016
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21,150
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3.7753
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06/09/2016
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8,544
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3.7142
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06/10/2016
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16,941
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3.7471
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06/21/2016
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841
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3.7000
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06/22/2016
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8,481
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3.6600
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06/24/2016
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33,768
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3.5737
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06/27/2016
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337,173
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3.4505
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07/27/2016
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KRENSAVAGE PARTNERS TOO, LP
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25
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3.7500
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05/31/2016
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3,076
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3.7248
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06/01/2016
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1,736
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3.6659
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06/03/2016
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568
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3.6939
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06/08/2016
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3,850
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3.7753
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06/09/2016
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1,556
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3.7142
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06/10/2016
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3,059
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3.7471
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06/21/2016
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159
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3.7000
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06/22/2016
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1,519
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3.6600
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06/24/2016
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6,232
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3.5737
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06/27/2016
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6,763
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3.6511
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07/06/2016
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62,827
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3.4505
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07/27/2016
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