UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
(Rule
14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
The Securities Exchange Act of 1934
(Amendment No. 1)
Filed by the Registrant ☐
Filed by a Party other than the Registrant ☒
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Under Rule 14a-12
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PROGENICS PHARMACEUTICALS, INC.
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(Name of Registrant as Specified in Its Charter)
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VELAN CAPITAL, L.P.
ALTIVA MANAGEMENT INC.
BALAJI VENKATARAMAN
VIRINDER NOHRIA
LTE PARTNERS, LLC
LTE MANAGEMENT, LLC
MELKONIAN CAPITAL MANAGEMENT, LLC
RYAN MELKONIAN
TERENCE COOKE
DEEPAK SARPANGAL
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(Name of Persons(s) Filing Proxy Statement, if Other Than the Registrant)
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Form, Schedule or Registration Statement No.:
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PRELIMINARY COPY SUBJECT TO COMPLETION
DATED MAY 17, 2019
VELAN CAPITAL, L.P.
_______, 2019
Dear Fellow Progenics
Stockholders:
Velan Capital, L.P.,
Altiva Management Inc., Balaji Venkataraman, Virinder Nohria, LTE Partners, LLC, LTE Management, LLC, Melkonian Capital Management,
LLC, Ryan Melkonian, Terence Cooke and Deepak Sarpangal (collectively, the “Participating Stockholders”, or “we”),
beneficially own in the aggregate [7,765,000] shares of common stock, par value $0.0013 per share (the “Common Stock”),
of Progenics Pharmaceuticals, Inc., a Delaware corporation (“Progenics” or the “Company”), representing
approximately [9.2]% of the outstanding shares of Common Stock, making us one of the Company’s largest stockholders. For
the reasons set forth in the attached Proxy Statement, we believe changes to the composition of the Board of Directors of the Company
(the “Board”) are necessary in order to ensure that the Company is being run in a manner consistent with your best
interests.
We believe there
is significant value to be realized at Progenics. However, we are concerned that the Board is not taking appropriate action to
execute upon the opportunities that we believe are available to drive stockholder value. Given the Company’s stock price
underperformance under the oversight of the current Board, we strongly believe that the Board must be reconstituted to ensure that
the interests of the stockholders, the true owners of the Company, are appropriately represented in the boardroom.
For this reason,
we submitted a nomination of director candidates for election to the Board at the Company’s 2019 Annual Meeting of Stockholders
(the “Annual Meeting”), however, the Board invalidated our nomination on technical grounds
1
,
thereby preventing us from running a competing slate of nominees at this year’s Annual Meeting. We believe the Board’s
rejection of our nomination not only demonstrates a disregard for the concerns of its stockholders but serves to frustrate the
shareholder franchise and entrench the Board.
Accordingly, we
are seeking your support to vote
AGAINST
the re-election of Peter J. Crowley and Michael D. Kishbauch as directors at the
Annual Meeting. By voting
AGAINST
Mr. Crowley, as Chairman of the Board who we believe is largely responsible for the overall
lack of accountability at Progenics given the Company’s persistent underperformance, and Mr. Kishbauch, as Chairman of the
Nominating and Corporate Governance Committee who oversaw the invalidation of our nomination due to a mere technicality, and who
together represent the sole members of the Compensation Committee that we believe has approved excessive compensation to Progenics’
directors and officers, stockholders will be sending a strong message to the Board that they are dissatisfied with the status quo
and that meaningful change is required.
We note that the
election of directors at Progenics requires the vote of a majority of the shares present in person, or represented by proxy at
the Annual Meeting.
Importantly, the Company has a director resignation policy in place for uncontested elections, whereby
each director submits a contingent resignation which becomes effective if he or she fails to receive a sufficient number of votes
for re-election at the Annual Meeting and the Board accepts the resignation.
The Nominating and Corporate Governance Committee
will make a recommendation to the Board on whether to accept or reject the resignation, or whether other action should be taken.
The Board will act on the Nominating and Corporate Governance Committee’s recommendation and publicly disclose its decision
and the rationale behind it within 90 days from the date of the certification of the election results. If our proxy solicitation
results in any directors failing to receive a majority of the votes cast for his election, then we believe it would clearly be
inappropriate for any such director to continue to serve on the Board. We believe the failure of the Board to accept any such
tendered resignations that may result from the Annual Meeting would be an egregious violation of proper corporate governance,
and in direct opposition to a clear stockholder directive.
1
On the date Velan submitted its nomination, it beneficially owned shares of Progenics in “street”
name. While Velan is currently a stockholder of record of Progenics, it was not a stockholder of record on the date it submitted
its nomination pursuant to the Company’s Bylaws.
We urge you to carefully
consider the information contained in the attached Proxy Statement and then support our efforts by signing, dating and returning
the enclosed
GREEN
proxy card today. The attached Proxy Statement and the enclosed
GREEN
proxy card are first being
furnished to the stockholders on or about ______ __, 2019.
If you have already
voted for the incumbent management slate, you have every right to change your vote by signing, dating and returning the enclosed
GREEN
proxy card or by voting in person at the Annual Meeting.
The Company’s
slogan is “Find, Fight, and Follow” -- we urge stockholders to “Find” the status quo unacceptable, “Fight”
years of value destruction and squandered opportunities, and “Follow” our call to action by voting
AGAINST
the
re-election of
Messrs. Crowley and Kishbauch
on the
GREEN
proxy card.
If you have any
questions or require any assistance with your vote, please contact Okapi Partners LLC, which is assisting us, at its address and
toll-free numbers listed on the following page.
Thank you for your support,
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/s/ Balaji Venkataraman
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Balaji Venkataraman
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Velan Capital, L.P.
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If you have any questions regarding your
GREEN
proxy card or need assistance in executing your proxy, please contact:
Okapi Partners LLC
1212 Avenue of the Americas, 24th Floor
New York, New York 10036
Stockholders may call toll-free: (888) 785-6673
Banks and brokers call: (212) 297-0720
E-mail: info@okapipartners.com
PRELIMINARY COPY SUBJECT TO COMPLETION
DATED MAY 17, 2019
2019 ANNUAL MEETING OF STOCKHOLDERS
OF
Progenics
Pharmaceuticals, Inc.
_________________________
PROXY STATEMENT
OF
VELAN CAPITAL, L.P.
_________________________
PLEASE SIGN, DATE AND MAIL THE ENCLOSED GREEN PROXY CARD TODAY
Velan Capital, L.P.
(“Velan”), Altiva Management Inc. (“Altiva”), Balaji Venkataraman, Virinder Nohria, LTE Partners, LLC
(“LTE”), LTE Management, LLC (“LTE Management”), Melkonian Capital Management, LLC (“MCM”),
Ryan Melkonian, Terence Cooke and Deepak Sarpangal (collectively, the “Participating Stockholders”, or “we”),
are significant stockholders of Progenics Pharmaceuticals, Inc., a Delaware corporation (“Progenics” or the “Company”),
owning approximately [9.2]% of the outstanding shares of common stock, par value $0.0013 per share (the “Common Stock”),
of the Company. We are seeking your support at the annual meeting of stockholders scheduled to be held at [______], on [____],
2019 at [_____] (including any adjournments or postponements thereof and any meeting which may be called in lieu thereof, the
“Annual Meeting”), to vote
AGAINST
the election of
Peter J. Crowley and Michael D. Kishbauch
to the
Company’s Board of Directors (the “Board”).
Our
GREEN
proxy
card will also allow stockholders to vote on the following proposals that are being presented by the Company for stockholder consideration
at the Annual Meeting:
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The approval, on an advisory basis, of the compensation of the Company’s named executive
officers;
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The ratification of the Board’s selection of Ernst & Young LLP to serve as the Company’s
independent registered public accounting firm for 2019; and
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Such other business as may properly come before the Annual Meeting or any adjournment or postponement
thereof.
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This Proxy Statement
and the enclosed
GREEN
proxy card are first being furnished to the stockholders on or about ______ __, 2019.
As of the date
hereof, the Participating Stockholders collectively own [7,765,000] shares of Common Stock (“Velan Group Shares”).
We intend to vote our Velan Group Shares
AGAINST
the election of Peter J. Crowley, Michael D. Kishbauch and Mark R. Baker
and
FOR
the election of the remaining Progenics director nominees (collectively, the “Progenics Nominees”),
AGAINST
the approval of the advisory vote on the compensation of the Company’s named executive officers, and
FOR
the ratification of the selection of Ernst & Young LLP as the Company’s registered public accounting firm for 2019,
as described herein. Stockholders should understand, however, that all shares of Common Stock represented by the enclosed
GREEN
proxy card will be voted at the Annual Meeting as marked and, in the absence of specific instructions, will be voted in accordance
with Velan’s recommendations and voting instructions specified herein and in accordance with the discretion of the persons
named on the
GREEN
proxy card with respect to any other matters that may be voted upon at the Annual Meeting. Please see
the “Voting and Proxy Procedures” section of this Proxy Statement and the
GREEN
proxy card for additional detail.
Please note that
the Progenics Nominees are not the nominees of Velan and have not consented to be named in this Proxy Statement. Because the Progenics
Nominees are not Velan’s nominees and have not consented to be named in this Proxy Statement, they are not participants in
this solicitation. We can provide no assurance that any of the Progenics Nominees will serve as directors if elected.
The Company has
set the close of business on [_____] as the record date for determining stockholders entitled to notice of and to vote at the Annual
Meeting (the “Record Date”). The mailing address of the principal executive offices of the Company is One World Trade
Center, 47th Floor, New York, NY 10007. According to the Company, as of the Record Date, there were [____] shares of Common Stock
outstanding.
THIS SOLICITATION IS BEING MADE BY
The
Participating Stockholders
AND NOT ON BEHALF OF THE BOARD OF DIRECTORS OR MANAGEMENT OF THE COMPANY. WE ARE NOT AWARE OF
ANY OTHER MATTERS TO BE BROUGHT BEFORE THE ANNUAL MEETING OTHER THAN AS SET FORTH IN THIS PROXY STATEMENT. SHOULD OTHER MATTERS,
WHICH
The Participating Stockholders
ARE NOT AWARE OF A REASONABLE TIME BEFORE THIS
SOLICITATION, BE BROUGHT BEFORE THE ANNUAL MEETING, THE PERSON NAMED AS PROXY IN THE ENCLOSED
GREEN
PROXY CARD WILL VOTE
ON SUCH MATTERS IN HIS DISCRETION.
The
Participating Stockholders
URGE YOU TO SIGN, DATE AND RETURN THE
GREEN
PROXY CARD TO VOTE
AGAINST
THE ELECTION
OF
Peter J. Crowley and Michael D. Kishbauch
TO THE BOARD AT THE ANNUAL MEETING.
IF YOU HAVE ALREADY SENT A PROXY CARD
FURNISHED BY COMPANY MANAGEMENT OR THE BOARD, YOU MAY REVOKE THAT PROXY AND VOTE ON EACH OF THE PROPOSALS DESCRIBED IN THIS PROXY
STATEMENT BY SIGNING, DATING AND RETURNING THE ENCLOSED
GREEN
PROXY CARD. THE LATEST DATED PROXY IS THE ONLY ONE THAT COUNTS.
ANY PROXY MAY BE REVOKED AT ANY TIME PRIOR TO THE ANNUAL MEETING BY DELIVERING A WRITTEN NOTICE OF REVOCATION OR A LATER DATED
PROXY FOR THE ANNUAL MEETING OR BY VOTING IN PERSON AT THE ANNUAL MEETING.
Important Notice Regarding the Availability
of Proxy Materials for the Annual Meeting—This Proxy Statement and our GREEN proxy card are available at
[______________________________]
IMPORTANT
Your vote is
important, no matter how many shares of Common Stock you own. The Participating Stockholders urge you to sign, date, and return
the enclosed GREEN proxy card today to vote AGAINST the election of Peter J. Crowley and Michael D. Kishbauch to the Board and
in accordance with the Participating Stockholders’ recommendations on the other proposals on the agenda for the Annual Meeting.
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If your shares of Common Stock are registered in your own name, please sign and date the enclosed
GREEN
proxy card and return it to the Participating Stockholders, c/o Okapi Partners LLC (“Okapi”), in the enclosed
postage-paid envelope today.
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If your shares of Common Stock are held in a brokerage account or bank, you are considered the
beneficial owner of the shares of Common Stock, and these proxy materials, together with a
GREEN
voting form, are being
forwarded to you by your broker or bank.
As a beneficial owner, you must instruct your broker, trustee or other representative
how to vote.
Your broker cannot vote your shares of Common Stock on your behalf without your instructions.
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Depending upon your broker or custodian, you may be able to vote either by toll-free telephone
or by the Internet. Please refer to the enclosed voting form for instructions on how to vote electronically. You may also vote
by signing, dating and returning the enclosed voting form.
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Since only your
latest dated proxy card will count, we urge you not to return any proxy card you receive from the Company as it will revoke any
proxy card you may have previously sent to us. So please make certain that the latest dated proxy card you return is the
GREEN
proxy card.
If you have any questions regarding your
GREEN
proxy card or need assistance in executing your proxy, please contact:
Okapi Partners LLC
1212 Avenue of the Americas, 24th Floor
New York, New York 10036
Stockholders may call toll-free: (888) 785-6673
Banks and brokers call: (212) 297-0720
E-mail: info@okapipartners.com
Background to the Solicitation
Below is a chronological
list of interactions and events leading up to this proxy solicitation:
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After having followed the Company and its predecessors for years, Velan initiated
its current investment in July 2018 and initially interacted with representatives of the Company during a telephonic conversation
on November 29, 2018.
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Over the ensuing months, Velan pursued further due diligence related to the Company,
which included consultations with several third parties, including key opinion leaders (“KOLs”) and other industry
participants.
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On January 7, 2019, Velan met with Patrick Fabbio, Chief Financial Officer of
the Company, at the annual J.P. Morgan Healthcare Conference. After this meeting, Velan contacted the Company’s management
on multiple occasions to schedule further interactions but did not receive any response or acknowledgment from the management team.
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On February 18, 2019, Velan sent a letter to the Board expressing disappointment
with the Company’s lack of responsiveness to the attempted outreach of an interested stockholder, highlighting certain important
issues that Velan had sought to cover with senior management.
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On February 22, 2019, Peter Crowley, Chairman of the Board, responded to Velan’s
letter noting the Board had yet to review or consider Velan’s observations.
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On March 7, 2019, Velan sent another letter to the Board noting Velan’s
disappointment in the continued lack of response and engagement from the Company. As a result, Velan requested the documentation
required in order to nominate directors for election to the Board. In this letter, Velan made clear its preference to work constructively
with the Board.
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On March 8, 2019, Mr. Crowley responded to Velan’s letter of March 7, 2019,
proposing a meeting between himself, Velan and Mark Baker, Chief Executive Officer and a director of the Company.
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On March 13, 2019, Mr. Venkataraman had a telephone conversation with the Mr.
Crowley. During the call, Mr. Venkataraman discussed his views on the Company (including its management team) and noted Velan’s
willingness to work with the Company. Mr. Venkataraman felt that Mr. Crowley acknowledged that execution was meaningfully lacking,
though Mr. Crowley later disputed this account.
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On March 15, 2019, given the limited engagement and openness believed to be shown
by the Company, Velan nominated six candidates for election to the Board at the Annual Meeting, including Messrs. Venkataraman,
Nohria, Sarpangal, Melkonian, Cooke and Matthew Heck, in order to facilitate stockholder involvement and value creation.
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On March 25, 2019, Messrs. Venkataraman and Sarpangal met with Messrs. Crowley
and Baker in New York City to discuss the issues and concerns highlighted by Velan. During this meeting, Velan disclosed that it
owned approximately four percent (4%) of the Company’s outstanding shares, which included a significant amount of stock purchased
immediately following the Company’s fourth quarter 2018 earnings call, and that while already one of the Company’s
large stockholders, there was a good chance that Velan might become one of the largest, if not the largest stockholder. Mr. Crowley
stated they would consider the topics raised by Messrs. Venkataraman and Sarpangal at an April 1, 2019 meeting of the Board.
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On March 27, 2019, Velan sent a letter to Messrs. Crowley and Baker noting Velan’s
disappointment with the tone of the in-person meeting on March 25, 2019, and expressing hope that Velan’s concerns and issues
would be seriously considered by the Board. In order to facilitate any such review, Velan also shared a presentation highlighting
various concerns, along with the benefits that Velan believed its nominees would provide.
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On March 27, 2019, the Participating Stockholders crossed the five percent (5%)
ownership threshold, thereby triggering their obligation under the Securities Exchange Act of 1934 (the “Exchange Act”)
to file a Schedule 13D within 10 calendar days.
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On April 4, 2019, Mr. Crowley sent a letter to Velan confirming receipt of Velan’s
March 27, 2019 letter. Mr. Crowley did not indicate whether or not Velan’s concerns were discussed at the April 1, 2019 meeting
of the Board or provide any further feedback on the concerns Velan had raised.
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Prior to the Participating Stockholders’ filing of their Schedule 13D on
April 5, 2019, Mr. Sarpangal called Mr. Crowley multiple times to follow up on the March 25, 2019 meeting but the calls were neither
accepted nor returned. The final call on April 4, 2019 was meant to inform the Company of the upcoming Schedule 13D filing.
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On April 5, 2019, the Participating Stockholders filed a Schedule 13D with the
SEC reporting their collective beneficial ownership, as of the close of business on April 4, 2019, of 6,233,796 shares of the Common
Stock, representing 7.4% of the Company’s outstanding shares.
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Between April 7, 2019 and April 15, 2019, Mr. Fabbio and Velan engaged in email
communications regarding scheduling interviews with the Company’s Nominating and Corporate Governance Committee for Velan’s
nominees.
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On April 11, 2019, Mr. Sarpangal emailed Mr. Fabbio to schedule a brief phone
call to discuss clarification questions related to the Company’s financial profile. After not receiving a response for several
days, Mr. Sarpangal emailed Mr. Fabbio again on April 14, 2019, after which Mr. Fabbio and Melissa Downs, the Company’s Associate
Director, Investor Relations, arranged a half hour phone call on April 15, 2019.
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On April 15, 2019, Mr. Fabbio provided a letter confirming the meeting dates
for Velan’s nominees and requesting clarification of Velan’s share ownership at the time Velan’s nomination materials
were submitted.
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On April 16, 2019, Velan’s outside counsel sent a letter to Mr. Fabbio
responding to Mr. Fabbio’s letter of April 15, 2019 and confirming Velan’s ownership of its shares in the Company at
the time its nomination materials were submitted and offering to provide any further confirmation the Company may request.
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On April 18, 2019, Dr. Nohria held a telephonic meeting with Michael Kishbauch,
Chairman of the Nominating and Corporate Governance Committee, and Nicole Williams, a director of the Company, to discuss Dr. Nohria’s
qualifications for serving on the Board
.
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On April 19, 2019, Mr. Melkonian held an in-person meeting in New York City with
Mr. Kishbauch which included telephonic participation by Ms. Williams to discuss Mr. Melkonian’s qualifications for serving
on the Board.
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Between April 15-22, 2019, Velan and its outside counsel contacted the Company
on multiple occasions seeking clarification of the correct record date. This outreach was ignored by the Company.
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On April 22, 2019, the Company delivered a letter to
Velan, which it filed with the SEC, invalidating Velan’s nomination of director
candidates on technical grounds
2
,
thereby deeming Velan’s nominees ineligible for election as directors at the Annual
Meeting.
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On April 24, 2019, Messrs. Venkataraman, Heck, Sarpangal and Cooke held separate
in-person meetings in New York City with Mr. Kishbauch and Ms. Williams to discuss their respective qualifications for serving
on the Board. During Mr. Venkataraman’s meeting, he again conveyed Velan’s willingness to constructively engage with
Progenics and requested a response from the Company by April 25, 2019.
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On April 25, 2019, the Company delivered a letter to Velan noting that the Board
was considering Velan’s request for a response.
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Following delivery of the Company’s April 25
th
letter, outside
counsel for each of Velan and the Company engaged in various discussions regarding the Company’s responses to Velan’s
requests and Velan’s desire for a swift response. Notwithstanding Velan’s desire for a more immediate response, it
requested that the Company respond to its requests no later than May 3, 2019.
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On April 30, 2019, Velan delivered a letter to the Company, within its rights as a stockholder of the Company
under Delaware law, demanding production of certain of the Company’s books and records, pursuant to Section 220 of the Delaware
General Corporation Law.
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On May 1, 2019, the Participating Stockholders filed Amendment No. 1 to the Schedule 13D with the SEC reporting
their collective beneficial ownership, as of the close of business on April 30, 2019, of
7,679,578
shares of the Common Stock, representing 9.1% of the Company’s outstanding shares.
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On May 3, 2019, the Company responded to Velan’s request, however, Velan does not believe the response
reflects the level of change that it believes is necessary to drive stockholder value at the Company.
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On May 6, 2019, Velan delivered a letter to the Board and issued a press release expressing
its concerns with the Company’s persistent underperformance and poor corporate governance practices in light of the Company’s
invalidation of its nomination of director candidates. Velan also stated in the letter that despite its sincere efforts to work
constructively with the Company, it has been left with no choice but to hold the Board accountable at this year’s Annual
Meeting.
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On May 7, 2019, the Participating Stockholders filed a preliminary proxy statement
in connection with the Annual Meeting.
2
On the date Velan submitted its nomination, it beneficially owned shares of Progenics in “street”
name. While Velan is currently a stockholder of record of Progenics, it was not a stockholder of record on the date it submitted
its nomination pursuant to the Company’s Bylaws.
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On May 8, 2019, Velan issued a press release calling on the Company’s management
team and Board to increase the level of disclosure and transparency when Progenics reports first quarter results on May 9, 2019
and posed a series of questions to be answered by the Company on the earnings call. Velan also announced that it filed a preliminary
proxy statement seeking stockholder support against the election of Messrs. Crowley and Kishbauch at the Annual Meeting.
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On May 13, 2019, Velan issued a press release calling on the Company’s management team and Board
to increase the level of disclosure and transparency to stockholders given Velan’s belief that the Company failed to adequately
respond to its series of questions and call for increased transparency on the Company’s first quarter 2019 earnings call
held on May 9, 2019.
-
On May 17, 2019, Velan filed amendment no. 1 to its preliminary proxy statement in connection with the
Annual Meeting.
REASONS FOR OUR SOLICITATION
IMMEDIATE CHANGE IS NEEDED AND WARRANTED
ON PROGENICS’ BOARD
As one of the largest
stockholders of Progenics, we have conducted extensive due diligence on the Company. In doing so, we have carefully analyzed the
Company’s operating and financial performance as well as the competitive landscape in the pharmaceutical industry in which
it operates.
We believe there
is significant value to be realized at Progenics. However, we have lost faith in the Board’s ability to oversee the Company
in a manner consistent with the best interests of stockholders. Specifically, we are deeply concerned with the Board’s persistent
track record of presiding over dismal stock price performance, commercial missteps, questionable clinical decision-making, a lack
of relevant management experience, limited public transparency, inefficient capital allocation and expense management, and poor
corporate governance, which we believe has resulted in significant value destruction for Progenics stockholders.
As experienced
investors and specialty pharmaceutical operators, we tried to work constructively with the Board to address our concerns as well
as the opportunities that we believe are available to drive value for the benefit of all Progenics stockholders. Given the seeming
lack of urgency in addressing our concerns and to preserve our rights as stockholders, we nominated a slate of director candidates
for election to the Board at the Annual Meeting. Unfortunately, the Board chose to invalidate our nomination on technical grounds
3
,
solidifying our belief that change is immediately required at Progenics.
Accordingly, we
are seeking your support to vote
AGAINST
the re-election of Peter J. Crowley and Michael D. Kishbauch as directors at the
Annual Meeting. By voting
AGAINST
Mr. Crowley, as Chairman of the Board who has overseen the destruction of significant
stockholder value and who we believe is largely responsible for the overall lack of accountability at Progenics and Mr. Kishbauch,
as Chairman of the Nominating and Corporate Governance Committee, who oversaw the rejection of our nomination of director candidates
for election at the Annual Meeting on a mere technicality, and who together represent the sole members of the Compensation Committee
that has approved, in our view, excessive compensation to Progenics directors and officers, stockholders will be sending a strong
message to the Board that they are dissatisfied with the status quo and that meaningful change is required.
We are Concerned with the Company’s
Dismal Stock Price Performance
We believe the Board,
under the leadership of Chairman Crowley, has failed to hold management accountable for the Company’s dismal stock price
performance. Since the height of the financial crisis in 2009, Mr. Crowley has managed to oversee the decline of Progenics’
share value during what has frequently been referred to as the longest bull market in our lifetimes. This speaks to underperformance
for not just years, but across decades.
As it relates to more recent history
and particularly during the past three years, the Company has substantially underperformed its peers and relevant indices, as
displayed in the following chart excerpted from the Company’s Annual Report on Form 10-K for the fiscal year ended December
31, 2018 (the “2018 10-K”).
3
On the date Velan submitted its nomination, it beneficially owned shares of Progenics in “street”
name. While Velan is currently a stockholder of record of Progenics, it was not a stockholder of record on the date it submitted
its nomination pursuant to the Company’s Bylaws.
It should also
be noted that when Messrs. Crowley and Kishbauch joined the Board in 2009 and 2013, respectively, Progenics’ share
price was higher than it was prior to our public involvement at the Company.
We are Concerned with the Lack
of Execution Surrounding AZEDRA’s Commercial Launch
We believe the Company’s
management team and Board have been unable to successfully execute on AZEDRA’s launch. AZEDRA was approved by the FDA in
July 2018, and as of March 2019, no patients had received therapy with AZEDRA (as disclosed on the Company’s Q4 2018 earnings
call on March 14, 2019). This is even more concerning given that AZEDRA has no FDA Orange Book patents – each day delayed
is another day lost of its FDA orphan drug exclusivity. Patients afflicted by pheochromocytoma or paraganglioma continue to take
an unapproved, compounded product while the Company’s management has been unable to get AZEDRA in the hands of physicians
and patients who need it.
We Question the Company’s
Clinical Program Decision-Making and Prioritization
Progenics acquired
Molecular Insight Pharmaceuticals, Inc. (“MIP”) and the rights to AZEDRA and development pipeline projects “1404”
and “1095” over six years ago, in January 2013. The early clinical results of 1095 covering subjects treated between
2011 and 2013 were published in July 2014 (Zechmann et al.) and March 2017 (Afshar-Oromieh et al.) and as of today, this remains
the most recent subject data referenced by the Company in its corporate presentation. Endocyte Inc., in contrast, acquired the
rights to a similar asset in October 2017, created substantial value in the platform within a year, and sold the business to Novartis
Pharmaceuticals Corporation for approximately $2.1 billion. Instead of focusing on 1095, we believe Progenics spent unnecessary
time and resources on other less-valuable projects.
Instead of harnessing
its potential first-mover advantage, Progenics is now behind a well-capitalized and well-entrenched competitor, which we believe
is a result of poor judgment and a lack of focus at the Company as well as a lack of effective oversight by the Board under Mr.
Crowley’s leadership. The current lack of urgency by Progenics is further exemplified by its 2018 10-K disclosure that 1095’s
current patent coverage expires from 2027 through 2031, with the 2027 composition of matter patent being the “most significant”
– this provides limited protection in the event of a potential 2026 commercial launch (Progenics’ disclosed commercial
milestone date in the 2018 10-K). We fear that continued mismanagement and distractions may further delay 1095 and continue to
erode stockholder value.
Limited Transparency and Openness
with Stockholders
In our view, one of the most important
obligations of a public company is to be open and transparent with its stockholders. We believe that Progenics could drastically
improve in this regard.
-
Commercialization
. We remain disappointed with the Company’s lack
of clarity around AZEDRA’s launch. Management has not provided any sales guidance and stockholders have waited patiently
for three quarters to see sales. Given the amount of time that has passed, we believe Progenics should have been (and should continue
to be) more transparent with its stockholders regarding the delay (outside of logistics) in providing product to patients and in
providing sales expectations and forecasts.
-
Regulatory Interactions
. Progenics has noted its FDA interactions in its
conference calls but has failed to disclose key items discussed with, and the resulting feedback from, the FDA. Given the potential
value inherent in its pipeline, specifically 1095, we believe Progenics should disclose to stockholders the nature of its discussions
with the FDA and any potentially material feedback received.
-
Manufacturing
. Progenics acquired a facility in Somerset, NJ in February
2019, and established a third-party manufacturing arrangement with International Isotopes, Inc. in April 2019. The Company has
not made any public announcement regarding its arrangement with International Isotopes. Why take these manufacturing initiatives
six months after FDA approval of AZEDRA? Why establish a “redundant” manufacturing arrangement when no patient has
been dosed and Progenics purchased the Somerset, NJ facility noting at the time it was capable of producing multiple products,
including AZEDRA? We believe Progenics should be forthright with stockholders and disclose the rationale and benefits (and timing
thereof) regarding its manufacturing arrangements.
-
Financial Profile
. The Company has failed to provide meaningful answers
to important questions related to the Company’s revenue and expense base. For example, what is the expected ramp of AZEDRA
sales? What is the cost of, and capacity covered by, the manufacturing arrangement with International Isotopes? What resources
are being expended on artificial intelligence projects and when should that turn profitable? How much does the Company plan to
spend to “dramatically expand the indications for AZEDRA”?
We are Concerned with Progenics’
Inefficient Capital Allocation and Expense Management
Progenics’
headquarters is comprised of a 26,000 square foot lease at One World Trade Center in New York City, one of the highest expense
cities in the world. We believe that prudent expense management, including evaluating lower cost alternatives and solid execution,
is more important than high-end office space, which we believe would ultimately translate into favorable returns to stockholders.
The Company reported
SG&A and development expenses, excluding one-time write-offs, in excess of $60 million in 2018. The accumulated deficit has
surpassed an astonishing $600 million. In addition, the Company filed a shelf registration statement in October 2018 to potentially
raise additional equity capital two months after the Company raised $75 million at $8.25 per share in the public markets. When
the Company filed its shelf registration, the share price had fallen more than 30% from its August pricing. We believe that finding
creative, non-dilutive ways to fund the business would be much more advantageous than continually issuing equity and diluting existing
stockholders.
We Believe There is a Lack of Relevant
Management Experience at Progenics
The Progenics management
team overview page states, “the drug development process is complex. Our management team offers deep expertise in all aspects
of the process to drive products toward commercialization.” As stated, the senior management team appears to have led “products
toward
commercialization” (emphasis added). However, outside of Bryce Tenbarge, the Company’s Senior Vice President,
Commercial, no other members of the management team have meaningful commercial launch experience or have held a commercial senior
leadership role in the pharmaceutical industry prior to joining Progenics. Mr. Tenbarge’s immediate experience prior to Progenics
was at a development-stage company, Celldex Therapeutics, which has yet to receive FDA approval for a single product. Moreover,
eventually bringing a product “toward commercialization” does not, in our view, address the amount of time lapsed during
that process. To compound this issue, prior to joining Progenics, Mr. Baker had zero operational experience within the pharmaceutical
industry yet he was appointed as CEO to lead a successful commercial pharmaceutical company.
Given the persistent
underperformance at Progenics, we question how the Board has seemingly failed to recognize the need to hire senior executives with
relevant experience necessary to run a specialty pharmaceutical company, and improve execution to a satisfactory level.
We are Concerned with the Company’s
Poor Corporate Governance Practices
We are seriously
concerned with the Board’s decision, under the direction of Messrs. Crowley and Kishbauch, as Chairman of the Board and Chairman
of the Nominating and Corporate Governance Committee, respectively, to invalidate our nomination on technical grounds. A stockholder’s
right to nominate director candidates is an important and long-standing part of the shareholder franchise. We exercised this right
because we believe change on the Board is required to address the Company’s persistent underperformance and operational failures
and to instill accountability in the boardroom.
Rather than seriously
address the concerns of one of its largest stockholders and acknowledge the real issues that we believe plague the Company, the
Board chose to invalidate our nomination of director candidates based on a technicality, which we believe serves to frustrate the
shareholder franchise, preserve the status quo and entrench the Board.
The Board’s
apparent failure to focus on the real issues facing the Company is also demonstrated by, in our view, the poor committee governance
at Progenics. In 2017, the Compensation Committee of the Board met more often than the Scientific Committee. In 2016, the Compensation
Committee met twice as often as the Scientific Committee. It appears to us that the Board, and in particular, Messrs. Crowley and
Kishbauch as sole members of the Compensation Committee, considers director and executive compensation to be a more pressing matter
than scientific advancement and clinical success. Further, we note that despite the Company’s poor performance, in 2018 and
2017, the Board received compensation in excess of $7 million in compensation (including Mr. Baker’s service as CEO), with
$2.8 million to non-executive directors, including over $800,000 to Mr. Crowley.
We believe it is time for Accountability
at Progenics and that Immediate Change is Required
For the reasons set for
above, we are seeking your support to vote
AGAINST
the re-election of
Messrs. Crowley and Kishbauch
as directors
at the Annual Meeting. By voting
AGAINST
Mr. Crowley, as Chairman of the Board who has overseen the destruction of significant
stockholder value, and Mr. Kishbauch, as Chairman of the Nominating and Corporate Governance Committee who oversaw the invalidation
of our nomination due to a mere technicality, and who together represent the sole members of the Compensation Committee that we
believe has approved excessive compensation to Progenics’ directors and officers, stockholders will be sending a strong message
to the Board that they are dissatisfied with the status quo and that meaningful change is required.
Furthermore, the Company
has a director resignation policy in place for uncontested elections, whereby each director submits a contingent resignation which
becomes effective if he or she fails to receive a sufficient number of votes for re-election at the Annual Meeting and the Board
accepts the resignation. The Nominating and Corporate Governance Committee will make a recommendation to the Board on whether to
accept or reject the resignation, or whether other action should be taken. The Board will act on the Nominating and Corporate Governance
Committee’s recommendation and publicly disclose its decision and the rationale behind it within 90 days from the date of
the certification of the election results. If our proxy solicitation results in any directors failing to receive a majority of
the votes cast for his election, then we believe it would clearly be inappropriate for any such director to continue to serve on
the Board. We believe the failure of the Board to accept any such resignations that may result from the Annual Meeting would be
an egregious violation of proper corporate governance, and in direct opposition to a clear stockholder directive.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Board is currently
composed of seven directors, all of whom are up for election at the Annual Meeting. For the reasons stated above, we are
seeking your support at the Annual Meeting to vote
AGAINST
the election of
Peter J. Crowley and Michael D. Kishbauch
.
The Company has adopted
a majority vote standard for uncontested elections. Since we are not proposing an alternate slate of directors, the election is
considered to be uncontested despite our opposition to two of the Progenics Nominees. According to the Company’s Bylaws (the
“Bylaws”), a majority of the votes cast means that the number of shares voted “for” a director must exceed
the number of shares voted “against” that director. The Bylaws also set forth a resignation policy for uncontested
elections, pursuant to which each director submits a contingent resignation which becomes effective if he or she fails to receive
a sufficient number of votes for re-election at the Annual Meeting and the Board accepts the resignation. The Nominating and Corporate
Governance Committee will make a recommendation to the Board on whether to accept or reject the resignation, or whether other action
should be taken. The Board will act on the Nominating and Corporate Governance Committee’s recommendation and publicly disclose
its decision and the rationale behind it within 90 days from the date of the certification of the election results.
Accordingly, if
we are successful in soliciting your support to vote
AGAINST
Messrs.
Crowley and Kishbauch
such that each of Messrs.
Crowley and Kishbauch receive more votes “against” his election than votes “for” his election at the Annual
Meeting, the Board, upon the Nominating and Corporate Governance Committee’s recommendation, must determine whether to accept
the resignations tendered by each Messrs. Crowley and Kishbauch.
Please note that
the Progenics Nominees are not the nominees of the Participating Stockholders, have not consented to be named in these proxy materials,
and are the nominees of Progenics. Because the Progenics Nominees are not the Participating Stockholders’ nominees and have
not consented to be named in this proxy statement, they are not participants in this solicitation. We can provide no assurance
that any of the Progenics Nominees will serve as directors if elected. The names, backgrounds and qualifications of the Progenics
Nominees, and other information about them, can be found in the Company’s proxy statement.
WE URGE YOU TO VOTE “AGAINST”
THE ELECTION OF PETER J. CROWLEY AND MICHAEL D. KISHBAUCH ON THE ENCLOSED GREEN PROXY CARD.
WE MAKE NO RECOMMENDATION
WITH RESPECT TO THE ELECTION OF THE OTHER PROGENICS NOMINEES.
PROPOSAL NO. 2
ADVISORY VOTE TO APPROVE THE COMPENSATION
OF THE COMPANY’S NAMED EXECUTIVE OFFICERS
As discussed in further
detail in the Company’s proxy statement, the Company is asking stockholders to indicate their support for the compensation
of the Company’s named executive officers. This proposal, commonly known as a “Say-on-Pay” proposal, is not intended
to address any specific item of compensation, but rather the overall compensation of the Company’s named executive officers
and the philosophy, policies and practices described in the Company’s proxy statement. The Company is therefore asking stockholders
to approve, on an advisory basis, the compensation of its named executive officers, as disclosed in the Company’s proxy statement
pursuant to the compensation disclosure rules of the SEC. Accordingly, the Company is asking stockholders to vote for the following
resolution:
“RESOLVED
,
that the compensation of the Company’s Named Executive Officers, as disclosed in the Company’s Proxy Statement for
the 2019 Annual Meeting of Stockholders, particularly in the Compensation Discussion and Analysis and compensation tables, is hereby
approved.”
According to the
Company’s proxy statement, the stockholder vote on the Say-on-Pay proposal is an advisory vote only, and it is not binding
on the Company, the Compensation Committee of the Board or the Board; however, to the extent there is any significant vote against
the Say-on-Pay proposal, the Compensation Committee and the Board will consider stockholders’ concerns and the Compensation
Committee will evaluate whether any actions are necessary to address those concerns.
WE RECOMMEND THAT YOU VOTE “AGAINST”
THIS SAY-ON-PAY PROPOSAL AND INTEND TO VOTE OUR SHARES “AGAINST” THIS PROPOSAL.
PROPOSAL NO. 3
RATIFICATION OF SELECTION OF ERNST
& YOUNG LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
As discussed in
further detail in the Company’s proxy statement, the Company is asking stockholders to ratify the selection of Ernst &
Young LLP as Progenics’ independent registered public accounting firm for 2019.
As disclosed in
the Company’s proxy statement, although stockholder ratification is not required by law, if the selection of Ernst &
Young LLP is not ratified by stockholders, the Audit Committee of the Board may reconsider the appointment.
WE MAKE NO RECOMMENDATION WITH RESPECT
TO THE RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP AS THE INDEPENDENT
registered
public accounting firm
OF THE COMPANY AND INTEND TO VOTE OUR SHARES “FOR” THIS PROPOSAL.
VOTING AND PROXY PROCEDURES
Stockholders are
entitled to one vote for each share of Common Stock held of record on the Record Date with respect to each matter to be acted on
at the Annual Meeting. Only stockholders of record on the Record Date will be entitled to notice of and to vote at the Annual Meeting.
Stockholders who sell their shares of Common Stock before the Record Date (or acquire them without voting rights after the Record
Date) may not vote such shares of Common Stock. Stockholders of record on the Record Date will retain their voting rights in connection
with the Annual Meeting even if they sell such shares of Common Stock after the Record Date. Based on publicly available information,
the Participating Stockholders believe that the only outstanding class of securities of the Company entitled to vote at the Annual
Meeting is the shares of Common Stock.
Shares of Common
Stock represented by properly executed
GREEN
proxy cards will be voted at the Annual Meeting as marked and, in the absence
of specific instructions, will be voted
AGAINST
the election of
Peter J. Crowley and Michael D. Kishbauch, ABSTAIN
on the election of Mark R. Baker and FOR the election of the other Progenics Nominees,
AGAINST
the approval of the advisory
vote on the compensation of the Company’s named executive officers and
FOR
the ratification of the selection of Ernst
& Young LLP as the Company’s independent registered public accounting firm for 2019.
This Proxy Statement
includes authority to vote for all Progenics Nominees, other than Messrs. Crowley, Kishbauch and Baker. Should you choose to vote
in favor of any of Messrs. Crowley, Kishbauch, or Baker you must use the Company’s proxy card. Please note that the Progenics
Nominees are not the nominees of the Participating Stockholders, have not consented to be named in this Proxy Statement, and are
the nominees of Progenics. The names, backgrounds and qualifications of the Progenics Nominees, and other information about them,
can be found in the Company’s proxy statement. We can provide no assurance that any of the Progenics Nominees will serve
as directors if elected.
QUORUM; BROKER NON-VOTES; DISCRETIONARY
VOTING
A quorum is the
minimum number of shares of Common Stock that must be represented at a duly called meeting in person or by proxy in order to legally
conduct business at the meeting. A majority of the issued and outstanding shares of Common Stock entitled to vote as
of the Record Date represented either in person or by proxy, is necessary to constitute a quorum for the transaction of business
at the Annual Meeting.
Abstentions are
counted as present and entitled to vote for purposes of determining a quorum. Shares represented by “broker non-votes”
also are counted as present and entitled to vote for purposes of determining a quorum. However, if you hold your shares in street
name and do not provide voting instructions to your broker, your shares will not be voted on any proposal on which your broker
does not have discretionary authority to vote.
If you are a stockholder
of record, you must deliver your vote by mail, attend the Annual Meeting in person and vote, vote by Internet or vote by telephone
in order to be counted in the determination of a quorum. If you are a beneficial owner, your broker will vote your shares pursuant
to your instructions, and those shares will count in the determination of a quorum.
VOTES REQUIRED FOR APPROVAL
Election of Directors
─ The Company has adopted a majority vote standard for uncontested elections. Since we are not proposing an alternate slate
of directors, the election is considered to be uncontested despite our opposition to two of the Progenics Nominees. Therefore,
the standard for director election will be by a “majority vote” as described herein. According to the Bylaws, a majority
of the votes cast means that the number of shares voted “for” a director must exceed the number of shares voted “against”
that director. The Company has indicated that since neither abstentions nor broker non-votes are considered to be “votes
cast,” they will not affect the outcome of the vote.
The Bylaws also
set forth a resignation policy for uncontested elections, pursuant to which each director submits a contingent resignation which
becomes effective if he or she fails to receive a sufficient number of votes for re-election at the Annual Meeting and the Board
accepts the resignation. The Nominating and Corporate Governance Committee will make a recommendation to the Board on whether to
accept or reject the resignation, or whether other action should be taken. The Board will act on the Nominating and Corporate Governance
Committee’s recommendation and publicly disclose its decision and the rationale behind it within 90 days from the date of
the certification of the election results.
Advisory Vote
on Executive Compensation
─ According to the Company’s proxy statement, although the vote is non-binding, a majority
of the votes cast at the Annual Meeting in person or by proxy is required to approve the compensation of the Company’s executive
officers. The Company has indicated that since neither abstentions nor broker non-votes are considered to be “votes cast,”
they will not affect the outcome of the vote.
Ratification
of the Appointment of Independent Registered Public Accounting Firm
─ According to the Company’s proxy statement,
a majority of the votes cast at the Annual Meeting in person or by proxy is required for ratification of the selection of Ernst
& Young LLP as the Company’s independent registered public accounting firm. The Company has indicated that since neither
abstentions nor broker non-votes are considered to be “votes cast,” they will not affect the outcome of the vote.
Under applicable
Delaware law, none of the holders of Common Stock are entitled to appraisal rights in connection with any matter to be acted on
at the Annual Meeting. If you sign and submit your
GREEN
proxy card without specifying how you would like your shares voted,
your shares will be voted in accordance with the Participating Stockholders’ recommendations specified herein and in accordance
with the discretion of the persons named on the
GREEN
proxy card with respect to any other matters that may be voted upon
at the Annual Meeting.
REVOCATION OF PROXIES
Stockholders of
the Company may revoke their proxies at any time prior to exercise by attending the Annual Meeting and voting in person (although
attendance at the Annual Meeting will not in and of itself constitute revocation of a proxy) or by delivering a written notice
of revocation. The delivery of a subsequently dated proxy which is properly completed will constitute a revocation of any earlier
proxy. The revocation may be delivered either to the Participating Stockholders in care of Okapi at the address set forth on the
back cover of this Proxy Statement or to the Company at One World Trade Center, 47th Floor, New York, NY 10007 or any other address
provided by the Company. Although a revocation is effective if delivered to the Company, we request that either the original or
photostatic copies of all revocations be mailed to the Participating Stockholders in care of Okapi at the address set forth on
the back cover of this Proxy Statement so that we will be aware of all revocations and can more accurately determine if and when
proxies have been received from the holders of record on the Record Date of a majority of the outstanding shares of Common Stock.
IF YOU WISH TO VOTE AGAINST THE
ELECTION OF PETER J. CROWLEY AND MICHAEL D. KISHBAUCH TO THE BOARD, PLEASE SIGN, DATE AND RETURN PROMPTLY THE ENCLOSED GREEN PROXY
CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED.
SOLICITATION OF PROXIES
The solicitation
of proxies pursuant to this Proxy Statement is being made by the Participating Stockholders. Proxies may be solicited by mail,
facsimile, telephone, Internet, in person and by advertisements.
Velan has entered
into an agreement with Okapi for solicitation and advisory services in connection with this solicitation, for which Okapi will
receive a fee not to exceed $[_____], together with reimbursement for its reasonable out-of-pocket expenses, and will be indemnified
against certain liabilities and expenses, including certain liabilities under the federal securities laws. Okapi will solicit proxies
from individuals, brokers, banks, bank nominees and other institutional holders. Velan has agreed to pay an additional discretionary
fee to Okapi, the amount of which is to be determined in the sole discretion of the Participating Stockholders, upon conclusion
of a proxy campaign. The Participating Stockholders have requested banks, brokerage houses and other custodians, nominees and fiduciaries
to forward all solicitation materials to the beneficial owners of the shares of Common Stock they hold of record. The Participating
Stockholders will reimburse these record holders for their reasonable out-of-pocket expenses in so doing. It is anticipated that
Okapi will employ approximately [__] persons to solicit stockholders for the Annual Meeting.
The entire expense
of soliciting proxies is being borne by the Participating Stockholders. Costs of this solicitation of proxies are currently estimated
to be approximately $[______]. The Participating Stockholders estimate that through the date hereof the expenses in connection
with this solicitation are approximately $[____]. The Participating Stockholders intend to seek reimbursement from the Company
of all expenses they incur in connection with this solicitation. The Participating Stockholders do not intend to submit the question
of such reimbursement to a vote of security holders of the Company.
ADDITIONAL PARTICIPANT INFORMATION
The participants
in this solicitation are Velan, Altiva, Mr. Venkataraman, Dr. Nohria, LTE, LTE Management, MCM, Mr. Melkonian, Mr. Cooke and Mr.
Sarpangal (collectively, the “Participants” and each a “Participant”). Velan is a private investment partnership
domiciled in Georgia. Altiva is a private investment adviser domiciled in Nevada. Mr. Venkataraman is an investor in the specialty
pharmaceutical industry. The principal business address of Velan, Altiva and Mr. Venkataraman is 1055b Powers Place, Alpharetta,
GA 30009. The principal occupation of Dr. Nohria is serving on the boards of various pharmaceutical companies. The principal business
address of Dr. Nohria is 120 Emerald Lane, Roswell, GA 30075. LTE is a private investment fund domiciled in Delaware, the principal
business of which is to acquire, hold, dispose of and otherwise invest in securities. LTE Management is a private company domiciled
in Delaware, the principal business of which is serving as the manager of LTE. MCM is a registered investment advisor domiciled
in Delaware, the principal business of which is to manage investment and trading activities of private investment funds, including
LTE. Mr. Melkonian is the Chief Investment Officer and Managing Member of MCM. Mr. Cooke is a Senior Managing Director of MCM.
The principal business address of LTE, LTE Management, MCM and Messrs. Melkonian and Cooke is 450 West 31st Street, 12th Fl.,
New York, NY 10001. The principal occupation of Mr. Sarpangal is serving as the Managing Member of Sarpa Holdings, a private investment
company. The principal business address of Mr. Sarpangal is 9 Toledo Court, Burlingame, CA 94010.
The following sets
forth the names and the number of shares of Common Stock of the Company beneficially owned by each of the Participating Stockholders.
All percentages are based on 84,542,514 shares of Common Stock outstanding as of April 25, 2019, as disclosed in Amendment No.
1 to the Company’s 2018 10-K.
|
|
|
|
|
Name
|
|
Number of Shares
of Common Stock
of the Company
Beneficially Owned
1
|
|
Percent of
Common Stock
of the
Company
|
Velan Capital, L.P.
|
|
|
|
[6,030,000]
2
|
|
|
|
[7.1]%
|
Altiva Management Inc.
|
|
|
|
[6,030,000]
3
|
|
|
|
[7.1]%
|
Balaji Venkataraman
|
|
|
|
[6,030,000]
4
|
|
|
|
[7.1]%
|
Virinder Nohria
|
|
|
|
[110,000]
|
|
|
|
[0.1]%
|
LTE Partners, LLC
|
|
|
|
[1,625,000]
5
|
|
|
|
[1.9]%
|
LTE Management, LLC
|
|
|
|
[1,625,000]
6
|
|
|
|
[1.9]%
|
Melkonian Capital Management, LLC
|
|
|
|
[1,625,000]
7
|
|
|
|
[1.9]%
|
Ryan Melkonian
|
|
|
|
[1,625,000]
8
|
|
|
|
[1.9]%
|
Terence Cooke
|
|
|
|
[0]
|
|
|
|
[0]%
|
Deepak Sarpangal
|
|
|
|
[0]
|
|
|
|
[0]%
|
|
1.
|
The Participating Stockholders have formed a “group” within the meaning of Section 13(d)(3) of the Exchange Act.
However, each of the Participating Stockholders expressly disclaims beneficial ownership of any securities in the table above other
than securities indicated as being beneficially owned by such individual or entity on the applicable row.
|
|
2.
|
Velan directly beneficially owns the shares of Common Stock reported herein as being beneficially owned by it. Velan may be
deemed to have sole power to vote or direct the vote of (and the sole power to dispose or direct the disposition of) such shares.
|
|
3.
|
Altiva, as the general partner of Velan, may be deemed to have sole power to vote or direct the vote of (and the sole power
to dispose or direct the disposition of) the shares of Common Stock directly beneficially owned by Velan.
|
|
4.
|
Mr. Venkataraman, as the sole shareholder of Altiva, may be deemed to have sole power to vote or direct the vote of (and the
sole power to dispose or direct the disposition of) the shares of Common Stock directly beneficially owned by Velan.
|
|
5.
|
LTE directly beneficially owns the shares of Common Stock reported herein as being beneficially owned by it. LTE may be deemed
to have sole power to vote or direct the vote of (and the sole power to dispose or direct the disposition of) such shares.
|
|
6.
|
LTE Management, as the sole manager of LTE, may be deemed to have sole power to vote or direct the vote of (and the sole power
to dispose or direct the disposition of) the shares of Common Stock directly beneficially owned by LTE.
|
|
7.
|
MCM, as the sole investment advisor to LTE, may be deemed to have sole power to vote or direct the vote of (and the sole power
to dispose or direct the disposition of) the shares of Common Stock directly beneficially owned by LTE.
|
|
8.
|
Mr. Melkonian, in his capacities as (i) the sole manager and majority member of LTE Management and (ii) the Chief Investment
Officer, Managing Member and majority owner of MCM, may also be deemed to have sole power to vote or direct the vote of (and the
sole power to dispose or direct the disposition of) the shares of Common Stock directly beneficially owned by LTE.
|
For information
regarding purchases and sales of securities of the Company during the past two years by certain Participants in this solicitation,
see
Schedule I
.
The Participants
and their associates and affiliates may effect purchases of shares of Common Stock through margin accounts maintained for them
with brokers, which extend margin credit as and when required to open or carry positions in their margin accounts, subject to applicable
federal margin regulations, stock exchange rules and such firms’ credit policies. Positions in shares of Common Stock may
be held in margin accounts and may be pledged as collateral security for the repayment of debt balances in such accounts. Such
margin accounts may from time to time have debit balances. In addition, since other securities may be held in such margin accounts,
it may not be possible to determine the amounts, if any, of margin used to purchase shares of Common Stock.
On May 1, 2019,
the Participants entered into a Joint Filing Agreement in which the Participants agreed to the joint filing on behalf of each of
them of statements on Schedule 13D with respect to the securities of the Company to the extent required by applicable law.
Except as set forth
in this Proxy Statement (including the Schedules hereto), (i) during the past 10 years, no Participant in this solicitation has
been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors); (ii) no Participant in this solicitation
directly or indirectly beneficially owns any securities of the Company; (iii) no Participant in this solicitation owns any securities
of the Company which are owned of record but not beneficially; (iv) no Participant in this solicitation has purchased or sold any
securities of the Company during the past two years; (v) no part of the purchase price or market value of the securities of the
Company owned by any Participant in this solicitation is represented by funds borrowed or otherwise obtained for the purpose of
acquiring or holding such securities; (vi) no Participant in this solicitation is, or within the past year was, a party to any
contract, arrangements or understandings with any person with respect to any securities of the Company, including, but not limited
to, joint ventures, loan or option arrangements, puts or calls, guarantees against loss or guarantees of profit, division of losses
or profits, or the giving or withholding of proxies; (vii) no associate of any Participant in this solicitation owns beneficially,
directly or indirectly, any securities of the Company; (viii) no Participant in this solicitation owns beneficially, directly or
indirectly, any securities of any parent or subsidiary of the Company; (ix) no Participant in this solicitation or any of his or
its associates was a party to any transaction, or series of similar transactions, since the beginning of the Company’s last
fiscal year, or is a party to any currently proposed transaction, or series of similar transactions, to which the Company or any
of its subsidiaries was or is to be a party, in which the amount involved exceeds $120,000; (x) no Participant in this solicitation
or any of his or its associates has any arrangement or understanding with any person with respect to any future employment by the
Company or its affiliates, or with respect to any future transactions to which the Company or any of its affiliates will or may
be a party; and (xi) no Participant in this solicitation has a substantial interest, direct or indirect, by securities holdings
or otherwise, in any matter to be acted on at the Annual Meeting.
There are no material
proceedings to which any Participant in this solicitation or any of his or its associates is a party adverse to the Company or
any of its subsidiaries or has a material interest adverse to the Company or any of its subsidiaries.
OTHER MATTERS AND ADDITIONAL INFORMATION
The Participating
Stockholders are unaware of any other matters to be considered at the Annual Meeting. However, should other matters, which the
Participating Stockholders are not aware of a reasonable time before this solicitation, be brought before the Annual Meeting, the
persons named as proxies on the enclosed
GREEN
proxy card will vote on such matters in their discretion.
STOCKHOLDER PROPOSALS
According to the
Company’s proxy statement for the Annual Meeting, any stockholder wishing to submit a proposal to be included in the Company’s
proxy statement for the 2020 Annual Meeting of Stockholders (the “2020 Annual Meeting”) pursuant to Rule 14a-8, must
deliver such proposal(s) to Progenics’ Corporate Secretary no later than [_______]. Stockholder proposals should be mailed
to the Corporate Secretary, Progenics Pharmaceuticals, Inc., One World Trade Center, 47th Floor, Suite J, New York, NY 10007.
In addition, according
to the Company’s proxy statement for the Annual Meeting, if the Company receives notice after that date of a stockholder’s
intent to present a proposal at the 2020 Annual Meeting, the Company has the right to exercise discretionary voting authority with
respect to such proposal, if presented at the meeting, without including information regarding such proposal in the Company’s
proxy materials.
Under the Company’s
Bylaws, any stockholder wishing to submit director nominees to be included in the Company’s proxy statement for the 2020
Annual Meeting pursuant to the Company’s proxy access provision of the Bylaws, must deliver written notice of such nomination
to Progenics’ Corporate Secretary no later than [_______].
In addition, under
the Company’s Bylaws, any director nomination or stockholder proposal of other business intended to be presented for consideration
at the 2020 Annual Meeting, but not intended to be considered for inclusion in the Company's proxy statement for the 2020 Annual
Meeting, must deliver written notice of such nomination or business proposal to Progenics’ Corporate Secretary no later
than [_______].
The information set
forth above regarding the procedures for submitting stockholder proposals for consideration at the 2020 Annual Meeting is based
on information contained in the Company’s Bylaws and the Company’s proxy statement for the Annual Meeting. The incorporation
of this information in this Proxy Statement should not be construed as an admission by the Participating Stockholders that such
procedures are legal, valid or binding.
INCORPORATION BY REFERENCE
WE HAVE OMITTED
FROM THIS PROXY STATEMENT CERTAIN DISCLOSURE REQUIRED BY APPLICABLE LAW THAT IS EXPECTED TO BE INCLUDED IN THE COMPANY’S
PROXY STATEMENT RELATING TO THE ANNUAL MEETING. THIS DISCLOSURE IS EXPECTED TO INCLUDE, AMONG OTHER THINGS, CURRENT BIOGRAPHICAL
INFORMATION ON THE COMPANY’S DIRECTORS, INFORMATION CONCERNING EXECUTIVE COMPENSATION, AND OTHER IMPORTANT INFORMATION. SEE
SCHEDULE II FOR INFORMATION REGARDING PERSONS WHO BENEFICIALLY OWN MORE THAN 5% OF THE SHARES AND THE OWNERSHIP OF THE SHARES BY
THE DIRECTORS AND MANAGEMENT OF THE COMPANY.
The information
concerning the Company contained in this Proxy Statement and the Schedules attached hereto has been taken from, or is based upon,
publicly available information.
Velan Capital, L.P.
|
|
|
_________ __, 2019
|
SCHEDULE I
TRANSACTIONS IN SECURITIES OF
THE COMPANY
DURING THE PAST TWO YEARS
Shares of Common Stock
Purchased / (Sold)
|
Date of
Purchase / Sale
|
VELAN
CAPITAL, L.P.
|
1,900
|
07/31/2018
|
500
|
08/02/2018
|
1,000
|
08/08/2018
|
500
|
08/09/2018
|
1,500
|
08/10/2018
|
500
|
08/14/2018
|
500
|
08/23/2018
|
500
|
09/11/2018
|
500
|
09/13/2018
|
1,000
|
09/14/2018
|
500
|
09/21/2018
|
1,000
|
10/05/2018
|
1,000
|
10/22/2018
|
1,000
|
10/26/2018
|
1,000
|
10/30/2018
|
16,000
|
11/27/2018
|
10,000
|
11/28/2018
|
12,500
|
11/29/2018
|
5,000
|
12/04/2018
|
5,000
|
12/07/2018
|
2,000
|
12/10/2018
|
2,000
|
12/17/2018
|
5,000
|
12/18/2018
|
5,000
|
12/21/2018
|
5,000
|
01/08/2019
|
5,000
|
01/10/2019
|
4,500
|
01/11/2019
|
2,500
|
01/14/2019
|
7,500
|
01/29/2019
|
5,000
|
01/31/2019
|
5,000
|
02/01/2019
|
20,000
|
02/07/2019
|
30,000
|
02/08/2019
|
40,000
|
02/11/2019
|
20,000
|
02/13/2019
|
20,000
|
02/14/2019
|
85,000
|
02/20/2019
|
35,000
|
02/21/2019
|
10,000
|
02/22/2019
|
120,000
|
02/25/2019
|
110,000
|
02/26/2019
|
100,000
|
02/27/2019
|
200,000
|
02/28/2019
|
100,000
|
03/01/2019
|
100,000
|
03/04/2019
|
50,000
|
03/05/2019
|
238,500
|
03/06/2019
|
200,000
|
03/07/2019
|
200,000
|
03/08/2019
|
150,000
|
03/11/2019
|
111,500
|
03/13/2019
|
414,349
|
03/14/2019
|
50,000
|
03/18/2019
|
100,000
|
03/19/2019
|
376,000
|
03/20/2019
|
220,700
|
03/21/2019
|
454,300
|
03/22/2019
|
50,000
|
03/25/2019
|
520,000
|
03/27/2019
|
52,900
|
03/28/2019
|
179,404
|
03/29/2019
|
126,400
|
04/01/2019
|
404,240
|
04/02/2019
|
101,707
|
04/03/2019
|
85,000
|
04/09/2019
|
75,100
|
04/10/2019
|
300,000
|
04/11/2019
|
100
|
04/12/2019
|
50,000
|
04/18/2019
|
22,302
|
04/23/2019
|
50,000
|
04/24/2019
|
54,571
|
04/29/2019
|
293,027
|
04/30/2019
|
VIRINDER
NOHRIA
|
50,000
|
02/20/2019
|
7,800
|
02/21/2019
|
2,200
|
02/21/2019
|
50,000
|
03/20/2019
|
LTE
PARTNERS, LLC
|
29,721
|
03/11/2019
|
37,575
|
03/12/2019
|
40,000
|
03/13/2019
|
42,000
|
03/14/2019
|
68,700
|
03/18/2019
|
44,800
|
03/19/2019
|
81,500
|
03/22/2019
|
47,000
|
03/26/2019
|
100,000
|
03/27/2019
|
20,000
|
03/28/2019
|
85,000
|
03/29/2019
|
33,600
|
04/01/2019
|
81,200
|
04/02/2019
|
125,000
|
04/03/2019
|
187,700
|
04/04/2019
|
31,204
|
04/05/2019
|
39,795
|
04/09/2019
|
176,405
|
04/17/2019
|
200,000
|
04/29/2019
|
68,378
|
04/30/2019
|
85,422
|
05/01/2019
|
SCHEDULE II
The following table is reprinted
from the Company’s proxy statement filed with the Securities and Exchange Commission on [____].
IMPORTANT
Tell the Board
what you think! Your vote is important. No matter how many shares of Common Stock you own, please give the Participating Stockholders
your proxy
AGAINST
the election of
Peter J. Crowley and Michael D. Kishbauch
and in accordance with the Participating
Stockholders’ recommendations on the other proposals on the agenda for the Annual Meeting by taking three steps:
|
●
|
SIGNING the enclosed
GREEN
proxy card;
|
|
●
|
DATING the enclosed
GREEN
proxy card; and
|
|
●
|
MAILING the enclosed
GREEN
proxy card TODAY in the envelope provided (no postage is required
if mailed in the United States).
|
If any of your
shares of Common Stock are held in the name of a brokerage firm, bank, bank nominee or other institution, only it can vote such
shares of Common Stock and only upon receipt of your specific instructions.
Depending upon your broker or custodian, you may
be able to vote either by toll-free telephone or by the Internet. Please refer to the enclosed voting form for instructions on
how to vote electronically. You may also vote by signing, dating and returning the enclosed
GREEN
voting form.
If you have any questions concerning this proxy statement,
would like to request additional copies of this proxy statement, or need help voting your shares, please contact our proxy solicitor:
Okapi Partners LLC
1212 Avenue of the Americas, 24th Floor
New York, NY 10036
(212) 297-0720
Stockholders may call toll-free: (888) 785-6673
Banks and brokers call: (212) 297-0720
E-mail: info@okapipartners.com
GREEN
PROXY CARD
PRELIMINARY COPY SUBJECT TO COMPLETION
DATED MAY 17, 2019
Progenics
Pharmaceuticals, Inc.
2019 ANNUAL MEETING OF
STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF
OF VELAN CAPITAL, L.P., ALTIVA MANAGEMENT INC., BALAJI VENKATARAMAN, VIRINDER NOHRIA, LTE PARTNERS, LLC, LTE MANAGEMENT, LLC, MELKONIAN
CAPITAL MANAGEMENT, LLC, RYAN MELKONIAN, TERENCE COOKE AND DEEPAK SARPANGAL (COLLECTIVELY, THE “PARTICIPATING STOCKHOLDERS”)
THE BOARD OF DIRECTORS OF
Progenics
Pharmaceuticals, Inc.
IS NOT SOLICITING THIS PROXY
P R O X Y
The undersigned
appoints Balaji Venkataraman, Steve Wolosky and Patrick McHugh, and each of them, attorneys and agents with full power of substitution
to vote all shares of common stock of Progenics Pharmaceuticals, Inc. (the “Company”) which the undersigned would
be entitled to vote if personally present at the 2019 Annual Meeting of Stockholders of the Company scheduled to be held at [____],
on [____], 2019 at [_____] (including any adjournments or postponements thereof and any meeting which may be called in lieu thereof,
the “Annual Meeting”).
The undersigned
hereby revokes any other proxy or proxies heretofore given to vote or act with respect to the shares of common stock of the Company
held by the undersigned, and hereby ratifies and confirms all action the herein named attorneys and proxies, their substitutes,
or any of them may lawfully take by virtue hereof. If properly executed, this Proxy will be voted as directed on the reverse and
in the discretion of the herein named attorneys and proxies or their substitutes with respect to any other matters as may properly
come before the Annual Meeting that are unknown to the Participating Stockholders a reasonable time before this solicitation.
STOCKHOLDERS
ARE ADVISED THAT THE COMPANY NOMINEES ARE NOT THE NOMINEES OF THE PARTICIPATING STOCKHOLDERS, HAVE NOT CONSENTED TO BE NAMED IN
THESE PROXY MATERIALS, AND ARE THE NOMINEES OF THE COMPANY. BECAUSE THE COMPANY NOMINEES ARE NOT THE PARTICIPATING STOCKHOLDERS’
NOMINEES AND HAVE NOT CONSENTED TO BE NAMED IN THIS PROXY STATEMENT, THEY ARE NOT PARTICIPANTS IN THIS SOLICITATION.
IF NO DIRECTION
IS INDICATED WITH RESPECT TO THE PROPOSALS ON THE REVERSE, THIS PROXY WILL BE VOTED “AGAINST”
the
election of Peter J. Crowley and Michael D. Kishbauch, “ABSTAIN” ON THE ELECTION OF MARK R. BAKER AND “FOR”
the election of the other Progenics Nominees
,
“AGAINST” PROPOSAL 2 AND “FOR” PROPOSAL 3.
IMPORTANT: PLEASE SIGN, DATE AND
MAIL THIS PROXY CARD PROMPTLY!
CONTINUED AND TO BE SIGNED ON REVERSE
SIDE
GREEN
PROXY CARD
[X] Please mark vote as in this example
The
Participating Stockholders
STRONGLY RECOMMEND THAT
STOCKHOLDERS
VOTE AGAINST
the election of PETER J. CROWLEY AND MICHAEL D. KISHBAUCH and
MAKE NO RECOMMENDATION
WITH RESPECT TO
the election OF the COMPANY’s other Nominees
.
The
Participating Stockholders
RECOMMEND THAT STOCKHOLDERS VOTE AGAINST PROPOSAL 2 AND MAKE NO RECOMMENDATION WITH RESPECT
TO PROPOSAL 3.
1. Election of Directors
Peter J. Crowley
|
¨
AGAINST
|
¨
ABSTAIN
|
|
|
|
Michael D. Kishbauch
|
¨
AGAINST
|
¨
ABSTAIN
|
|
|
|
Mark R. Baker
|
¨
AGAINST
|
¨
ABSTAIN
|
|
|
|
All Other Company Nominees
|
|
|
FOR
ALL OTHER COMPANY NOMINEES
|
ABSTAIN ON ALL OTHER COMPANY NOMINEES
|
FOR ALL OTHER COMPANY NOMINEES, EXCEPT
NOMINEE(S) WRITTEN BELOW
*
|
¨
|
¨
|
¨
_____________
_____________
|
*Note: If you mark the “FOR ALL OTHER
COMPANY NOMINEES, EXCEPT NOMINEE(S) WRITTEN BELOW” box, your shares will be voted “ABSTAIN” on any such nominee(s)
written in the line(s) below this box and “FOR” the remaining nominees.
2.
Approval, on an advisory basis, of the compensation of the Company’s named executive officers.
|
¨
FOR
|
|
¨
AGAINST
|
|
¨
ABSTAIN
|
3. Approval of the ratification of the Board’s
selection of Ernst & Young LLP to serve as the Company’s independent registered public accounting firm for 2019.
|
¨
FOR
|
|
¨
AGAINST
|
|
¨
ABSTAIN
|
DATED: ____________________________
____________________________________
(Signature)
____________________________________
(Signature, if held jointly)
____________________________________
(Title)
WHEN SHARES ARE HELD JOINTLY, JOINT OWNERS
SHOULD EACH SIGN. EXECUTORS, ADMINISTRATORS, TRUSTEES, ETC., SHOULD INDICATE THE CAPACITY IN WHICH SIGNING. PLEASE SIGN EXACTLY
AS NAME APPEARS ON THIS PROXY.
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