PRTK - Paratek investor NexPoint warns it may vote against takeover deal

2023-06-27 13:05:04 ET

Paratek Pharmaceuticals ( NASDAQ: PRTK ) investor NexPoint Asset Management said that it may vote against the biotech company's planned takeover by Gurnet Point Capital if it determines that sale is not in the interest of stockholders.

NexPoint, which says it holds around 12% of Paratek's common stock, said it is "carefully scrutinizing" the board's process for agreeing to the deal, which it says "upon preliminary review appears to grossly overcompensate company leadership to the detriment of stockholders."  The firm added that it was waiting for additional materials to be filed by the company before making a determination.

NexPoint also said it plans to withhold its votes for three board members standing for election, in part "over serious concerns with the board's lack of oversight in holding management accountable for years of underperformance."

The firm said it was particularly dissatisfied with Paratek's weaker-than-expected revenues since the approval of its lead drug Nuzyra, which it attributed to "senior management's inability to execute its sales plan." The antibiotic received US regulatory approval in 2018.

Paratek's annual meeting is scheduled for July 6, according to NexPoint.

In response, Paratek acknowledged Tuesday that it had received NexPoint's letter . It added that while it  "appreciates receiving constructive feedback from its stockholders," its board "respectfully disagrees with NexPoint’s characterizations contained in its letter." Paratek said it plans to provide additional details about the takeover deal when it files its proxy materials with the SEC.

Earlier this month, Paratek announced it had agreed to be taken private by Gurnet and Novo Holdings, the investment arm of the Novo Nordisk Foundation, for up to approximately $462M.

Under the deal, the investment firms will pay $2.15 per share in cash upfront. Shareholders will also receive contingent value rights worth $0.85 per share payable if Nuzyra achieves US net sales of $320M in any calendar year before 2027 .

More on Paratek:

• Paratek Pharmaceuticals to be taken private in deal worth up to $462M
• Paratek Pharmaceuticals jumps amid report about takeover interest
• Paratek a new buy at Jefferies on growing antibiotics business

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