"HealthMed Denies Charge of Lidak Hostile Takeover" by Marion Webb Staff Writer
Proxy Filing for Three Board Candidates Could Lead to Control of Biotech
HealthMed Inc.'s director denies charges made last week of an attempted hostile takeover of San Diego-based Lidak Pharmaceutical Inc.
In a March 16 Securities and Exchange Commission (SEC) proxy filing, HealthMed President Mitchell Stein and former Lidak CEO David Katz proposed three "independent candidates" to replace Lidak's current board members at next month's annual meeting.
HealthMed's filing was made after negotiations over a controversial financial proposal to lan Lidak $130 million were abruptly terminated. Those talks led Lidak's board members to fire Katz.
Replacing three of Lidak's board members, together with Katz's seat, would allow the Beverly Hills-based health care consultant firm to gain control of Lidak's seven-member board.
Critics of the filing said it was an attempt at a hostile takeover.
However, Stein denies any affiliation with the proposed candidates or alignment with Katz, who sold more than 300,000 common shares to healthMed in January.
"The current board (at Lidak) has viewed HealthMed aligned with Katz, but now they are confused, because we elected an independent board of directors," Stein said.
HealthMed's proposed candidates to replace Lidak's current board members up for re-election are Dr.Wallace O. Raubenheimer, 72, George P. Rutland, 65, and Edward Hennessy, 70.
According to the proxy, Raubenheimer's principal occupation is investments. He currently holds 618,702 Lidak shares.
Raubenheimer was president of Protective Packaging Corp. from 1992 to 1996. Before that, he was president and CEO of Cardinal Paper Box Co. in Clinton, N.J.
Rutland is the current CEO and chairman of the board of directors at Taipan Corp. He iss also a member of the board of directors of Hemet Federal Bank.
A retired senior banking execuative, Rutland also served as CEO at Northeast Federal Corp. and Northeast Savings Bank in Hartford, Conn.
Rutland currently owns 100,000 Lidak shares, according to the SEC.
The third candidate, Edward Hennessy, was CEO of Allied-Signal Inc. for 12 years. He also was executive vice president and a board member at United Technologies Corp., senior vice president for administration and finance for Heublein, Inc., and controller with IT&T Corp.
Hennessy does not have a stake in Lidak. Gerald J. Yakatan, Katz's successor at Lidak, said it will be up to the shareholders to make a decision.
"The current board is important to me," he said. "They made a decision to terminate the CEO and agreed to stay on to ensure some continuity for the companh's shareholders."
Yakatan said none of HealthMed's candidates "have any pharmaceutical experience."
HealthMed said early in January its $130 million loan offer to Lidak was conditioned upon Lidak's "board restructuring."
Stein said it was HealthMed that "jumpstarted Lidak's board" and prompted members to evaluate the market for Lidak's topical anti-herpes drug, Lidakol.
Lidak filed for the drug's approval with the Federal Drug Administration in December.
But, HealthMed's "frustration" with Lidak's board members led HealthMed to terminate talks March 3, Stein said.
He added the election of the new candidates would "open negotiations" and allow "lidak to become a more successful company much more quickly."
HealthMed owns nearly 2.2 million Lidak shares, which represents 5.4 percent of the outstanding shares, Katz, who founded Lidak in 1988, remains the company's largest shareholder with a 8.1 percent stake. Yakatan did not rule out a proxy fight but hopes to come to an agreement.
"we have to wait and see what happens," he said.
Lidak's annual meeting is scheduled for April 18.
It would be like sending these guys not to school at age 72 not to basic training but directly into battle.
Its bad business.Can you picture any of these guys throwing together an NDA in four months or planning a phaseIII trial or flying around the world knocking on doors and giving presentations all over trying to sell and or find a partner for lidak??? you want to IMPROVE on the present situation not make it worse.
I can see a conga line forming at the shareholder meeting... katz up front with a wheelbarrow full of proxies then mr stein and the three aging excexs with little sacks of proxies... doing the conga all the way up on stage... geeeezzzzz.....Another hosed up trade..... you and I are contemporaries and security is a goal. need these investments to perform.
Mr Hennesy a few words please? aaaaahhhh who am I what am I doing?
I think they are still talking and... we will see soon enough if they can patch it all up or not? But you are right the energy that this company needs is not much in evidence... other than for the prompt re-test and other phase testing and prompt filing last year. I mean they were on fire in 97. Katz was concentrating
on his lab work... then they self destructed in 98. go figure.
Thank you Luis,
Yes I do agree. We need board members that have been exposed to the Bio-Tech world in one way or another. Lets face it,
business is just that...business. I do not intend to mock the geriatric population, but as a professional in the Health care field, I
primary work with the geriatric population. These gentlemen might come with a abundance of business experience that was revalent
30-40 years ago, but I know for myself being already 39 years of age in June....I'm having a difficult time trying to catch up
with all this technology that did not exist in my time. I'm still catching up with the intendo world. :) We as shareholders need
young blood with energy. Believe me, I know plenty of physician's in this age group...that require nap time come mid afternoon. As
with these potential board members?
Why are they no longer CEO's, presidents of modern day companies?
Someday, we will be faced with the same issues...age discrimation...as for myself and my retirement money, I want the best
candidates that money can find. These gentlemen have made there profits over the years. Get lost. Lets move on to a vibrant group of
men/woman...who will work for the money...BECAUSE WERE IN THE SAME PADDLE BOAT! WE WANT FINANCIAL SECURITY FOR OUR FUTURE!!!! What do these
guys have to lose? Our money. Once again, they already made there profits. If these guys stroke out, hemorrage, rupute the hearts
apex...where do we stand? It's at our expense.
P.S. Luis, I admire you for your intelligence and guts!
How shall I vote my 100,000 + shares? Can anyone give me reasons to vote for Healthmed's slate of directors? i DONT WANT TO HEAR ANY NEGATIVE STATEMENTS RE: LIDAK'S BOOARD. JUST POSITIVE REASONS WHY I SHOULD VOTE FOR HEALTHMED. ANYONE?????
I hope the article helps you guys. There has to be some laughter at times...cause this can really drive you nuts. But,
not that this is always true (Dementia sets in at age 70), but did you take a look at the age of these guys that are running for the board seats? LOL...I mean, come on now...these older gentlemen might be good...once again...but.....LOL....
thanks for staying with the play. I can see these guys jetting into Palomar from Palm Beach and other places.. and limos to the Hilton complete with I.V's etc... Mr Stein oily hair twisting his mustache in little curls... and dc katz wearing a little red riding hood outfit... while the board is dressed as you guessed it wolves..