CrabTree Partners wants Elan to remove CEO and executives, citing poor managementNEW YORK (Associated Press) - Elan Corp. investor CrabTree Partners called for the removal of Chief Executive Kelly Martin and key changes in management and structure Friday because of what it called "gross incompetence."
In a letter to Ireland-based Elan's board of directors, CrabTree co-founder Jack Schuler said the biotechnology company's performance has been unacceptable. American Depository Shares have fallen about 67 percent since the beginning of 2008. Schuler, who is also a former president of Abbott Laboratories, blames management for a failure to gain ground in the multiple sclerosis and Crohn's disease market with the company's key drug Tysabri.
Tysabri sales have been hurt by cases of multiple-sclerosis patients with a brain infection called progressive multifocal leukoencephalopathy, or PML. Regardless of the PML cases, Schuler said, Tysabri should be gaining ground in its respective markets.
Elan and partner Biogen Idec Inc. reported two cases of PML in August and a third case in November. The risks, though, were already on the drug's label, as it had been pulled from the market in 2005 after being linked to PML, then reintroduced under restricted sales conditions in mid-2006.
He would also like to see better management of company funds and took issue with the CEO's use of a corporate jet.
"I know of no other biotech company that has corporate jets, yet alone a small, struggling one," Schuler said in his letter to the board.