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Dendreon(DNDN) is holding its annual shareholder meeting today in New Jersey. Management and directors are facing some tough questions about who should be held responsible and accountable for Provenge's commercial troubles and the stock's poor performance.
Brad Loncar, a Dendreon shareholder who has
previously agitated for change at the troubled company, is attending today's meeting and tweeting about it:
$DNDN this was the question I asked publicly at the ASM today: This year Dendreon had one director who chose (cont)
tl.gd/n_1rjtfs5— Brad Loncar (@bradloncar)
April 22, 2013
The full text of Loncar's question:
This year Dendreon had one director who chose not to stand for reelection to the board, but there are two, Douglas Watson and Bogdan Dziurzynski, who did decide to go ahead and stand today. My question is for them: Three years ago when you last stood for reelection, Dendreon's stock price was $43.16. Today it is $4.57, a decline of 89%. Three years ago Dendreon was hiring, and would soon employ over 2,000 people. Today, the company has laid-off or displaced about 1,000 of them. Three years ago Dendreon was respected in the investment community. Today its reputation has deteriorated so badly that one of the industry's most highly-regarded analysts, Mark Schoenebaum, last month took the rare step of publicly apologizing for ever backing this company... calling it the worst decision of his entire career. In terms of shareholders, not only have you lost nearly all their money over those three years, but during that time you have also settled two lawsuits with them totaling over $56 million dollars. Finally, in terms of Dendreon's relationship with its regulators, the company has gone through three general counsels in those three years, and your disclosure practices have led to a formal investigation by the SEC...an embarrassing and unnecessary distraction for a company that should be 100% focused on its commercial activities. So given that track record, my questions to you Mr. Watson and Dr. Dziurzynski are: (a) do you think Dendreon could have done better and (b) why do you think you should be running for reelection again?
Fantastic question! Dendreon's response, sadly, was underwhelming, as Loncar recounts:
adamfeuerstein They both stood up and essentially said they still believe in the company. Didn't say why they were the right people to lead— Brad Loncar (@bradloncar)
April 22, 2013
adamfeuerstein My thought was everyone in this room believes in it too, but we aren't the ones who have squandered the opp'ty so badly.— Brad Loncar (@bradloncar)
April 22, 2013
Corporate governance at U.S. companies today means lifetime seats and extravagant pay packages for directors. There seems to be no level of mismanagement or stock underperformance that gets incompetent directors fired.
That's too bad, but kudos to Loncar for trying.
-- Reported by Adam Feuerstein in Boston.Follow @AdamFeuerstein