XenoPort, Inc. (Nasdaq: XNPT) today announced that it is mailing a letter to stockholders in connection with the Company’s upcoming Annual Meeting, which will be held on June 11, 2014. In the letter, XenoPort urges stockholders to protect the value of their investment by voting “FOR ALL” of XenoPort’s nominees to the Board of Directors on the WHITE proxy card. Highlights of the letter include:
- XenoPort is advancing XP23829;
- XenoPort is building value in HORIZANT;
- XenoPort’s Board is committed to fully realizing the value of XenoPort’s assets – for the benefit of all XenoPort stockholders;
- Clinton is waging a misleading proxy campaign to replace three of XenoPort’s proven, highly-qualified directors with three of its own handpicked nominees; and
- XenoPort believes Clinton’s uninformed agenda would fail to maximize the value of XenoPort’s assets. XenoPort believes Clinton’s agenda is short-term focused and puts at risk the opportunity for long-term value creation.
Our ability to realize the value of XenoPort’s assets was exemplified recently by our May 15 th announcement of a development and commercialization partnership with Reckitt Benckiser Pharmaceuticals, Inc. for XenoPort’s arbaclofen placarbil program. Upon effectiveness of the agreement, which is subject to regulatory clearance, XenoPort will receive:
- A $20 million up-front, non-refundable cash payment;
- Plus, $5 million upon the transfer of certain technology and materials to Reckitt Benckiser;
- Plus, up to $120 million of aggregate cash payments upon the achievement by Reckitt Benckiser of certain development, regulatory and commercial milestones;
- Plus, certain royalty payments on potential future net sales in and outside the United States.
- HORIZANT is differentiated in the market place. We encourage stockholders to read the FDA prescribing information, published clinical studies and treatment guidelines.
- Results of XenoPort’s promotional efforts in just the first three full quarters since we re-acquired HORIZANT’s rights demonstrate that our confidence in HORIZANT’s potential is justified.
- Initial investments in HORIZANT’s commercial infrastructure are complete, and marketing budgets are largely committed. Now is the worst time to abandon commercialization, particularly given the upward sales trends we are achieving.
- Capturing the most value from HORIZANT will require that we continue to demonstrate strong prescription trends.
- We urge you to carefully read Clinton’s proxy materials. Buried in the footnotes is the fact that many of the analyst reports cited by Clinton were issued more than one year ago – before XenoPort had executed its own promotional efforts for HORIZANT.
- More recently, since the time we launched our strategy, analysts have said:*
- The aggregate investment in a product candidate is a function of the stage of development of that product candidate. We have been fully investing in XP23829 and executing a thoughtful development plan that is appropriate for its stage of development.
- More than simple investment, moving successfully through the drug development and regulatory review process also requires experience and technical expertise – expertise possessed by members of your Board and management team.
- We are proud of the achievements we have made in our advancement of XP23829 development, our efforts to offer HORIZANT to patients as a new treatment option and the early commercial progress we have made with HORIZANT.
- These achievements are a consequence of disciplined, thoughtful development and commercial programs and capital allocation established by XenoPort’s leadership.
- Due to the inherent risk of drug development, allocating all of our resources to XP23829, a product candidate that has only completed Phase 1 development, would be irresponsible and contrary to our fiduciary duties.
- Your Board is comprised of nine, highly-qualified and proven leaders, including eight independent directors.
- Contrary to the factual errors in Clinton’s proxy materials, three new directors have joined XenoPort’s Board in the past five years.
- The average tenure of XenoPort’s directors is 8.7 years versus an average of approximately 10.1 years for the S&P 500; approximately 10.8 years for the S&P 1500; approximately 10.7 for the S&P MidCap index; and approximately 11.5 years for the S&P SmallCap index.1
- As a XenoPort founder, former Chief Scientific Officer, and current Chief Executive Officer, Dr. Barrett has played, and will continue to play, a pivotal role in executing XenoPort’s strategy.
- Dr. Barrett’s work led to XenoPort’s discovery and development of numerous novel product candidates, including XP23829 and the recently partnered arbaclofen placarbil. His leadership and efforts have enabled XenoPort to evolve from a pure research-based company to an integrated pharmaceutical company with development and commercialization capabilities.
- Dr. Barrett has the full confidence of XenoPort’s Board.
- Clinton’s plan would create a void in leadership just as the Company is about to start its Phase 2 trial for XP23829, is in discussions with potential partners, and is at an important inflection point in its commercialization efforts of HORIZANT.
- As a result of her work on complex accounting issues as well as her 30 years of finance, marketing and investment expertise, including 20 years as Chief Financial Officer of both private and public companies, Ms. Hilleman, your Audit Committee Chair, possesses important financial experience and knowledge of XenoPort’s financials that would be difficult to replace.
- As we work to advance XP23829 and build value in HORIZANT, XenoPort greatly benefits from Dr. Wierenga’s proven record and experience in pharmaceutical research and clinical development. In addition to his leadership at pharmaceutical and biopharmaceutical companies and his service on the Boards for several publicly-traded biopharmaceutical companies, Dr. Wierenga has participated in the submission of over 70 Investigational New Drug applications, the filing of 16 New Drug Applications/Biologics License Applications, and the launch of 16 FDA-approved drug products including LIPITOR, NEURONTIN and UCERIS.
- As previously noted above, as a XenoPort founder, former Chief Scientific Officer, and current Chief Executive Officer, Dr. Barrett has played, and will continue to play, a pivotal role in executing XenoPort’s strategy.
- Clinton claims its nominees have experience in biotech, capital allocation and corporate governance. However, this expertise is already well represented on your Board by multiple directors all of whom, unlike Clinton’s nominees, also have experience serving in senior operating roles of biopharmaceutical companies and as directors of publicly-traded companies.
|/s/ Ronald W. Barrett||/s/ John G. Freund|
|Ronald W. Barrett, Ph.D.||John. G. Freund, M.D.|
|Chief Executive Officer||Lead Independent Director|
- 2010-13: Completed preclinical studies, including comparison of the pharmacokinetics and safety of XP23829 with the active ingredient in TECFIDERA
- Sep 2013: Completed the last of three Phase 1 studies
- Demonstrated favorable pharmacokinetics compared to TECFIDERA and pharmacodynamic effects with once-a-day dosing
- Dec 2013: Received FDA feedback on a series of submitted questions related to development plans for XP23829 as a potential treatment of relapsing forms of MS
- Jan 2014: Expanded team with proven expertise
- Richard Kim, M.D., Senior VP, Clinical Development and Medical Affairs and Chief Medical Officer
- More than 10 years of experience in clinical development and medical affairs, including as VP of clinical development and head of MS therapeutic area at Elan Pharmaceuticals
- 1Q 2014: Conducted a Pre-Investigational New Drug (IND) meeting with the FDA, submitted IND application, and prepared to initiate a Phase 2 trial in psoriasis patients by mid-2014
- May 2013: Reacquired commercialization rights after prior partner missed key metrics for performance against their HORIZANT commercialization plan
- Jun 2013: Initiated promotional efforts
- Dec 2013: With substantially fewer resources, achieved levels of prescribed tablets that surpassed results of previous partner
- Apr 2014: Presented new data at Annual Scientific Meeting of the American Pain Society and at the Annual Meeting of the American Academy of Neurology
- New data analyses support HORIZANT’s benefit/risk profile
- May 2014: Announced positive prescription trends for 1Q 2014
- 15% increase in nationwide prescribed tablets compared to 4Q13; 25% increase compared to 1Q13
- 21% increase in total prescribed tablets in promoted territories compared to 4Q13; 64% increase compared to 1Q13 If you have any questions, require assistance withvoting your WHITEproxy card or need additional copies of the proxy materials, please contact:MACKENZIE PARTNERS, INC. 105 Madison AvenueNew York, NY 10016 firstname.lastname@example.org(212) 929-5500 (Call Collect)OrTOLL-FREE (800) 322-2885
Important Additional Information and Where to Find ItXenoPort, Inc., its directors and certain of its executive officers may be deemed to be participants in the solicitation of proxies from stockholders in connection with XenoPort’s 2014 Annual Meeting of Stockholders. XenoPort has filed with the SEC and provided to its stockholders a definitive proxy statement and a WHITE proxy card in connection with such solicitation. XENOPORT STOCKHOLDERS ARE STRONGLY ENCOURAGED TO READ THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS AND SUPPLEMENTS) AND THE ACCOMPANYING WHITE PROXY CARD, AND ANY OTHER RELEVANT DOCUMENTS WHEN THEY BECOME AVAILABLE, BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Information regarding the names of XenoPort’s directors and executive officers and their respective interests in XenoPort by security holdings or otherwise is set forth in XenoPort’s definitive proxy statement for the 2014 Annual Meeting of Stockholders, filed with the SEC on April 22, 2014, including Appendix B thereto. The definitive proxy statement (and amendments or supplements thereto) and the accompanying WHITE proxy card, and any other relevant documents and other material filed by XenoPort with the SEC, are or will be available for no charge at the SEC’s website at www.sec.gov and at XenoPort’s investor relations website at http://investor.xenoport.com/index.cfm. Copies may also be obtained free of charge by contacting XenoPort Investor Relations by mail at 3410 Central Expressway, Santa Clara, California 95051 or by telephone at (408) 616-7200. About XenoPort XenoPort, Inc. is a biopharmaceutical company focused on developing and commercializing a portfolio of internally discovered product candidates for the potential treatment of neurological disorders. XenoPort is currently commercializing HORIZANT ® (gabapentin enacarbil) Extended-Release Tablets in the United States and developing its novel fumaric acid ester product candidate, XP23829, as a potential treatment for patients with moderate-to-severe chronic plaque type psoriasis and/or relapsing forms of multiple sclerosis. REGNITE ® (gabapentin enacarbil) Extended-Release Tablets is being marketed in Japan by Astellas Pharma Inc. XenoPort's pipeline of product candidates also includes a potential treatment for patients with Parkinson's disease. To learn more about XenoPort, please visit the website at www.XenoPort.com. XNPT2G
1 Source: ISS, “Director Tenure and Corporate Governance Features,” By Rob Yates, March 25, 2014.