BioCentury
ARTICLE | Company News

XenoPort investor wants new CEO, strategy

October 15, 2013 11:15 PM UTC

XenoPort Inc. (NASDAQ:XNPT) investor Clinton Group Inc. said the biotech's CEO Ronald Barrett should resign and called for a shift in the company's focus to XP23829, which is in Phase I testing for relapsing-remitting multiple sclerosis (RRMS) and in preclinical development for psoriasis. In a letter to Barrett, Clinton Group said XenoPort's Horizant gabapentin enacarbil -- which is approved in the U.S. to treat restless legs syndrome (RLS) and to manage postherpetic neuralgia (PHN) -- "will never be the commercial success we all wish it were." The activist investor said XenoPort should use its remaining cash to advance XP23829 in the clinic, which could "garner a significantly improved partnering deal" or a sale of XenoPort. The investor said XP23829 -- an oral prodrug of monomethyl fumarate (MMF) that induces and activates the nuclear factor (erythroid-derived 2)-like 2 ( NRF2) pathway -- "presents a massive commercial opportunity." At June 30, XenoPort had $93.4 million in cash and a six-month operating loss of $47.8 million (see BioCentury, Oct. 15, 2012).

Clinton Group -- which has a 2.7% stake in XenoPort -- also said it believes the fair value of XenoPort is $13-$16 per share and that the shares are undervalued due to a lack of confidence in the biotech's management. XenoPort, which did not return multiple requests for comment, was up $0.33 to $6.02 on Tuesday. ...