ISS backs two of three of activist's board nominees at Ziopharm Oncology

Rebecca Spalding
·2-min read

By Rebecca Spalding

Nov 25 (Reuters) - Proxy adviser Institutional Shareholder Services (ISS) said that Ziopharm Oncology Inc shareholders should elect two of the three board members proposed by WaterMill Asset Management Corp, after the investor earlier urged the biotechnology company to oust half of its board.

ISS reccomended that WaterMill nominees, Jaime Vieser and Holger Weis, be added to the board and the that company's chairman, Scott Tarriff, and another director be removed.

Earlier this month, Ziopharm asked shareholders to resist calls from WaterMill to remove four of its eight board members, saying the actions of the investor were self serving.

On Nov. 16, the company appointed a new board member, Mary Thistle, who is a special advisor for the Bill & Melinda Gates Medical Research Institute. At the time, the company said her appointment was a reflection of its commitment to refresh the board with "a diverse set of highly qualified individuals."

WaterMill criticized the appointment in its own materials, citing prior connections with other board members.

WaterMill has said that the need for a board shakeup was "crystal clear" after the company's shares had declined more than 75% over a five-year period.

Investor activism in the biotechnology industry is relatively rare due to the complex nature of scientific research and the length of time it takes for companies to reach profitability. Biotech companies only start generating revenue when they have an approved drug on the market, a feat that often takes several years, and in some instances more than a decade.

A spokesperson for Ziopharm did not immediately respond to requests for comment.

Ziopharm is researching immuno-oncology drugs, therapies that use the body's own immune system to battle cancer. The field has had scores of successes in recent years among both pharmaceutical giants and up-start biotechnology firms seeking new ways to treat cancer. (Reporting by Rebecca Spalding; Editing by Christopher Cushing)