Investment Firm Appaloosa Again Calls for Leadership Changes at Allergan

After Allergan reported that its late-stage adjunctive treatment for major depressive disorder failed to distinguish itself against placebo, hedge fund investor Appaloosa LP is again calling on the Ireland-based company to make some changes to its board of directors, including tapping a new chairman. On Thursday, Allergan said rapastinel failed to hit endpoints in three late-stage trials. Allergan did not provide many details of how the late-stage treatment stood up to placebo. The company said it will share detailed results from these three studies at future scientific meetings. That wasn’t enough for Appaloosa. In a statement, the investment firm called on Allergan to install an independent chairman of the board of directors who will “bring new leadership to the board and rein in management’s predilection for value-destruction.” Brent Saunders currently serves as both chief executive officer and chairman of Allergan. Appaloosa wants to see a clear separation of those two roles. In its announcement, Appaloosa said Allergan’s “open science” business model is broken and someone needs to take over the board who will “rein in management’s predilection for value-destruction.”