Penwest nominees receive mixed support from proxy advisory firms

By Lisa Kerner

Charlotte, N.C., June 1 - Penwest Pharmaceuticals Co. said RiskMetrics Group/ISS and Glass, Lewis & Co. recommended that the company's shareholders vote to reject proposals put forth by Tang Capital Management and Perceptive Life Sciences at the annual meeting on June 10.

"We are pleased that RiskMetrics Group and Glass Lewis & Co., like Penwest, disagree with the dissidents' proposed strategy to wind down the company's operations and have recommended that shareholders vote against the proposal," the company said.

RiskMetrics and Glass Lewis "have validated the company's position further by recommending that Penwest shareholders vote against the dissidents' proposals for supermajority board voting and for fixing the annual meeting date at April 30," Penwest said.

Penwest is also seeking shareholder support for its director nominees, W. James O'Shea and Joseph Edelman.

A third proxy advisory firm, Proxy Governance, Inc., supports the dissidents' proposal for supermajority board voting. All three firms support Edelman's election.

All three firms "failed to recognize the qualifications" of O'Shea, said Penwest.

Tang Capital and Perceptive want Penwest shareholders to elect their three director nominees, amend Penwest's bylaws to, among other things, provide certainty as to the date of the annual meeting and declassify the board and approve a shareholder resolution to wind down substantially all of the company's operations.

Nominated by Tang Capital and Perceptive for election are:

• Kevin C. Tang, founder and manager of Tang Capital;

• Joseph Edelman, founder and manager of Perceptive; and

• Andrew D. Levin, M.D., Ph.D., a principal at Tang Capital.

As previously reported, Penwest named Edelman as a board nominee in its preliminary proxy statement. However, Edelman said he was never informed of the nomination.

RiskMetrics and Glass Lewis further recommended that shareholders withhold their votes from the dissidents' third nominee, Levin, a Penwest news release said.

Penwest is a Danbury, Conn., pharmaceutical company.

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