Ziopharm's activist drama continues as another board member resigns

 The very public and very bitter fight between Ziopharm Oncology and a minority activist investor continued Friday with the resignation of a board member to whom the latter had objected.

In a letter to shareholders sent Friday morning, Ziopharm announced it had accepted the resignation of Elan Ezickson, following calls to replace him from 3.3% stakeholder WaterMill Asset Management Corp. Ziopharm has not announced a replacement and it remains to be seen if they will, effectively shrinking the board to seven for the time being.

“Over the last several weeks the Board has taken further actions in response to shareholder feedback, including most recently accepting the resignation of Director Elan Ezickson,” Ziopharm said in a statement. “We sincerely thank Mr. Ezickson for his many contributions to the Board and wish him well.”

Ziopharm’s board has seen heavy churn in the last 18 months, appointing 5 new members during that time.

WaterMill launched its activist attack in early November, seeking to oust four of its then-eight board members and replace them with three individuals it had nominated itself — including WaterMill founder Robert Postma. Two of the four, Ezickson and Scott Braunstein, have now been replaced or left entirely, but WaterMill continues to call for Ziopharm chairman Scott Tarriff to step down as well.

The minority shareholder had also raised objections over a former board member at Ziopharm’s annual investor meeting over the summer, and that individual was replaced in September.

For those keeping score at home, WaterMill has essentially pressured out three of Ziopharm’s board members over the last six months. But Ziopharm has not nominated any of the three individuals put forth by WaterMill and continues to object to one specific nominee, Holger Weis.

After the proxy adviser Institutional Shareholder Services recommended last week that Ezickson and Tariff step down in favor of Weis and another WaterMill nominee, Ziopharm claimed Weis proved a key force in driving the biotech DemeRx to bankruptcy in 2018. Ziopharm highlighted several pieces from a publicly available Chapter 11 filing in 2018 detailing what it says shows a history of Weis’ corporate malpractice during his tenure as president, COO and CFO of DemeRx. The company reiterated those concerns in its Friday letter.

WaterMill subsequently accused Ziopharm of engaging in a “desperate, low-road smear campaign” and maintained Weis is a highly qualified nominee. Postma noted two former DemeRx executives vouched for Weis and claimed the filing from which Ziopharm quoted was cherry-picked and “completely unsubstantiated.”

With WaterMill aiming to submit its written consent letters next Friday, this drama may likely soon draw to a close, and Ziopharm acknowledged in its statement it’s “open to reaching a resolution.” But if the last month has given any indication — with the two entities fighting over the Thanksgiving weekend — the final act may not be pretty.

https://endpts.com/ziopharms-activist-drama-continues-as-another-board-member-member-resigns-is-the-end-in-sight/