SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Amendment No. 3)
Under the Securities Exchange Act of 1934*
Nabi Biopharmaceuticals
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $0.10 per share
- --------------------------------------------------------------------------------
(Title of Class of Securities)
629519109
- --------------------------------------------------------------------------------
(CUSIP Number of Class of Securities)
Daniel S. Loeb
Third Point LLC
390 Park Avenue
New York, NY 10022
(212) 224-7400
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
Copies to:
Michael A. Schwartz, Esq.
Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, NY 10019-6099
(212) 728-8000
August 16, 2006
- --------------------------------------------------------------------------------
(Date of Event which Requires
Filing of this Schedule)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box: [ ]
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 240.13d-7 for other
parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
SCHEDULE 13D
- -------------------------------- -------------------------------
CUSIP No. 629519109 Page 2 of 10 Pages
- -------------------------------- -------------------------------
- ----------- --------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Third Point LLC I.D. #13-392260
- ----------- --------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
- ----------- --------------------------------------------------------------------
3 SEC USE ONLY
- ----------- --------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- ----------- --------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
- ----------- --------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------- --------- ------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF SHARES --------- ------------------------------------------------
BENEFICIALLY OWNED 8 SHARED VOTING POWER
BY EACH REPORTING
PERSON WITH 5,750,000
--------- ------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
--------- ------------------------------------------------
10 SHARED DISPOSITIVE POWER
5,750,000
- ----------- --------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
5,750,000
- ----------- --------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- ----------- --------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.5%
- ----------- --------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
- ----------- --------------------------------------------------------------------
SCHEDULE 13D
- -------------------------------- -------------------------------
CUSIP No. 629519109 Page 3 of 10 Pages
- -------------------------------- -------------------------------
- ----------- --------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Third Point Offshore Fund, Ltd.
- ----------- --------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
- ----------- --------------------------------------------------------------------
3 SEC USE ONLY
- ----------- --------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- ----------- --------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
- ----------- --------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
- --------------------- --------- ------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF SHARES --------- ------------------------------------------------
BENEFICIALLY OWNED 8 SHARED VOTING POWER
BY EACH REPORTING
PERSON WITH 3,655,900
--------- ------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
--------- ------------------------------------------------
10 SHARED DISPOSITIVE POWER
3,655,900
- ----------- --------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
3,655,900
- ----------- --------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- ----------- --------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.1%
- ----------- --------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
- ----------- --------------------------------------------------------------------
SCHEDULE 13D
- -------------------------------- -------------------------------
CUSIP No. 629519109 Page 4 of 10 Pages
- -------------------------------- -------------------------------
- ----------- --------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Daniel S. Loeb
- ----------- --------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
- ----------- --------------------------------------------------------------------
3 SEC USE ONLY
- ----------- --------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- ----------- --------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
- ----------- --------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------- --------- ------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF SHARES --------- ------------------------------------------------
BENEFICIALLY OWNED 8 SHARED VOTING POWER
BY EACH REPORTING
PERSON WITH 5,750,000
--------- ------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
--------- ------------------------------------------------
10 SHARED DISPOSITIVE POWER
5,750,000
- ----------- --------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
5,750,000
- ----------- --------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- ----------- --------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.5%
- ----------- --------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- ----------- --------------------------------------------------------------------
This Amendment No. 3 (the "Amendment") amends the Schedule 13D filed on
April 17, 2006 (together with Amendment No. 1 thereto previously filed on April
27, 2006 and Amendment No. 2 thereto previously filed on June 15, 2006, the
"Schedule 13D") and is being filed on behalf of Third Point LLC, a Delaware
limited liability company (the "Management Company"), Third Point Offshore Fund,
Ltd., a Cayman Islands limited liability exempted company (the "Offshore Fund"),
and Daniel S. Loeb, an individual ("Mr. Loeb" and, together with the Management
Company and the Offshore Fund, the "Reporting Persons"). Unless the context
otherwise requires, references herein to the "Common Stock" are to shares of
common stock, par value $0.10 per share, of Nabi Biopharmaceuticals, a Delaware
corporation (the "Company"). The Management Company is the investment manager or
adviser to a variety of hedge funds and managed accounts (such funds and
accounts, collectively, including but not limited to the Offshore Fund, the
"Funds"). The Funds directly own the Common Stock to which this Schedule 13D
relates, and the Reporting Persons may be deemed to have beneficial ownership
over such Common Stock by virtue of their ownership or the authority granted to
them by the Funds to vote and to dispose of the securities held by the Funds,
including the Common Stock.
Item 3. Source and Amount of Funds or Other Consideration.
Item 3 of the Schedule 13D is hereby amended by deleting the first
paragraph thereof and replacing it with the following:
The Funds expended an aggregate of approximately $27,623,678 of their own
investment capital to acquire the 5,750,000 shares of Common Stock held by them
(the "Shares"), and the Offshore Fund expended an aggregate of approximately
$17,589,808 of its own investment capital to acquire its 3,655,900 shares of
Common Stock. All Shares were acquired in open market purchases on the Nasdaq
National Market.
Item 4. Purpose of Transaction.
Item 4 of the Schedule 13D is hereby amended by adding the following
thereto:
On August 16, 2006, the Reporting Persons sent a letter to the Board of
Directors of the Company, which, among other things, calls on the Board to
immediately direct its new investment bank to commence a public process to
maximize value for the Company's shareholders.
A copy of the letter to the Board of Directors of the Company is filed
herewith as Exhibit 99.1, and a copy of a letter to the Vice President, Investor
Relations, of the Company requesting immediate distribution, to each member of
the Board, of the letter to the Board described above is filed herewith as
Exhibit 99.2. Both letters are incorporated herein by reference in their
entirety.
5
Item 5. Interest in Securities of the Issuer.
Item 5 of the Schedule 13D is hereby amended by deleting the entirety of
the text thereof and replacing it with the following:
(a) As of the date of this Amendment, the Management Company beneficially
owns 5,750,000 shares of Common Stock. The Management Company shares voting and
dispositive power over such holdings with Mr. Loeb and with the Funds. The
Shares represent 9.5% of the 60,376,349 shares of Common Stock outstanding as of
July 27, 2006, as reflected in the Company's Quarterly Report on Form 10-Q for
the quarterly period ended July 1, 2006.
As of the date of this Amendment, the Offshore Fund directly beneficially
owns 3,655,900 shares of Common Stock, which represent 6.1% of the outstanding
shares of Common Stock. None of the other individual Funds owns a number of
shares of Common Stock representing more than 5% of such total.
(b) The Management Company and Mr. Loeb share voting and dispositive power
over the 5,750,000 shares of Common Stock held directly by the Funds. The
Management Company, Mr. Loeb and the Offshore Fund share voting power and
dispositive power over the 3,655,900 shares of Common Stock held by the Offshore
Fund.
(c) Schedule A hereto sets forth certain information with respect to
transactions by the Funds, at the direction of the Management Company and Mr.
Loeb, in the Common Stock during the past 60 days.
Schedule B hereto sets forth certain information with respect to
transactions by the Offshore Fund, at the direction of the Management Company
and Mr. Loeb, in the Common Stock during the past 60 days.
All of the transactions set forth on Schedule A and Schedule B were
effected in the Nasdaq National Market.
Except as set forth above and on Schedule A and Schedule B, during the past
60 days there were no transactions in the Common Stock effected by the Reporting
Persons, nor, to the best of their knowledge, any of their directors, executive
officers, general partners or members.
(d) Other than the Funds which directly hold the Shares, and except as
set forth in this Item 5, no person is known to have the right to receive or the
power to direct the receipt of dividends from, or the proceeds from the sale of,
the Shares.
(e) Not applicable.
6
Item 7. Material to be Filed as Exhibits.
99.1 Letter, dated August 16, 2006, from the Management Company to the
Company.
99.2 Letter, dated August 16, 2006, from the Management Company to the Vice
President, Investor Relations, of the Company.
7
SIGNATURES
After reasonable inquiry and to the best of our knowledge and belief, the
undersigned certify that the information set forth in this statement is true,
complete and correct.
Dated: August 16, 2006
THIRD POINT LLC
By: /s/ Daniel S. Loeb
------------------------------------------
Name: Daniel S. Loeb
Title: Chief Executive Officer
THIRD POINT OFFSHORE FUND, LTD.
By: /s/ Daniel S. Loeb
------------------------------------------
Name: Daniel S. Loeb
Title: Director
/s/ Daniel S. Loeb
----------------------------------------------
Daniel S. Loeb
[SIGNATURE PAGE TO AMENDMENT NO. 3 TO SCHEDULE 13D
WITH RESPECT TO NABI BIOPHARMACEUTICALS]
Schedule A
(Transactions by the Funds in Common Stock
during the past 60 days)
Date Transaction Shares Price Per Share($)
---- ----------- ------ ------------------
- ------------------------ ---------------------------- --------------------------------- -----------------------------------
6/30/06 BUY 35,800 5.740
- ------------------------ ---------------------------- --------------------------------- -----------------------------------
6/30/06 SELL (35,800) 5.740
- ------------------------ ---------------------------- --------------------------------- -----------------------------------
7/13/06 BUY 50,000 5.178
- ------------------------ ---------------------------- --------------------------------- -----------------------------------
7/31/06 BUY 28,800 5.080
- ------------------------ ---------------------------- --------------------------------- -----------------------------------
7/31/06 SELL (28,800) 5.080
- ------------------------ ---------------------------- --------------------------------- -----------------------------------
Schedule B
(Transactions by the Offshore Fund in Common Stock
during the past 60 days)
Date Transaction Shares Price Per Share($)
---- ----------- ------ ------------------
- ------------------------ ---------------------------- --------------------------------- -----------------------------------
6/30/06 SELL (34,100) 5.740
- ------------------------ ---------------------------- --------------------------------- -----------------------------------
7/13/06 BUY 32,000 5.178
- ------------------------ ---------------------------- --------------------------------- -----------------------------------
7/31/06 BUY 16,300 5.080
- ------------------------ ---------------------------- --------------------------------- -----------------------------------
EXHIBIT 99.1
[Third Point Letterhead]
August 16, 2006
Shares Owned
Outright
--------
Mr. David L. Castaldi 52,215
Geoffrey F. Cox, Ph.D 18,521
Mr. Peter B. Davis 0
Mr. Richard A. Harvey, Jr. 23,496
Leslie Hudson, Ph.D. 0
Ms. Linda Jenckes 21,747
Mr. Thomas H. McLain 107,023
Mr. Stephen G. Sundovar 3,997
-----
Total 226,998 or <0.4% of shares outstanding
c/o Mr. Thomas E. Rathjen
Vice President, Investor Relations
Nabi Biopharmaceuticals
5800 Park of Commerce Boulevard, N.W.
Boca Raton, Florida 33487
Dear Directors:
"We will provide ... our shareholders with superior growth and value."
I ask each director to consider whether during your tenure on the Nabi Board you
have fulfilled the above commitment set forth in the Nabi Mission Statement. If
you have never read the statement, or have not done so for some time, I suggest
that you study it again before continuing this letter. It can be found on the
company website: (http://www.nabi.com/about/mission.php)
"Results Oriented: We are driven to accomplish our goals and
objectives and strive for excellence and quality. Our Nabi Balanced
Scorecard monitors both Company and individual performance and assures
that activities are aligned with the corporate vision, mission and
strategy" (source: Company Mission Statement)
I must ask each director once again, by what "Scorecard" have you measured the
performance of Company CEO Thomas H. McLain: the Company's abysmal financial
performance, laundry list of missed milestones or bargain-basement stock price?
By what "Scorecard" should we judge this Board of Directors? We all know the
answer to these questions, as the "Balanced Scorecard" kept by the stock market
has been rendered: The stock plunged to under $4.00 last year and has recovered
only marginally since.(1) Over the years, with recent examples outlined below,
Mr. McLain has made one blunder after another, making him, in our opinion, one
of the
- --------------------
(1) Please note that we have been able to purchase our position in the Company
in the $4-$5 range by providing liquidity to disgusted shareholders who
understandably have wished to place as much distance as possible between
themselves and a McLain-led Nabi.
most disliked and least respected executives in the biotechnology industry.
Please be advised that our opinion of Mr. McLain does not extend to the
hard-working employees at Nabi who have worked diligently to create substantial
unrealized scientific value at the Company.
As you may know, Bank of America approached Third Point LLC recently with an
offer to present our views to three "independent" Nabi board members. While
other large shareholders may have agreed to meet with these directors, we
declined to do so. Our decision, however, should not be read by you as
reflecting any diminution in our determination that NABI should immediately
undertake a public process to maximize value for all shareholders - a view that
we remain confident is held by, and is in the best interests of, the vast
majority of the Company's shareholders. Indeed, we have continued to add to our
ownership position in Nabi, and believe that we are currently the largest
shareholder of the Company.
Our prior correspondence with you, dating back to April of this year, has
spelled out in detail the reasons why such a process should be commenced as soon
as practicable. We made these points
Board of Directors
NABI Biopharmaceuticals
August 16, 2006
Page 2
to Mr. McLain early this year, several months prior to approaching the Board
directly. Unfortunately, Mr. McLain's curt response to us on May 1st made it
clear that he has no intention of taking seriously the will of the Company's
owners. His actions since then, both public and private, have reinforced our
view that he wishes to rule Nabi as his own personal "kingdom" and plans to
inflict upon shareholders a long-term strategic plan that has no merit, is
enormously risky, and that a vast majority of the Company's owners vehemently
oppose. Given the small outright ownership of Nabi shares by both the executives
and directors of this Company, as noted above, and the much larger
out-of-the-money option positions held by both constituencies, it is little
wonder that you have so far decided to undertake a high-risk, "swing for the
fence" strategy, as you have little to lose in the highly-likely event that it
fails. Needless to say, we (as the owner of 9.5% of Nabi's outstanding shares)
and our fellow non-management shareholders are the ones who will bear the brunt
of the losses from this misguided and unwanted plan.
Therefore, and because we were informed that the meeting would not be
interactive, we declined to reiterate our well-known views to the independent
directors. The prospect of making our case to a group of directors dutifully
taking notes in a belated attempt to protect their legal backsides, but who have
shown no inclination to act upon or even explore our well-reasoned
recommendations, was not one that we relished. Rather, we believe these meetings
were proposed as simply another stall tactic on the part of management and the
Board, who, despite their fiduciary obligations, so far obstinately cling to the
status quo - no matter how ill-conceived such a strategy may be from the
standpoint of creating shareholder value, no matter how strongly shareholders
oppose it, and no matter how much damage this strategy has caused and will
continue to cause, both to the portfolios of shareholders and to the reputations
and legal positions of the directors themselves.
Since our last letter to you on June 15th, just two months ago, Nabi and its
shareholders have witnessed a continued deterioration in their fortunes and
prospects:
Board of Directors
NABI Biopharmaceuticals
August 16, 2006
Page 3
1) The Company once again fell short of Wall Street revenue and earnings (i.e.,
loss) expectations in the second quarter results reported on July 26th. This
continues a remarkable, virtually unbroken string of disappointments and
unfulfilled promises on all fronts (financial results, financial strategies,
trial designs, trial results, product approvals, facility approvals, etc.) that
the Company has served up to its shareholders and to Wall Street analysts year
after year.
2) Several well-respected analysts at major Wall Street brokerage firms have for
the first time begun to question Nabi's financial position given the continuing
egregious cash burn at the Company as well as Mr. McLain's now-demonstrated
unwillingness to reduce overhead (SG&A) to appropriate levels despite his public
promises that he would, and his inability to effectively manage product
inventory in the sales channel. One would think that the issue of the Company's
financial situation would be an issue which the directors would consider from a
personal liability standpoint given the warnings from both "street" analysts and
major shareholders on this issue.
3) The Company burned another $11.5 million of its cash in Q2, which Mr. McLain
in an Orwellian twist characterized as a "48% improvement" over the horrific
cash burn in Q1. This rate of value destruction is almost incomprehensible, yet
both Mr. McLain and the Board seem unbothered by it. Let us once again make it
clear that the owners of this Company will not accept a plan wherein the
Company's unexplainable, unnecessary and out-of-control cash burn is funded via
selling or otherwise encumbering our valuable and highly-coveted assets at
distressed levels. This is the situation that Nabi will find itself in should
you not take the only logical step of exploring opportunities to maximize value
for shareholders immediately.
4) Mr. McLain told us in late June that if we agreed to hold off on taking
further action against the Company, which we have warned both McLain and Bank of
America is forthcoming, he would be willing to update us on the Company's
progress and its position regarding our outstanding demands (within the
constraints of Regulation FD, we assumed) in the second week of July. Given Mr.
McLain's promise, we reluctantly agreed to suspend our public critique of the
Company and trusted that we could finally commence a constructive dialogue with
management regarding a plan of action to stop the significant negative operating
cashflow and to embark upon a plan to realize the substantial value embedded in
the Company. However, instead of fulfilling his promise to present a plan based
upon the Bank of America study, he said that in fact he was in no position to
update us when we called at the appointed time. When I queried at what point he
would be able to pursue this essential dialogue, he said that it would not
happen. At that point, it became readily apparent that Mr. McLain's earlier
promise to engage in a constructive discussion was a further ruse to buy him
time to begin implementing his long-term plan against our wishes.
5) Despite his repeated assurances to the contrary, it is becoming increasingly
clear that not only does Mr. McLain not "welcome the input" of shareholders, as
is his disingenuous mantra, but instead he has begun to completely withdraw from
interactions with any shareholders who might have views different than his own.
Apparently, Mr. McLain instructed the conference call
Board of Directors
NABI Biopharmaceuticals
August 16, 2006
Page 4
operators running the second quarter Nabi conference call in late July not to
allow questions from anyone but Wall Street analysts (i.e., no questions were
taken from any shareholders). We say this because several shareholders did in
fact try to ask questions on the call but were denied the ability to do so
("luckily," the second quarter results were sufficiently disappointing, that the
analysts from brokerage firms asked some of the hard questions that shareholders
were attempting to ask). You should be aware that this is not an aberration, but
the beginning of a regrettable pattern, as only one "friendly" shareholder was
permitted to ask a question on the first quarter conference call. So we do not
in any way believe McLain's assertions that he "constantly considers" what is in
the best interest of the Company's shareholders - nor should you. Indeed, he has
begun to distance himself from any interactions with shareholders whatsoever,
which is reinforced by his elusiveness, as noted by several Wall Street firms,
at this year's unusually short (like the recent conference calls) annual
meeting. If he were a man of his oft-spoken, but disingenuous, word, and truly
listened to the wishes of the Company's shareholders, Nabi would have already
embarked upon a successful process to maximize value for all shareholders.
To this point, in response to questions you may have, we insist that the process
to maximize value be a public one because Mr. McLain and the Board have to date
repeatedly failed to act in the best interest of shareholders, even when made
fully aware of the wishes of a strong majority of the shareholders - and we see
Mr. McLain continuing to further separate himself (and attempting to have the
Board do the same via his apparently selective and slanted relating of
information to you) from the owners of the Company. Thus, making the value
maximization process a public one is the only way to make certain that the
process is run thoroughly and earnestly (which we do not believe that it would
otherwise be) - i.e., truly being run for the benefit of shareholders, and not
for the benefit of management and the Board. To address another concern - that a
public process will be disruptive for Nabi employees - it was you who decided to
approve an employee-retention plan earlier this year that was very shallow
(i.e., few employees were included in the plan) and inexplicably heavily
weighted towards rewarding McLain for his repeated failures to create value for
stockholders. Had you truly been concerned about losing talent below the top
dozen employees at Nabi, you would have presumably included a far-greater number
of employees in the plan (as is standard procedure in most retention programs).
Possible employee unrest, therefore, is not a reasonable excuse for not making
the value maximization process public.
6) We are aware that several parties, comprised of both substantial corporate
and financial buyers, have expressed to Mr. McLain their interest in purchasing
several, and in one case a majority, of Nabi's assets in the past few months. In
all cases it appears that the prospective buyers have been placed "in limbo" and
have not heard from anyone at the Company for a lengthy period. Indeed, we were
aware, as was Mr. McLain, of a large international company that was interested
in purchasing Civacir - before Mr. McLain went ahead and encumbered the asset
(albeit, not significantly), apparently without exploring the larger
opportunity. Needless to
Board of Directors
NABI Biopharmaceuticals
August 16, 2006
Page 5
say, such treatment of interested parties is unprofessional, does not reflect
well upon management's attention to its fiduciary duties, and is dangerous to
all of you legally; but sadly it is not inconsistent with the pervasive
shareholder-unfriendly corporate behavior we have observed.
7) We have attempted to contact each Nabi director, and have succeeded on only
one occasion (apparently Mr. Davis inadvertently picked up his phone). We have
not received return calls from any of you. If you were truly interested in
learning what the owners of the Company really want, we would think that each of
you would be interested in engaging us in an unfiltered two-way dialogue.
Instead, it appears that Mr. McLain prefers a more Maoist approach whereby only
information he deems beneficial to his empire is disseminated to board members.
Many of you may not have been aware of this, so understand that a "head in the
sand" approach to corporate directorship will not absolve you of your fiduciary,
legal or moral duties.
8) We believe that some of the correspondences to you from Third Point, as well
as potentially from other shareholders, have not been delivered to you in a
timely manner, if at all. Such a failure to disseminate communications to the
Board is a breach of Nabi's own policies as set
forth in its proxy statement, as well as a deviation from normal and accepted
corporate governance principles. Again, we believe that Mr. McLain has devised a
self-serving system whereby all information goes through him before he filters
it and sends the portions that he chooses along to you.
9) We are concerned that Bank of America - which we believe to be an outstanding
investment banking firm with a first-rate life sciences practice - has so far
been hamstrung by a nebulous mandate, essentially to provide "consulting
services" to Nabi. We are confident that now that BofA has had sufficient time
to investigate Nabi's staggering litany of historical failures and value
destruction, to correspondingly comprehend the enormous risk and low probability
of success of Nabi's current multi-year "strategy," and to understand the will
of Nabi's shareholders, it has come to the only logical conclusion - that
undertaking a strategic process to maximize shareholder values at this time is
the only reasonable step for the Company to take. However, it appears that
BofA's retention as a "consultant" is yet another ploy by Mr. McLain to
temporarily appease shareholders, and that so far they have not been empowered
to evaluate any of the transactions that have been proposed by interested
parties and that could result in material gains to Nabi shareholders.
Accordingly, we insist that Bank of America immediately be empowered to evaluate
strategic alternatives for the Company as a whole or in part.
10) We have become more convinced, based upon our further investigation of the
legal parameters of spring-loading of options as well as our investigation of
the knowledge circulating within Nabi at the time, that, as we have noted
previously, there was at best a horrendous lack of judgment by the Board and
management in implementing a generous and uncalled for retention package ahead
of the positive StaphVax news earlier this year.
Board of Directors
NABI Biopharmaceuticals
August 16, 2006
Page 6
11) Nabi stock has continued to trade down over the past two months. And,
despite what we understand to be Mr. McLain's delusional bragging that the small
increase in the stock price off of its post-StaphVax-failure lows is related to
anything other than several highly-respected money management firms taking
positions in the stock and demanding that the Company do the right thing for
shareholders, rest assured that if the market truly believed that Mr. McLain was
going to be allowed to undertake his value-destructive long-term plan this stock
would be making new lows every day.
12) Despite repeated promises by Mr. McLain to shareholders (dating back to a
projected approval in the 4th quarter of 2005), Nabi yet again failed to secure
EU approval for PhosLo in the second quarter (and still has not done so).
13) While Nabi did secure a positive FDA Advisory Committee opinion to expand
the label for Nabi-HB, it nearly bungled what should have been a "no-brainer"
approval, as it is already the off-label standard-of-care for this indication.
One committee member noted "it would have been easier to approve this product if
we had never seen the data from Nabi." This near miscue on what should have been
a straightforward, unanimous (which it wasn't) approval shows again Nabi's lack
of competence in designing trials, collecting and presenting data, etc. - and,
among many reasons, why we assign such a low probability of success to the
Company's current "strategic plan".
We remain hopeful that this Board of Directors takes its fiduciary duty
seriously. As we've alluded to only in statistical form so far, we are aware
that this Board has had an aggregate lack of success in creating value for
shareholders at other public companies in which Board members have been
involved. Now is your chance to do the right thing for Nabi's long-suffering
shareholders by initiating a process to unlock the substantial value embedded at
this Company before it's too late to recognize full value for our superior
assets. With all due respect, Nabi has shown that it has neither the management
team nor the expertise at the board level to pursue a "go it alone" or growth
strategy. We ask that you finally recognize this, and act upon it.
EMPOWER BANK OF AMERICA TO IMMEDIATELY EXPLORE ALL STRATEGIC ALTERNATIVES AND
PURSUE A PUBLIC PROCESS TO MAXIMIZE SHAREHOLDER VALUE.
And remember your own Corporate Governance Principles:
"THE PRIMARY RESPONSIBILITY OF THE BOARD IS TO PROVIDE OVERSIGHT,
COUNSELING AND DIRECTION TO THE MANAGEMENT OF THE COMPANY IN THE INTEREST
AND FOR THE BENEFIT OF THE COMPANY'S STOCKHOLDERS."
From "The Nabi Way" on the Company's corporate website:
Board of Directors
NABI Biopharmaceuticals
August 16, 2006
Page 7
"Change Ready: We strive to identify areas in the company where improvement
can be made. Rethinking old ways is encouraged to keep the business in a
state of continuous improvement."
If you, the Nabi directors, charged as fiduciaries with running this Company for
the benefit of its shareholders, are truly "Change Ready," you will "rethink"
your "old," and unsuccessful "Nabi ways" and finally take action that is in the
best interests of, and complies with the wishes of, the owners of this Company.
To that point, we strongly believe that if you do not undertake a program to
maximize value for all shareholders you will certainly be removed from your
positions, along with management, at the next annual shareholders' meeting. So,
it appears to be simply a question of timing, and how much value current
management can further destroy, before the Company is put up for sale - not
whether Mr. McLain's far-too-risky long-term plan will be allowed to proceed
indefinitely against shareholder wishes. The Company's shareholders have now
spoken loud and clear. We are highly-confident that a value maximization process
will yield values for Nabi shareholders on the order of three times the current
price of the stock (i.e., our continued due diligence has given us ever
increased confidence that Nabi has valuable and coveted assets that, sold in
whole or in components, will yield value for shareholders well in excess of $10
per share). We are confident that once you have done your homework you will also
reach the only logical conclusion - that undertaking a process of maximizing
value now is a far better risk-adjusted, probability-weighted outcome for
shareholders than what the Company is currently proposing. Do your jobs and
direct management to take appropriate action for the benefit of the shareholders
whom you serve. We are grateful for your cooperation , and look forward to a
speedy response to this letter.
Very truly yours,
/s/ Daniel S. Loeb
Daniel S. Loeb
Chief Executive Officer
EXHIBIT 99.2
[Third Point Letterhead]
August 16, 2006
Mr. Thomas E. Rathjen
Vice President, Investor Relations
Nabi Biopharmaceuticals
5800 Park of Commerce Boulevard, N.W.
Boca Raton, Florida 33487
Dear Tom:
In accordance with Nabi's "Shareholder Communication Policy," as set forth in
Nabi's April 2006 proxy statement, we ask that you immediately (i.e., today)
distribute to each Nabi director, via email and hard copy, this letter to you
and the accompanying letter to the Board. Given our belief that our previous
letters to the Board have not been sent to them by Nabi on a timely basis, if at
all, we will be following up with each director to make sure that this
correspondence has been immediately forwarded to them. Unfortunately, we feel
compelled to issue our letter to the Board as a press release because we want to
be certain that this time the directors receive our correspondence in a timely
fashion.
Very truly yours,
/s/ Daniel S. Loeb
Daniel S. Loeb
Chief Executive Officer
Third Point LLC