View:
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Amendment No. 5)
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
September 14, 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 6 Pages
- ----------------------------------------- -------------------------
- ----------- --------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Third Point LLC I.D. #13-3922602
- ----------- --------------------------------------------------------------------
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 6 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 3,691,500
--------- ------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
--------- ------------------------------------------------
10 SHARED DISPOSITIVE POWER
3,691,500
- ----------- --------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
3,691,500
- ----------- --------------------------------------------------------------------
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 6 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. 5 (the "Amendment") amends the Schedule 13D filed on
April 17, 2006 (together with Amendment No. 1 thereto previously filed on April
27, 2006, Amendment No. 2 thereto previously filed on June 15, 2006, Amendment
No. 3 thereto previously filed on August 16, 2006 and Amendment No. 4 thereto
previously filed on September 5, 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 4. Purpose of Transaction.
Item 4 of the Schedule 13D is hereby amended by adding the following
thereto:
On September 14, 2006, the Reporting Persons sent a letter to the Board of
Directors urging the Board, at its next meeting, to expand the mandate of Bank
of America, the Company's investment banking firm, to conduct a public process
to maximize shareholder value by exploring all alternatives, including a sale of
the Company in whole or in component pieces.
A copy of the letter to the Company is filed herewith as Exhibit 99.1 and
is incorporated herein by reference in its entirety.
Item 7. Material to be Filed as Exhibits.
99.1 Letter, dated September 14, 2006, from the Management Company to the
Company.
5
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: September 14, 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. 5 TO SCHEDULE 13D
WITH RESPECT TO NABI BIOPHARMACEUTICALS]
[Third Point Letterhead]
September 14, 2006
Shares Owned
Outright
--------
Mr. David L. Castaldi 49,189
Geoffrey F. Cox, Ph.D 23,771
Mr. Peter B. Davis 3,968
Mr. Richard A. Harvey, Jr. 23,496
Leslie Hudson, Ph.D. 0
Ms. Linda Jenckes 21,747
Mr. Thomas H. McLain 127,021
Mr. Stephen G. Sundovar 8,362
--------
Total 257,554 (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
Nabi Directors:
We submit this important letter for you to consider prior to the Nabi
BioPharmaceuticals ("Nabi" or the "Company") Board of Directors meeting that we
understand will take place this Friday, September 15, 2006. We understand that
at this meeting you will decide whether to expand Bank of America's ("BofA")
mandate to include exploration of asset sales and other means to maximize
shareholder value. It is our hope that this letter will help clarify your
thinking on this and other matters that may come before the Board.
We are extremely disappointed that on Tuesday Nabi refused to comply, except in
a limited manner, with our demand to inspect its books and records in order to
confirm apparent gross mismanagement and breaches of fiduciary duty and to
determine whether to initiate a proxy contest and/or litigation. This refusal is
consistent with the Company's behavior under Tom McLain - being unresponsive to
shareholders and avoiding transparency on important issues. As you undoubtedly
understand by now, we will not be deterred by the Company's attempts to ignore
its shareholders and hide behind legal facades. We will continue to press for
full disclosure in order to shine a bright light on the many concerns we have
expressed to the Board, to Mr. McLain and to your financial advisers at BofA
pertaining to the mismanagement, poor
Board of Directors
NABI Biopharmaceuticals
September 14, 2006
Page 2
oversight and suspected malfeasance that we believe has taken place during Mr.
McLain's tenure as Chief Executive Officer.
Despite our already dim view of Mr. McLain's character and openness to the
owners of his company, even we were shocked that, at the last minute, he backed
out of his scheduled appearance at this week's Bear Stearns Healthcare
Conference, and that he also apparently refused, while in New York on Monday, to
meet with any shareholders who do not share his "vision." It is a primary job of
a CEO to articulate the firm's strategy to investors and to face up to its
shareholders, even when they include his harshest critics.
As noted in our letter to you dated August 16th, it is clear that Mr. McLain,
despite claims that he values the input of Nabi's shareholders, has increasingly
withdrawn from all interactions with shareholders whose views differ from his
own. Given that the Company's three largest shareholders are all based in the
New York area, that they have all clearly stated in public filings that they
strongly oppose Mr. McLain's ill-conceived and highly-risky strategic plan, and
that they are all convinced that shareholders will be far better served if a
public process is immediately initiated to maximize value for shareholders,
perhaps we should not have been surprised that Mr. McLain failed to follow
through on his announced plan to present at the conference.
We identified shareholders representing over 35% of Nabi's shares outstanding
(all of whom oppose your proposed strategic plan) in just the first 5 rows of
the presentation to which Mr. McLain sent Henrik Rasmussen in his stead (we
think that Henrik is terrific, by the way). Given this, and given that the Bear
Stearns analyst has expressed serious concerns about Nabi's out-of-control
expenditures, one would have thought that Mr. McLain would have welcomed the
opportunity to interact with shareholders and analysts who have grave concerns
about his leadership of Nabi. Instead, Mr. McLain deliberately ducked a dialogue
with the multitude of Company owners who do not believe in his and the Board's
plan, and who insist on knowing precisely when the Company's substantial and
unnecessary cash burn will subside and when they can expect the Company to be
cashflow and earnings positive.
Also, in the latest installment of Nabi's "Believe-it-or-Not," we note that at
last week's Thomas Weisel Partners Healthcare Conference Mr. McLain snuck in a
slide and commentary during his presentation showing that the Company now
expects EU approval for PhosLo in the fourth quarter of this year or the first
quarter of 2007 - a further delay, now approaching possibly eighteen months, for
what should have been a "lay up" approval a long time ago. While we appreciate
that the Company cannot force the European regulators to come to the United
States to inspect its plant, the last step needed for approval, the Company's
real failure has been its inexplicable inability for a sustained period of time
to explain compellingly to the regulators why this approval should be a priority
for them - or is even worthy of their attention. The Company's continued and
constant inability to meet any timeline that it sets, or any timeline that is
reasonable by industry standards, is simply astonishing and reinforces yet again
that current
Board of Directors
NABI Biopharmaceuticals
September 14, 2006
Page 3
management is not equipped to lead this Company on a going-forward basis, much
less to maximize the value of Nabi's substantial assets.
In contrast to Mr. McLain's reign of shareholder value destruction, we urge each
of you to consider Third Point's record with Ligand Pharmaceuticals Incorporated
("Ligand") over the past year, which we have discussed with your investment
bankers at BofA. Contrary to Mr. McLain's apparent portrayal of the Company's
large shareholders as naive "financial players" who do not understand
biotechnology companies (which is ironic coming from a former accountant with no
scientific background who has presided over an unbroken string of financial AND
scientific failures during his tenure), here is a real-life example of how we
have added tremendous value to a biotech company as shareholders and board
members. Our involvement with Ligand provides concrete evidence that while our
goal is to maximize the long-term value of our portfolio companies for the
benefit of all shareholders, we are receptive to any strategic process
permutation that achieves this goal.
To recap briefly, when we first became Ligand shareholders last year our thesis
was similar to that driving our Nabi investment: Ligand was an asset-rich
company with value substantially above what Wall Street was giving it credit
for, but the value of its assets was obscured by poor management and imprudent
capital allocation decisions. When we concluded that it was highly unlikely that
these values would ever be realized under existing management and Ligand's
business plan, and that there was indeed a substantial risk that continued cash
burn might eventually force management to sell off the company's valuable assets
at fire sale prices, we demanded that Ligand immediately initiate a process to
maximize shareholder value. The result is striking: the stock is up by 30% since
we became involved; just last week Ligand announced the sales of its two
commercial operations at extremely attractive prices; and the company has never
been in a stronger financial position, nor had a more exciting future. Due to
our direct and substantial involvement in the value maximization process,
significant cash should be returned to Ligand's shareholders shortly, and the
prospects for the "new" company's remaining R&D pipeline and partnered products
is tremendously exciting. Mr. McLain should also note that while the scientific
staff at Ligand is intact, former CEO David Robinson resigned in July.
I am confident that any Ligand board member will agree that while, like you,
Ligand was initially resistant to our demands, the result is: 1) that
undertaking a process to maximize shareholder values was unequivocally the right
thing to do, 2) that Third Point was interested in maximizing value for all
shareholders, but very open-minded about how to get there, 3) that we have added
tremendous value to the maximization process, strategically, scientifically and
financially, and 4) that Third Point's representatives constituted a minority of
the board but were able to work constructively with the other board members to
achieve an impressive result. We are confident that Ligand's other large
shareholders would agree with all of these points as well. As we have discussed
with your investment bankers, we believe that we would add significantly to
Nabi's value maximization process as well, and we are willing to work
constructively with you to create the greatest long-term value for all of Nabi's
shareholders. And to clear up any misconceptions, we are absolutely not
demanding that Nabi be sold at any price. If an outright
Board of Directors
NABI Biopharmaceuticals
September 14, 2006
Page 4
sale of the Company would yield the highest net present value to Nabi
shareholders, then an outright sale would clearly be the proper course of
action. However, if the market is willing to pay top dollar for Nabi's marketed
products, but is not willing to pay full value for Nabi's tremendous pipeline
potential, for instance, and we can instead create greater risk-adjusted value
for shareholders by partnering out NicVax, StaphVAX, etc., then we would be
supportive of that strategy. We believe that the Company should be creative and
flexible in realizing the greatest risk-adjusted net present values for the
Company's owners in whatever form that takes.
We continue to insist that the process to maximize shareholder value be publicly
announced and that BofA's mandate be specifically expanded to explore all
alternatives, including a sale of the Company in whole or in component pieces,
that will lead to the greatest value creation for the Company's owners. We
understand that this is a "sticking point" for you, and given the Company's
culture of failure and negative thinking it is clear why this is so. However,
for the reasons spelled out to you in our August 16th letter, we do not believe
that your concerns regarding announcing this process publicly are valid, and
feel that it is imperative that the process be run publicly so that the
Company's shareholders can be certain that this process is not a stall tactic or
sham process designed to thwart us, but is instead an earnest process run
properly for the benefit of the Company's owners and in accordance with the will
of the vast majority of your shareholders.
You probably also know that we received another two unsolicited calls last week
from parties extremely interested in exploring the purchase of some or all of
Nabi's assets. We referred these parties to your investment bankers. As we have
communicated to you consistently over the past six months, based on an enormous
amount of due diligence that we have done we are highly confident that there is
significant interest from many parties in purchasing Nabi, or various assets
owned by the Company, at extremely attractive prices - such that we continue to
believe that a sincerely-run process will yield value for Nabi shareholders
easily in excess of twice the current share price. Again, we (and undoubtedly
other large shareholders) stand ready to invest further significant time and
expertise, and in some cases to serve as non-Board consultants on a strategic
action committee charged with running the process to maximize the value of
Nabi's assets (the creation of which is standard corporate action in such
processes), in order to assist you in ensuring that the value of Nabi's coveted
assets is maximized in whatever form that ultimately takes.
Besides the Ligand example, I would like to draw your attention to two other
recent corporate events that should be considered as you contemplate the future
direction of Nabi. In the case of Bristol-Myers, you are undoubtedly aware that
its CEO was forced out this week after a series of poor strategic decisions. We
trust that you will take to heart the following quote from Bristol Chairman
James Robinson: "The concern is the obvious one, that any CEO is held
accountable for both the successes and the failures.... If there are failures in
execution that have caused a loss of confidence in the mind of investors, that
is a relevant consideration." There can be no doubt in your minds that Mr.
McLain's "failures in execution" have caused a loss of confidence in the minds
of most Nabi shareholders - several of the largest of whom you have recently
Board of Directors
NABI Biopharmaceuticals
September 14, 2006
Page 5
interfaced with directly. We also trust that you are familiar with the events at
AnorMED this year, wherein that company's Board of Directors and CEO were forced
out by shareholders for reasons similar to the concerns we've expressed
regarding Nabi, and the result has been a near doubling in the stock price as
the result of a takeover offer. We are hopeful that the Nabi situation will not
come to this, but are confident that if it does the outcome for Nabi
shareholders will be similarly lucrative.
I also want to once again express our grave concern with Mr. McLain's
insistence, contrary to the facts, that Nabi enjoys "both strong cash flow and a
strong balance sheet." This belief was reiterated again at the Weisel conference
last week. As we have documented in our previous letters, the cash burn at Nabi
has been egregious and unexplainable for some time now, and has been
particularly so in the first half of this year. Mr. McLain apparently recently
stated in an investor meeting that in biotechnology a company needs to "spend
money to make money." Carefully budgeted R&D spending with clear and specific
objectives is one thing; dissipating the Company's cash reserves on
ill-conceived, poorly-executed projects and bloated overhead with all the
discipline of a drunken sailor on a night's leave in Bangkok is unacceptable and
should not be tolerated by this Board. (Indeed, we are curious as to why this
Board has apparently abandoned its oversight duties in approving past corporate
budgets.) To reiterate, we will not tolerate a "burn the furniture" program
wherein the Company's saleable assets are sold to fund its riskier development
projects. This is the situation that Nabi will soon find itself in should you
not take action immediately to stop the cash burn and take advantage of the
substantial current interest in Nabi's valuable assets.
In sum, it is irrefutable that a majority of your shareholders vehemently oppose
the long-term, highly-risky strategic plan that you continue to force upon us
against our collective will (while, once again, you undertake very little risk
yourselves due to your negligible outright holdings in the stock). You have had
six months now to do your research and come to the only accurate conclusion -
i.e., if you truly take your fiduciary, legal and moral obligations seriously
you will agree to act upon the will of the majority of Nabi shareholders (many
of whom have apparently now communicated with you directly) and empower BofA to
explore all possibilities to maximize the significant asset values embedded
within Nabi. As Mr. McLain has explained to us himself, it is very difficult for
a small biotechnology company to succeed in the marketplace today. We agree, and
when that company is not strongly capitalized and extremely well managed - Nabi
being neither of these - it is nearly impossible. It is time that you finally
acknowledge this and, should this prove to be the optimal outcome, place our
valuable assets, at a substantial premium, in the hands of stronger operators.
Mr. McLain's "balanced scorecard" (alluded to on the Company website) apparently
does not exist (if it does the Company has refused to release it), but if it
does exist it must be overwhelmingly unbalanced in that it is unarguably
weighted so strongly to the negative. Nabi's large shareholders, on the other
hand, are highly respected investors with strong long-term track records and the
willingness to work with you to maximize the value of Nabi for everyone's
benefit. The Board's final scorecards have yet to be submitted. Again, we
understand that Nabi
Board of Directors
NABI Biopharmaceuticals
September 14, 2006
Page 6
is holding a Board meeting tomorrow to discuss the future direction of the
Company - including whether BofA's mandate will be expanded to allow them to
explore all ways to maximize the value of Nabi's assets. We insist once again
that you do the right thing, listen to the will of the owners of the Company
whom you serve, and empower your investment bankers to explore all avenues to
realize the substantial value of, and interest in, Nabi.
While you consider the right course of action for this Company, in our minds the
conclusion is clear and irrefutable. Should this board continue to pursue a
course of inaction, let us remind you that "proxy season" is but a few months
away.
Very truly yours,
Daniel S. Loeb
Chief Executive Officer