A Michigan-based activist investor is urging CVRx (NASDAQ: CVRx) — the maker of the heart-failure-symptom-treating implantable Barostim system — to sell to a strategic acquirer.
In a publicly released letter dated yesterday, Pointillist Family Office founder Jorey Chernett told CVRx’s board:
“In the hands of a large medical device company with an established heart failure and electrophysiology sales organization, with national payer relationships capable of resolving the prior authorization impasse, and with a balance sheet that funds the pivotal trial work already underway, Barostim’s value would be realized in a fraction of the time and at a fraction of the risk compared to the standalone strategy currently being employed.”
Chernett filed SEC forms this month that show him owning 1,461,750 shares, or 5.5% of the Minneapolis-area company. In his letter to CVRx’s board, he cited a disappointing second-quarter report earlier this month in which the company cut its revenue guidance and disclosed a U.S. Department of Justice civil investigation into sales and marketing practices.
CVRX shares have lost a third of their value over the past month, though they are up 18% in recent days as Chernett called for a company sale, praising the pacemaker-like Barostim neurmodulation system but saying that it would be in better hands under the umbrella of a large company. Shares are trading over $3 per share today.
The company’s board publicly responded today, saying it is “open to constructive engagement with all of its shareholders and will continue to pursue the best course of action consistent with its fiduciary duties to all shareholders.”
One potential acquirer that already has a strong relationship with CVRx is Johnson & Johnson, which already owned 15.2% of the company as of its most recent SEC proxy filings. New Enterprise Associates owned 7.7%, and Vensana Capital owned 6.5%. The company’s executive officers and directors owned another 16.6%.
