Echo Therapeutics (NSDQ:ECTE) revealed this week that it is in the midst of a proxy battle with its largest shareholder, Platinum Management, which owns nearly 1/5th of the company’s stock.
In regulatory documents filed with the federal Securities & Exchange Commission, Echo officials urged shareholders to reject a move by Platinum to nominate Shepard Goldberg to the board in place of current CEO Robert Doman, who has been leading the company since the resignation of Patrick Mooney last August.
"Stockholders are advised that Echo does not endorse the election of the Platinum Group’s nominee as director," company officials said in regulatory filings. "The Platinum Group’s purported nominee, Shepard Goldberg, is a first cousin and long-time business associate of Michael M. Goldberg, M.D., a current member of the Echo Board. Dr. Goldberg was appointed to the Echo Board on February 27, 2014 as a designee of Platinum Partners Value Arbitrage Fund L.P., a member of the Platinum Group, which has a right to designate a director pursuant to a stock purchase agreement. Platinum Partners named Dr. Goldberg as its designee to the Echo Board after the Echo Board informed Platinum Partners that, after interviewing Shepard M. Goldberg and reviewing his credentials, it did not believe that Shepard M. Goldberg met the Echo Board’s criteria for Board membership."
The Philadelphia-based medical device maker has had a rough go over the past year. Echo reported net losses of $19 million on $27,000 in sales during 2013 as it continues product development and clinical studies of its Symphony CGM System for the treatment of diabetes. The company announced a major restructuring last fall in which it laid off 1/3rd of its staff.
Platinum Management, which owns 19.9% of Echo’s common stock, earlier this month sent a letter to the company stating its intention to nominate Shepard Goldberg in opposition to Doman.
Echo officials called for shareholders to reject Goldberg’s nomination and defended Doman as a valuable asset to the company.
"Mr. Doman brings to Echo’s 5-member Board over 30 years of executive level, international and domestic management, business development, commercialization, product development and strategic planning experience with specific concentrations in medical devices and pharmaceuticals," according to a company statement. "Most recently, Mr. Doman served as President and Chief Executive Officer of publicly-traded DUSA Pharmaceuticals, Inc., which was successfully sold to Sun Pharmaceuticals in a $230 million transaction in 2012."
