Activist hedge fund Farallon Capital Management has deepened its involvement with Japanese pharmaceutical giant Astellas Pharma, prompting the company’s leadership to publicly acknowledge ongoing engagement efforts, according to a report by Bloomberg.
Speaking to Bloomberg TV, Astellas CEO Naoki Okamura confirmed the firm is in dialogue with Farallon, which has amassed a stake of over 3%, according to a February Financial Times report. While Okamura declined to disclose the specifics of discussions, he characterised the interaction as constructive, saying he was “pleased that one of our investors sees potential value” in the business.
“Ultimately, all shareholders want to increase corporate value and we share exactly the same mission,” Okamura said. “We receive various proposals from shareholders, and if we see something that will contribute to enhancing our corporate value, we are willing to accept it.”
Farallon has reportedly been pushing for operational and governance improvements since at least 2020, having sent multiple letters to Astellas’s board. The hedge fund’s persistence comes at a critical time for the drugmaker, which is working to mitigate the looming revenue cliff from its prostate cancer drug Xtandi — a product that accounted for nearly half of Astellas’s revenue last fiscal year and is expected to face generic competition within two years.
As part of its strategic diversification, Astellas acquired Iveric Bio for $5.9bn last year, targeting growth in ophthalmology. Okamura said the firm is now focused on deleveraging following the acquisition, making capital allocation and balance sheet discipline a top priority.
While no formal shareholder proposals have been filed ahead of next month’s annual general meeting, the public acknowledgment of Farallon’s activism suggests growing shareholder pressure behind the scenes.
Astellas shares have fallen 7.4% year-to-date, underperforming the Topix Index’s 3.5% decline.
