By Svea Herbst-Bayliss
NEW YORK (Reuters) -Prominent healthcare entrepreneur Ron Zwanziger warned on Monday he may pursue a more “adversarial path” if the OraSure Technologies board continues to resist his offer to buy the medical devices company, according to a letter seen by Reuters.
OraSure’s stock price has fallen further in the weeks after Zwanziger’s unsolicited all-cash offer, made earlier in the summer, was rebuffed. Other investors have grown concerned and reached out to Zwanziger, he wrote, and Monday’s letter dialed up the pressure for a deal.
“If the Board is not willing to entertain a collaborative discourse, we will be left with no choice but to consider all alternatives available,” the letter said. “We would prefer to work together with you in a collaborative fashion to realize the full value potential for all shareholders, rather than pursuing a more adversarial path,” the letter continued.
The letter did not spell out the options, but analysts said they could include running a board room challenge.
A representative for the company did not immediately respond to a request for comment.
In June, Zwanziger submitted a proposal to buy the Bethlehem, Pennsylvania-headquartered company, known for its COVID-19 rapid antigen tests, for between $3.50 and $4.00 a share, Reuters previously reported.
On Monday, OraSure’s stock price traded at $2.98, down more than 11% in the last four weeks. The stock price has fallen 32% in the last 12 months.
“As time passes without any productive engagement between ourselves, not only do your cash reserves and share price decline, but our offer price may be lowered or withdrawn,” the letter said.
Zwanziger, a serial deal maker who cemented his reputation through at-home blood glucose testing, could not be immediately reached for comment.
Zwanziger has built and sold a handful of diagnostic companies during his long career, and sold diagnostic test manufacturer Alere Abbott Laboratories in 2017 for around $5.3 billion.
In Monday’s letter, Zwanziger references OraSure’s drop in second-quarter revenue and expresses concern that guidance for the third quarter fell short of Wall Street’s consensus expectations. He also said the company’s $40 million share repurchase program aimed at propping up the share price has “failed.”
OraSure has been attempting to diversify its business and purchased Sherlock Biosciences late last year for its molecular diagnostics platform.
Point of care diagnostic companies offer accurate results in real time to measure cholesterol, and detect flu and pregnancy, for example. But the industry still remains highly fragmented with companies such as Danaher, Siemens, Roche and Thermo Fisher Scientific capturing the biggest market share.
(Reporting by Svea Herbst-Bayliss; Editing by David Gregorio)
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