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SOURCE Echo Therapeutics, Inc.
PHILADELPHIA, June 5, 2014 /PRNewswire/ -- Echo Therapeutics, Inc. (NASDAQ: ECTE), a medical device company developing its Symphony® CGM System as a non-invasive, wireless continuous glucose monitoring system, today announced that Glass Lewis & Co., a leading independent proxy advisory service, has recommended to its clients that Echo stockholders vote the WHITE proxy card FOR both of the Echo Board of Directors' director nominees at Echo's Annual Meeting of Stockholders to be held on June 19, 2014. Glass Lewis' clients include institutional investors, mutual funds, pension funds and other fiduciaries. As previously announced, the Platinum Group, a dissident stockholder group led by Platinum Management (NY) LLC, is pursuing a proxy contest to elect Shepard M. Goldberg to the Echo Board at Echo's 2014 Annual Meeting in opposition to our highly qualified and very experienced director and Interim CEO, Robert F. Doman.
In recommending that Echo stockholders vote the WHITE proxy card FOR both of the director nominees recommended by the Echo Board, Glass Lewis concluded that it was not convinced that the board change proposed by the Platinum Group is warranted at this time. Glass Lewis also noted that the Platinum Group, as a dissident stockholder seeking minority board representation, had failed to nominate a qualified board candidate, free from significant conflicts. Glass Lewis also took issue with the Platinum Group's arguments that the Echo Board had mismanaged or failed to properly oversee the company's direction or suffered from serious governance concerns, noting as follows that it did not believe that the Platinum Group had made a compelling case to support such arguments:
"We believe a dissident shareholder seeking minority board representation must:(i)make a compelling case that the board either has mismanaged or failed to properly oversee the company's direction, or suffers from serious governance concerns; and (ii) nominate qualified board candidates, free from significant conflicts, In this case, we believe that the Dissident has failed to meet both aforementioned criteria."
Glass Lewis also took note of the past track record of the Platinum Group's nominee, Shepard Goldberg, who the Echo Board had previously interviewed and determined did not meet its criteria for Board membership. Mr. Goldberg is the first cousin and a longtime business associate of Michael M. Goldberg, M.D., Platinum's current designee to the Echo Board. Among other things, the Echo Board considered that the majority of Mr. Goldberg's career had been spent at a privately-held swimming pool products company, that the only public company board experience that Mr. Goldberg had was at companies where either Michael Goldberg or Platinum was an investor, and the potential effect of Mr. Goldberg's familial relationship with Michael Goldberg as well as his past and present professional relationships with him and with Platinum on his ability to represent the interests of Echo and all of its stockholders. Mr. Goldberg had also failed to respond to a request from the Echo Board requesting information on how he would address potential conflicts of interests with Platinum and Michael Goldberg. In assessing Mr. Goldberg's past record and his qualifications for membership on the Echo Board, Glass Lewis noted as follows:
"Perhaps the bigger argument to be made against supporting the Dissident's contest at this time lies with the track record of the Dissident Nominee. In particular, we note that Mr. Goldberg's tenure at three other public (or then-public) biopharmaceutical/biotech firms have been marred by significant declines in shareholder value (declines of between 85% and 100%), including one firm that had to file for Chapter 11 bankruptcy. In our view, this track record is not likely to engender much confidence in the Dissident Nominee's ability to enhance shareholder value for the Company."
In recommending that stockholders vote the WHITE proxy card to re-elect the Echo Board's highly qualified and very experienced director nominee, Robert F. Doman, who brings to the Echo Board over 30 years of executive level, international and domestic management, business development, commercialization, product development and strategic planning experience and extensive experience in the medical device and pharmaceutical industries, Glass Lewis recognized how new Mr. Doman is to Echo and how unreasonable it would be for stockholders to hold Mr. Doman accountable for Echo's underperformance, noting as follows:
"[W]e note that the management nominee that the Dissident is effectively seeking to remove at this meeting is Mr. Doman, who has served on the board for just over a year. Mr. Doman joined the Echo board in March 2013 as an independent, non-employee director, before later being appointed as executive chairman and interim CEO on August 26, 2013. Given Mr. Doman's relatively brief tenure on the Company's board thus far, and absent clear and compelling evidence that Mr. Doman has taken specific actions that are not in shareholders' best interests (which we believe the Dissident has failed to provide), we believe that it would be unreasonable for shareholders to hold Mr. Doman accountable for the Company's long-term underperformance at this time. Further, we note that for the brief unaffected period during which Mr. Doman has served as Echo's interim CEO (i.e., between August 26, 2013 and April 16, 2014), the Company's TSR [total shareholder return] was up approximately 30.3%, which was better than the average and median TSRs of the peer group over the same time period (18.7% and 7.6%, respectively)."
In its report, Glass Lewis also commented on the initiatives that the Platinum Group has proposed for Echo finding them to be vague and lacking in detail, noting as follows:
"Further, we believe that the Dissident has failed to put forth a compelling plan for the Company. Most of the initiatives being proposed by the Dissident (e.g., cutting costs and hiring a new permanent CEO) have already been undertaken by the current board, while some of the other initiatives (e.g., hiring strategic advisers and finding optimal financing alternatives) appear to us to be fairly vague and lacking in detail."
"We are very pleased that a well-respected, independent third party such as Glass Lewis has carefully reviewed the voting alternatives and recommends that stockholders vote for Echo's director nominees on the WHITE proxy card," said William F. Grieco, Echo's Lead Independent Director.
To protect the value of their investment, Echo strongly recommends that all stockholders vote for their Board's nominees on the WHITE proxy card TODAY-by telephone, Internet, or by signing, dating and returning the WHITE proxy card.
Echo is being advised in connection with the proxy contest by Morgan, Lewis & Bockius LLP and Alston & Bird LLP. Laurel Hill Advisory Group, LLC is serving as Echo's proxy solicitor.
Stockholders that need assistance in voting their shares or have any questions are urged to call Echo's proxy solicitor, Laurel Hill Advisory Group, LLC, at (888) 742-1305
About Echo Therapeutics
Echo Therapeutics is developing the Symphony CGM System as a non-invasive, wireless, continuous glucose monitoring system for use initially in the critical care setting. A significant longer-term opportunity may also exist for Symphony to be used in the hospital beyond the critical care setting, as well as in patients with diabetes in the outpatient setting. Echo has also developed its needle-free skin preparation device, the Prelude® SkinPrep System, as a platform technology to enhance delivery of topical pharmaceuticals.
Cautionary Statement Concerning Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 relating to expectations, plans or prospects for Echo that are based upon the current expectations and beliefs of Echo's management. The words "will," "may," "designed to," "outlook," "believes," "should," "anticipates," "plans," "expects," "intends," "estimates," "forecasts" and similar expressions identify certain of these forward-looking statements including statements regarding our revised proxy materials. These forward-looking statements are subject to certain risks and uncertainties that could cause actual events to differ materially from those expressed or implied by such forward-looking statements. Those risks and uncertainties include, but are not limited to, risks related to the actions of Platinum Management (NY) LLC and other activist stockholders, including the amount of related costs and the disruption caused to business and financing activities by these actions. Other risks and uncertainties that may cause actual events to differ materially from the statements we have made herein are identified and described in more detail in Echo's filings with the SEC, including, without limitation, its Annual Report on Form 10-K for the year ended December 31, 2013, its Quarterly Reports on Form 10-Q, and its Current Reports on Form 8-K. The forward-looking statements in this Press Release are made as of the date hereof. Notwithstanding changes that may occur with respect to matters relating to any forward looking statements, Echo does not expect to, and disclaims any obligation to, publicly update, amend or clarify any forward-looking statements whether as a result of new information, future events or otherwise. Echo, however, reserves the right to update such statements or any portion thereof at any time for any reason.
Important Additional Information
Echo has filed revised proxy materials with the SEC in connection with its 2014 Annual Meeting of Stockholders (including any adjournments, postponements or reschedulings thereof, the "2014 Annual Meeting"), including a revised definitive proxy statement and a revised definitive form of WHITE proxy card on May 9, 2014, in connection with Echo's solicitation of proxies. STOCKHOLDERS ARE URGED TO READ THE REVISED 2014 PROXY MATERIALS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT ECHO WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Stockholders will be able to obtain, free of charge, copies of Echo's revised 2014 Proxy Statement and any other documents filed by Echo with the SEC in connection with the 2014 Annual Meeting, when available, at the SEC's website (www.sec.gov), at Echo's website (www.echotx.com) or by directing a request to Echo Therapeutics, Inc., 8 Penn Center, 1628 JFK Boulevard, Suite 300, Philadelphia, PA 19103, Attention: Investor Relations. In addition, copies of the proxy materials, when available, may be requested from Echo's proxy solicitor, Laurel Hill Advisory Group, LLC, 2 Robbins Lane, Suite 201, Jericho, NY 11753 or toll-free at 1-888-742-1305.
Certain Participant Information
Echo, its directors and certain of its executive officers and employees are deemed to be participants in the solicitation of proxies from Echo's stockholders in connection with the 2014 Annual Meeting. Additional information regarding the identity of these participants and their direct or indirect interests, by security holdings or otherwise, is set forth in Echo's revised 2014 Proxy Statement and other materials to be filed with the SEC in connection with the 2014 Annual Meeting. Such information can also be found in Echo's Annual Report on Form 10-K for the fiscal year ended December 31, 2013, filed with the SEC on March 28, 2014.
For More Information:
Christine H. Olimpio
Director, Investor Relations and
Laurel Hill Advisory Group, LLC
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