Takeover rumors after hedge fund boosted stake

Last summer, it looked like Seattle Genetics was being targeted for a takeover.

The company's top shareholder, Baker Brothers Investments, went on a buying spree. The New York-based hedge fund increased its stake from 15 percent in March to a more formidable 22.7 percent by August, according to filings with the Securities and Exchange Commission.

The buying looked to be part of a pattern for the Bakers.

Earlier in the year, the firm made waves by snapping up a 23 percent stake in AnorMed, a Vancouver, B.C., biotech company.

It then mounted a proxy fight, arguing the company was underperforming, and successfully replaced AnorMed's board and senior management.

The Bakers' activism culminated in a bidding war for AnorMed by bigger companies, Genzyme and Millennium Pharmaceuticals.

Genzyme initially offered $8.50 a share but ultimately bought AnorMed for $13.50.

The Bakers said in an SEC filing in June that their holdings are solely for investment and they "do not have any plans or proposals" for transactions or management changes.

Felix Baker, portfolio manager with Baker Brothers and a Seattle Genetics director since 2003, declined to comment this week about the company. Seattle Genetics went public in 2001 at $7 a share.

This year, it has mostly traded in the range of $4 and $5 a share.

The company's chairman and chief executive, Clay Siegall, said his relationship with the Bakers is "very good," and downplayed any parallel to the AnorMed situation.

"We're not actively looking to be acquired," Siegall said.

"What you're seeing is an investment group that believes Seattle Genetics has a lot of upside potential and some exciting opportunities."

Luke Timmerman: 206-515-5644 or ltimmerman@seattletimes.com