Robert K. Jarvik, who once battled Washington to test the artificial heart, is fighting on another front. This time, it's a battle on Wall Street for control of Jarvik's company.
Jarvik is chairman of Symbion Inc. of Salt Lake City, which makes the Jarvik-7 artificial heart and artificial ears. On Wednesday, he disclosed that he is opposed to an $8.8-million offer for control of Symbion by the New York City venture capital firm Warburg, Pincus Capital Co.
In a filing with the Securities and Exchange Commission, Jarvik said the $3.50-per-share offer, which expires April 22, is too low and should be withdrawn. The filing came one day after Symbion's five-member board voted to remain neutral, saying the financial support that a controlling shareholder could "give to the company may be offset by a reduction in the independence of management."
Officials of Pincus Capital Co., which currently owns 25.8% of Symbion's stock, could not be reached for comment Wednesday. The company would acquire a 59.3% stake if its bid for 2.5 million shares is accepted.
Pincus' bid for control of Symbion comes a decade after Jarvik, who holds an 8% interest in Symbion, wrested control of the firm from Dutch-born scientist Willem Kolff, who developed the first useful artificial kidney and worked with Jarvik at the University of Utah on perfecting the artificial heart.
In a brief interview Wednesday, Jarvik indicated that he disagreed with the Symbion board's neutrality, because he believes that Pincus--through Symbion board member Rodman Moorehead--has access to material confidential information, which can't be made public, and that the price is too low.
Jarvik would not say what price he thinks would be appropriate. But he said that "our company is making excellent progress," apparently sensing that sharply higher sales of its cardiovascular products may soon help Symbion produce profits for the first time in its 10-year history. For the year ended Dec. 31, Symbion reported a net loss of $1.5 million on revenue of $6.7 million.
According to the SEC filing, Jarvik has entered into a severance agreement with Symbion that requires the company to make certain payments to him if his employment is terminated without cause within two years following a change in control. The filing didn't indicate how much money he would receive under those circumstances. But in a 1986 prospectus, Symbion listed Jarvik's annual salary, including bonuses, at $128,000.