Lidak, Dissident Group Reach Settlement

Lidak Pharmaceuticals and a dissident shareholders committee reached a settlement to avoid a proxy battle for control of the antiviral drug developer. The shareholder group wanted to elect three members to Lidak’s board at the April 18 annual meeting. The settlement calls for a new board made up of four existing directors, three mutually agreed-upon independents and two committee nominees. On March 5, La Jolla-based Lidak fired David H. Katz as president and chief executive, after he criticized other board members for refusing an $80-million to $130-million loan from HealthMed Inc. to help market Lidak’s herpes drug, Lidakol. Closely held HealthMed holds a 5.4% stake in Lidak, and Katz, who remains a Lidak director, joined HealthMed’s opposition effort. Lidak shares, unchanged at $1.88 in Nasdaq trading, have fallen almost 45% since reaching a 52-week high of $3.63 on Aug. 15.