Another large investor joins fight against Cypress management

The shareholder revolt that has been rocking Cypress Bioscience since late July expanded this week when a second hedge fund lashed out at the San Diego company’s management team and its expansion strategy.

“The only measurable results of management’s actions are the squandering of shareholder cash and a declining stock price,” wrote Richard Rofé, managing director of Arcadia Capital Advisors, in an open letter to Cypress executives. “The company’s behavior has been suspect and confusing, to say the least.”

Arcadia owns less than 5 percent of the drug developer’s stock, Rofé said.

For the last month and a half, Ramius LLC, another hedge fund and Cypress shareholder, has waged a campaign to acquire the company. However, that effort has been snubbed by Cypress executives.

Both hedge funds directed criticism toward previous acquisitions by Cypress that ended in failure and called on the company to hold off on further expansion.

Most of the company’s revenue comes from a fibromyalgia drug called Savella, which was developed by Cypress.

A spokeswoman for Cypress did not respond to a request for comment about the Arcadia Capital Advisors letter.