Carl Icahn: Biogen Idec Marriage Broker?

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and takeover artist. He has three main investment arms: Icahn Partners, his $7-billion hedge fund, the smaller hedge fund called Icahn Management, and a publicly traded private equity firm called American Real Estate Partners (NYSE: ACP), according to GuruFocus, a website that tracks the activities of leading investors. His style is straightforward, the site reports: “He takes minority stakes in public companies and typically pushes for change.”

There’s no reason to believe he is doing anything different with Biogen, which he has no doubt studied carefully. Indeed, according to a Fortune magazine profile, Icahn makes his investments with the help of two dozen associates. When he takes a stake in a company, although management is often quaking in its boots, it isn’t likely to signal bad news for the firm’s investors, either. Icahn’s team “has boosted the total market cap of its target companies by more than $50 billion in just over two years, spreading the wealth among shareholders far and wide,” Fortune reported.

Icahn doesn’t always get his way. Earlier this year, for example, he lost a proxy vote for a Motorola board seat. But as for his plans for Biogen, a look at Icahn’s strategy with other biotech companies might be more enlightening. One notable success story is MedImmune. Icahn’s group purchased shares in the Maryland firm, helping force its sale to AstraZeneca last April. What’s more, the sales price of $15 billion was twice what the company’s market value had been a year earlier, according to a nice writeup of Icahn’s activities by Bloomberg’s Luke Timmerman.

Another good example, but not yet the home run of MedImmune, is New York-based ImClone Systems (NASDAQ: IMCL). Icahn gained board control of ImClone last fall. In a familiar pattern, he first purchased shares in the company, then began pressing for management changes he felt were necessary to raise the firm’s value. After a brief fight, Icahn forced the resignations of some directors and the interim CEO, and then placed his own hand-picked representatives on the board. ImClone shares, trading earlier today at $32, have gained around 20 percent this year, but are trading well below their one-year high of $47.11.

SEC filings show that in addition to ImClone and Biogen, Icahn and his entities have shares in at least five other biotech and drug concerns: Adventrx Pharmaceuticals, Telik, Regeneron Pharmaceuticals, Cyberonics, and Enzon Pharmaceuticals.

In that sense, Biogen is just one of many Icahn biotech investments. But the company has been the frequent subject of takeover rumors. In May, when Biogen announced the buyback program that ultimately saw it shell out some $3 billion to purchase more than 56 million of its own shares, analyst Michael King of Rodman & Renshaw told BusinessWeek he saw a profitable biotech like Biogen as a compelling target for a large pharmaceutical maker. Pfizer is one company that has frequently been mentioned as a possible suitor.

King speculated at the time that Biogen’s management could well have made the buyback move to dissuade such an attempt. However, it is clear the buyback didn’t turn off Icahn. Things will likely get very interesting in the months ahead as the investor reveals more of his plans for Biogen.

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