No Quick Sale, Icahn Says in Letter to Biogen Idec Shareholders
Billionaire investor Carl Icahn wants Biogen Idec’s shareholders to believe he’s capable of doing more than just agitate for a sale of the company to the highest bidder. He wants them to think his people can bring valuable expertise to the board.
Two of the activist investor’s three nominees to the Biogen board, Alex Denner and Richard Mulligan, played key roles in the turnaround of New York-based ImClone Systems, Icahn said yesterday in a letter to shareholders filed with the Securities and Exchange Commission. A third nominee to the Cambridge MA-based Biogen board, Anne Young, would add valuable expertise in neurology, Icahn said. Young is chief of neurology service at Massachusetts General Hospital. Biogen is the world’s largest maker of drugs for multiple sclerosis, a neurodegenerative disease.
“It seems strange to us that Biogen does not have someone with her expertise in neurology on its board,” Icahn said in his letter. He summed up his proposed slate by saying, “We believe that research and development is at Biogen’s core and our nominees would look to renew the passions of Biogen’s researchers and scientists.”
It’s true that none of Biogen’s directors is a neurologist, and that neurological knowledge could come in handy if new side effects emerge related to its fastest-growing product, Tysabri. It’s also true that ImClone has been transformed from an industry joke into an emerging force in biotechnology. In the two years before Icahn arrived on Oct. 25, 2006, the company had three CEOs. Since Icahn took over the company, ImClone has mended a strained relationship with partner Bristol-Myers Squibb to co-market the cancer drug Erbitux, invested more in its pipeline of experimental cancer drugs, and settled two distracting intellectual property disputes. Shares of the company have climbed 36 percent under Icahn.
Icahn insisted in his letter to Biogen shareholders that he isn’t looking for a quick sale of the company. Still, if his nominees are elected to the board, and a suitor tries to buy the firm for a significant premium, they will “fight to ensure that such an offer was properly evaluated,” Icahn wrote. That isn’t surprising, since Icahn pushed for Biogen to initiate a sale last October, and offered his alternative slate of directors only after the company abandoned the process in December.
Will Icahn persuade shareholders to give his three nominees a seat on the 12-member board, or will investors prefer the company-approved slate of directors? It may make for some interesting theater between now and June 19, the day of Biogen’s annual shareholders meeting in Cambridge, when investors make their choices.