Carl Icahn Aims to Stick “For Sale” Sign on Biogen Idec Lawn Again
Billionaire investor Carl Icahn is making another move to gain influence over Biogen Idec. Icahn told the Cambridge, MA-based biotech company he is nominating a slate of four new directors for election to the company board at this year’s annual meeting, and he wants to increase the size of the board from 12 to 13 members.
Icahn’s nominees will be Alexander Denner, Richard Mulligan, Thomas Dueul, and David Sidransky. Denner and Mulligan are two of the directors that were unable to get elected to the Biogen board in June, the last time Icahn tried to gain a foothold on the board. Biogen issued a terse statement that said its board “will review the notice and consider it in light of the best interests of all shareholders.”
Biogen Idec was pressured by Icahn last year to sell itself to one of the large drugmakers that is seeking to fill up a dry pipeline of experimental drugs, as established blockbusters lose their patent protection. More takeover speculation has been floated in various reports about Biogen as a takeover target since Pfizer agreed last month to buy Wyeth for $68 billion.
But Biogen may have given acquirers some reason for pause this morning, around the same time it got Icahn’s notice of a power play. The company revealed in its fourth-quarter earnings report that a new case of a patient on the hit multiple sclerosis drug natalizumab (Tysabri) was diagnosed with a rare, often-fatal side effect called PML. Fourth-quarter revenue from the drug, Biogen’s fastest-growing product, reached $218 million, falling far short of the average $252 million analyst estimate, said Christopher Raymond of Robert W. Baird & Co., in a note to clients today. He downgraded the stock to “neutral.”
“While cross-currents from Carl Icahn’s renewed bid for board control could make for speculative upside from here, we are unconvinced that a credible strategic buyer will emerge,” Raymond wrote. “Combining this with the real potential for meaningful fundamental deterioration in 2009, we are retreating to the sidelines.”