The Biogen Idec boardroom has seen a lot of turnover in the past few months, and who ends up filling the empty slots could say a lot about whether the Cambridge, MA-based biotech company (NASDAQ: BIIB) will have another proxy fight with billionaire investor Carl Icahn on its hands this spring.
Since Icahn won a pair of board seats at the contentious shareholder election in June, two other directors have resigned (MIT biologist Phil Sharp and former Biogen R&D head Cecil Pickett) while two more have announced they plan to step down soon: Marijn Dekkers will leave the Biogen board on January 1, while Biogen chairman Bruce Ross plans to retire at the 2010 annual meeting.
Simple math says that’s four directors leaving, and four replacements are needed, but it’s not that simple. Biogen expanded its board to 13 members last July with the addition of investor Brian Posner. The recent departures mean the board will be down to 10 members as of January 1, with Ross serving a few more months until the 2010 annual meeting, says Biogen Idec spokeswoman Naomi Aoki. But the board also voted at its October meeting to shrink back down to 12 members. That means the board is currently looking to fill just two open slots, Aoki says.
From the outside at least, this looks like an opportunity for the two new board members from Icahn’s slate—portfolio manager Alex Denner and Harvard Medical School professor Richard Mulligan—to gain a couple more allies in their cause to change how the company is run. Icahn launched blistering attacks last spring, accusing the company of suffering from “failed leadership” that hasn’t been able to produce as many innovative new products in recent years as its peers. Denner and Mulligan haven’t said much of anything publicly about how their work for the board is going so far, or whether they see the need to win more allies in next spring’s election to implement their goals.
Denner, when reached by telephone, declined to comment about what kind of opportunity may arise from the boardroom vacancies, or the likelihood that another proxy battle could happen this spring.
When asked about how the board is getting along with Denner and Mulligan on the board, Aoki, the company spokeswoman, offered this: “All the board members, including Alex Denner and Richard Mulligan, have been working in the interest of shareholders, and working constructively to serve the company.”
The guess here is that the board will chose its two new members very carefully, to be acceptable to both long-time members of the Biogen board and to Icahn. If the Icahn group sees the two new Biogen directors as defenders of the old guard, or if it perceives that some kind of numbers game is being played to marginalize them, then the odds will increase that shareholders will see another hotly contested election in 2010.