Icahn Aiming for Amylin Sale to Eli Lilly

Xconomy San Diego — 

Billionaire investor Carl Icahn wants San Diego’s Amylin Pharmaceuticals to sell itself to Eli Lilly, its diabetes drug marketing partner.

Icahn’s intentions were revealed today in a letter that Amylin director James Wilson wrote to Icahn as the two sides exchange salvos in a power struggle to control Amylin. In his letter to Icahn, which was filed today with the SEC, Wilson says a sale to Lilly would be premature because Amylin (NASDAQ:AMLN) has yet to garner FDA approval for a longer-acting version of its diabetes drug exenatide (Byetta). Amylin and Eli Lilly (NYSE:LLY) co-market the drug in its approved version injected twice daily, and the two companies are working on getting permission to sell the drug in a once-weekly formulation. Icahn has been locked in a proxy battle over control of Amylin’s board of directors, and in January he submitted his own slate of five candidates to take seats on the board.

Wilson also rejected Icahn’s desire to cut Amylin’s current budget by 30 percent, saying that the biotech firm had already reduced expenses by 16 percent in the first quarter of 2009 and such a cut would hinder efforts to launch the new version of Byetta.

Wilson’s letter follows Icahn’s denouncement of Amylin chairman Joseph Cook last week. Icahn, who controls nearly 10 percent of Amylin’s stock, called for Cook’s resignation for his part in the company’s recent troubles. Amylin’s stock price has not yet recovered from the hit it has taken since the FDA reported last summer that six patients on Byetta—which accounts for about 90 percent of Amylin’s revenue—had developed life-threatening pancreatitis.

Amylin’s common stock traded at $10.20 per share at 10:26 am Eastern today, down about two-thirds from the price at the time of the FDA’s Byetta warning last August.