Amylin, Biogen Idec Stand to Benefit from Icahn Board Victories

Biogen Idec (BIIB) over-explained its drug development, then called for an extra long recess, in order to delay the shareholder vote whereby activist investor Carl Icahn was trying to repeat his success with Amylin (AMLN) Pharmaceuticals and add four representatives to Biogen Idec's board. It appears BIIB might have been contacting major institutional shareholders and trying to convince them to change their minds. Does the change of power for billion dollar companies really come down to whoever can delay a vote by boring an audience by talking amino acids all morning? Playground tactics in the world of biotech.

Nevertheless, in the end, Mr. Icahn managed to get two of his four nominees on the Biogen Idec board despite the Biogen filibuster. With the recent Amylin victory (added 2 board members there as well), Mr. Icahn is now clearly on a roll, undoubtedly helped by collapsed stock markets and biotech share prices which make any argument for management change more compelling. Still, the benefit of market sentiment aside, Icahn's victories are likely to be positive for AMLN and BIIB's future realization of value and stock price performance. It's nice to know that someone with influence is clearly lined up with shareholder interests, given Mr. Icahn's sizable stake. This is better than can be said for most companies.

There was an early indication BIIB might be employing stall tactics. The head of research and development got up and took a super deep dive into Biogen Idec's drug pipeline. It was the kind of detail you'd expect to hear at an analyst meeting. Usually these guys get up and simply give investors a view from 35,000 feet of what's in the hopper. This was dense...and boring for most of the shareholders (not to mention reporters) in the room. One reporter referred to it as a filibuster.

I mean, we're here to cover the proxy battle with Icahn. Let's get on with it.

After the R&D thing, the company announced there'd be a five-minute break. Then they came back and said the meeting would be in recess until 2 o'clock in the afternoon. What?! Now, this is gettin' good.

Icahn's people almost immediately filed a court motion to close the polls and invalidate any votes that were changed or cast after their first request this morning to stop the voting.

Icahn and Eastbourne Capital just won two seats on the Amylin [AMLN 11.64 --- UNCH ] board and ousted the chairman and lead independent director. My guess is he's probably feeling like he could be on a roll here.

Biogen Idec is clearly trying to stop him.

Disclosure: The author holds shares in AMLN.

Comments

[Idiotbuster:]

If Carl I managed to sell Biogen to a big Pharma, you will get a nice premium and that is it... If Carl couldnt, Biogen will keep on growing at impressive rates and double stock price several times over over the long run.. Which do you prefer? There is not many companies with the great growth that Biogen is enjoying... Carl ought to go to General Motors and kick cans around instead..

Jun 16 03:33 PM

[svygear:]

Another diabetes play - ACCP:
ACCP's oral insulin provides a pharmacological response (lowering of blood glucose levels in an animal model of diabetes) equivalent to 90% of that achieved by insulin delivered subcutaneously. Major biopharmaceutical companies evaluating the technology for potential applications for oral delivery of insulin, hGH, siRNA and monoclonal antibodies: pitch.pe/15552

Jun 17 02:50 PM