According to Bloomberg, billionaire investor Carl Icahn is still pushing to sell Biogen Idec Inc. The news came just after Icahn added a director to the board in a deal to avoid his third proxy-battle with the company in as many years. According to Icahn, Biogen has a great pipeline with great drugs that should be sold to a big pharmaceutical company. He also proposed splitting the company into two separate business units, one focusing on neurology and the other on cancer.
Biogen, the world’s largest maker of multiple-sclerosis drugs, said in January that CEO James Mullen, 51, would retire in June after 10 years of leading the company. On his watch, Biogen temporarily recalled one of its top-sellers, the multiple sclerosis drug Tysabri, after it was linked to deadly brain-infections.
Biogen added Eric Rowinsky, an oncologist selected by Icahn, and Stephen Sherwin, chairman of the Biotechnology Industry Organization to the board. Icahn withdrew his proposal to limit the size of the board to 12 seats and placed two associates on the board after a proxy fight in 2009.
Biogen shares increased 20 percent this year. Today’s agreement gives Icahn three seats on Biogen’s board. The others are Alexander Denner and Richard Mulligan, who were added after a proxy contest last year. Denner is the former chairman of ImClone Systems Inc., where Mulligan was a board member. Icahn pushed for a sale of ImClone after winning a proxy fight in 2006. Eli Lilly & Co., of Indianapolis, agreed in 2008 to buy ImClone for $5.98 billion.
Biogen became embroiled for a battle for control with Icahn in 2007 when the company abandoned a plan to sell itself. Icahn, known for buying into companies he deems undervalued and pushing for a change or sale, lost an ensuing proxy fight with the company in June 2008. Besides Mullen, board member Bruce Ross is also retiring, and Brian Posner, the former CEO of ClearBridge Advisors LLC, and Nancy Leaming, the retired CEO of Tufts Health Plan, are up for election. One seat, formerly held by co-founder Phillip A. Sharp, is still open.
Biogen, and Dublin-based partner Elan Plc. pulled Tysabri, Biogen’s fastest-growing product, from the market in 2005 after three patients developed a rare brain-infection. The U.S. Food and Drug Administration allowed sales to resume in July 2006 after deciding benefits of slowing MS relapses outweighed the risk of the illness, called progressive multifocal leukoencephalopathy, or PML.
Since Tysabri returned to the market, Mullen has not reached his goal to have 100,000 patients use it. Tysabri is used by about 48,800 patients as of January 2010.
Icahn Partners LP and affiliates reported owning 16.1 million Biogen Idec shares, representing less than 6 percent of total outstanding shares.
Resolving the proxy challenge at Biogen allows Icahn to shift his focus to Genzyme Corp., to which Board Icahn has nominated himself and three associates.