Icahn to Nominate Three, Including Two Harvard Bigwigs, to Biogen Idec Board

1/28/08

Two prominent local academics are among a group of three people to be nominated to Biogen Idec’s board of directors at the company’s upcoming annual meeting, the Cambridge, MA-based biotech giant announced today. Biogen (NASDAQ: BIIB) received notice of the planned nomination came from entities affiliated with billionaire investor Carl Icahn, who as of January 24 owned nearly 10.4 million Biogen shares, or just under 4 percent, up from 8.8 million, or 3 percent, reported at the end of 2007′s third quarter.

Icahn’s move, coming after his unsuccessful push late last year for a sale of Biogen, is no big surprise. About a month ago Bob took a look at Icahn’s history with companies like ImClone and MedImmune and concluded that “given his track record, it seems reasonable to think that the activist investor will become more active on the Biogen front, perhaps beginning with trying to win a board seat and pressing more vigorously for whatever changes he thinks are needed in order to bring the company’s stock price in line with what he believes is the true value of the company.”

Indeed, two of the three people on the slate that Icahn intends to nominate at Biogen’s 2008 annual meeting (which will likely take place in late spring or early summer) are current members of the ImClone board: Alexander Denner, the managing director of two of Icahn’s investment funds, and Richard Mulligan, a professor of genetics at Harvard Medical School and the director of the Harvard Gene Therapy Initiative. Mulligan, a MacArthur “genius” award winner, is joined on the list by fellow Harvard Medical School professor Anne Young. Young is the chief of the neurology service at Massachusetts General Hospital, and the founder and scientific director of the hospital’s Institute for Neurodegenerative Disease.

Impressive credentials, to be sure, but electing all three to the board might necessitate bumping out some other big names, such as Cecil Pickett, Biogen’s president of R&D, or Phillip Sharp, MIT professor, Nobel laureate—and Biogen co-founder. (Mulligan, by the way, did part of his training in Sharp’s lab at MIT’s Center for Cancer Research.) That’s because Icahn is also proposing to amend Biogen’s bylaws to fix the board’s size at 12 members; that’s the size it is now, but under the current bylaws the number of directors is not fixed. The current terms for Sharp, Pickett, and longtime board member Lynn Schenk are all expiring this year, and each would have to be re-elected to remain on the board. (A fourth director, Thomas Keller, will have reached mandatory retirement age by the time of the annual meeting).

All of which sets the stage for some tricky jockeying for position over the next few months. Biogen of course had no comment beyond the statement that its board will “review the notice and consider it in light of the best interests of all shareholders of the Company.” The board’s options include putting up a completely separate slate of board nominees, or including some or all of Icahn’s picks on its own slate. And whether shareholders will be able to vote for each nominee individually or will be required to vote for one slate or the other depends on the specifics for the proxy that Icahn will ultimately file to make the nominations official. When exactly that proxy will be filed remains to be seen. Nothing like a little election drama to go with this year’s election drama, eh?

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