Icahn Nominee Concedes Defeat at Biogen Idec Annual Meeting
[Updated below.] In a major vote of confidence for current management under CEO James Mullen, shareholders at Biogen Idec’s annual meeting this morning have evidently rejected the slate of board nominees put forth by investor Carl Icahn and approved the company’s choices instead. “We think we didn’t succeed in getting onto the board of Biogen, so we congratulate you guys,” said Icahn Partners managing director Alex Denner, one of the three nominees Icahn put forward, during a discussion period at the start of the meeting, which is still ongoing.
Biogen co-founder and board member Phil Sharp then went to the mike, defending what he said was outstanding research at the firm over the years—countering Denner’s previous charge that research has been slipping. “The nominees for the board have served us very well and obviously we would support their reelection,” said Sharp (who is himself up for reelection). Sharp pointed out that Biogen has four products in Phase 3 testing, with another on the way, eight in Phase 2. “This is a record of research accomplishment that’s outstanding,” he said. “I think the company’s in an excellent position to move forward.” Sharp received a warm round of applause after his remarks.
Icahn began building his stake in Biogen (NASDAQ: BIIB) in August, SEC filings indicate, just a few months after he earned huge payday through the $15.6 billion sale of MedImmune to AstraZeneca, a move he had pushed. Last fall, he began similarly exhorting Biogen to investigate a sale, a move to which Biogen quickly acceded. But early this year, about a month after the company’s management declared the sales attempt unsuccessful, Icahn nominated his own slate of three candidates for the Biogen board. The group, let by Icahn Partners managing director Alex Denner, has since laid out four main goals for Biogen, should the slate be elected: to boost research and development spending, improve employee morale, bolster relations with partners, and possibly cut expenses outside research.
You can read a lot more details here and here. And yesterday, we ran an exclusive interview with Denner, who added a bit more detail and his own personal reflection on Biogen’s research, drawing back on his days as an MIT undergrad.
Icahn’s plan was that by winning three of the four board seats up for election this year, he would be in position to seek all four up for grabs at next year’s meeting. That would give him a controlling seven seats on the 12-person board.
But today, without a single board representative going forward (the official tally of votes has not yet been announced), that goal seemed to have slipped largely out of his reach. Still, it is too early to declare Icahn dead in the water. He is still a major shareholder, and as such in position to advocate for change—something at which he excels, whether in the boardroom or outside it. Time will tell whether he will choose to continue the fight or focus his attentions elsewhere.
Update @ 10:15 am: The board meeting just broke up, and Biogen handed out a press statement saying “based on a preliminary count provided by its proxy solicitor, stockholders have elected all four of the Company’s nominees…” Shareholders also rejected Icahn’s proposal to fix the board at 12 seats.
Alex Denner, meanwhile, held an impromptu press conference outside the Academy building. He indicated that Biogen’s board had indicated its willingness to talk with Icahn’s representatives in the not-too-distant future, but declined to give any specifics of when the meeting might take place or what might be involved. He also said that his group had the support of at least some top 10 shareholders, and that given it is a major shareholder itself, “We really think we have a right to be on the board,” he said.
Biogen declined to make any of its executives available, but spokesperson Naomi Aoki said, “we’re very happy.”