[Update, 3:05 pm Eastern]
Billionaire investor Carl Icahn’s representatives say they have pulled out a victory in their proxy contest with Biogen Idec, winning two of the four seats that were up for grabs in a shareholder election. The official results weren’t yet announced, as the company adjourned the annual shareholder meeting without declaring who won.
Alex Denner, an Icahn portfolio manager, and Richard Mulligan, a professor at Harvard Medical School, told a group of reporters during a recess in the meeting this afternoon they believe they won seats on the Biogen board. They based their comments on feedback from a proxy solicitation firm, although they didn’t provide hard numbers or a margin of victory.
The mood was tense, just minutes before shareholders stepped back into the meeting when it reconvened at 2 pm. “This could have happened in a more dignified way,” Mulligan said to the group of reporters. When one reporter asked he and Denner if they considered this to be a victory, Denner said yes.
Then, at 2 pm, Biogen chairman Bruce Ross called the meeting to order. He made his comments brief. The polls were closed, he said, but results are still being tallied and the meeting would have to be adjourned until a final count is available, Ross said. The final result will be made available when shareholders re-convenes later this month at Biogen headquarters, he said. Biogen Idec spokeswoman Naomi Aoki said the company plans to issue a statement shortly on the day’s events.
Denner clarified things a little more in a follow-up call to my boss, Xconomy editor-in-chief Bob Buderi, after the meeting was adjourned. “From what our sources tell us it’s very clear,” that he and Mulligan had won, Denner says. But, “I guess you never know.” The polls are closed, Denner says. So presumably that indicates there’s no more possibility of campaigning for more votes that might change the outcome.
It was an anticlimactic end to a tense series of events. Earlier in the day, Ross dismissed calls from Icahn’s representatives to announce the voting results, and instead declared a recess in the meeting at about 11 am. That prompted Icahn to accuse the company of trying to manipulate the voting process, with Denner at one point blurting out to Ross that, “this is not North Korea.”
The fight is over the future direction of the Cambridge, MA-based biotech company (NASDAQ: BIIB), the world’s largest maker of multiple sclerosis drugs. Icahn, who holds the fourth-largest position in the company with 5.6 percent ownership stake, launched a blistering attack on the company this proxy season for failing to introduce any new drugs since 2004, for botching the marketing of its existing products, letting expenses get out of hand, and for a stock price that has lagged its peers. Icahn said the company suffers from “failed leadership” and he suggested the company consider splitting into two pieces, one focused on cancer research and the other on inflammation, to sharpen its focus.
Biogen fought back, as it did a year ago, when Icahn also tried to gain influence on the company’s board. It countered that its pipeline of drug candidates is strong, physicians are regaining confidence in its fastest-growing multiple sclerosis drug after a couple of safety scares, and that splitting the company up would be counterproductive because it would raise expenses and inefficiencies. Icahn’s ideas would “destroy shareholder value,” the company said.
If Denner and Mulligan do end up victorious, they will win three-year terms to the Biogen board, which has 13 members. Their candidacy gained significant currency last month when RiskMetrics Group, the largest and most influential advisor to institutional investors on proxy elections, endorsed them for the Biogen board. The other Icahn nominees were Thomas Deuel of The Scripps Research Institute and David Sidransky of Johns Hopkins University School of Medicine.
There was no word on the outcome of an Icahn-backed resolution about whether the company should reincorporate from Delaware to North Dakota. Corporate laws in North Dakota make it easier for shareholder activists like Icahn to mount successful proxy campaigns to take over company boards.
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