Icahn Gets One More Seat on Biogen Board
[Updated --- 3/22/10, 11:30 am Eastern time] There will be no proxy battle between billionaire Carl Icahn and Biogen Idec this year. Cambridge, MA-based Biogen (NASDAQ:BIIB) says this morning it has struck a deal with Icahn in which two new members have been added to Biogen’s board of directors, including one of the candidates Icahn nominated back in January.
The deal gives Icahn greater control over Biogen’s board and Biogen a reprieve from what could have resulted in a third year of wrangling with Icahn over board seats at its annual meeting. Icahn has agreed to back Biogen’s slate of candidates for open board seats at the company’s annual meeting and drop any plans to wage a proxy battle with the company this year.
As part of the pact, Icahn’s nominee Eric Rowinsky and biotech industry veteran Stephen Sherwin, Biogen’s pick, have joined Biogen’s board of directors. Rowinsky and Sherwin are two of the four nominees that Biogen will endorse and now Icahn will support for election to the firm’s board later this year. Rowinsky and Sherwin will need to be elected at the annual meeting to stay on the board because their appointments expire this year. As planned, Biogen CEO James Mullen, who recently announced his plans to retire, and Biogen director Bruce Ross are finishing their terms on the board and will not seek reelection. (Editor’s note: More detail about the appointment of Rowinsky and Sherwin to Biogen’s board was added to this paragraph.)
Biogen’s deal with Icahn comes as it searches to replace Mullen, who has often been a target of Icahn’s criticism related to the poor performance of the company’s stock. Mullen plans to retire in June. The deal could be an effort from both sides to make the company more attractive to a prospective CEO to replace Mullen. (Who wants to take over a company pitted in a proxy battle, let alone one with an influential investor like Icahn?)
Icahn has also agreed to end his petition to amend Biogen’s bylaws to limit the number of members of the company’s board to 12. The company is expected to operate temporarily with 13 board members until this year’s annual meeting, after which the number will be 12. At that point, Icahn, who gained two seats on the company’s board last year, will control 25 percent of the board. He has been a proponent of trimming expenses and reprioritizing R&D efforts at the company to boost its stock price.