Carl Icahn Makes Move on Amylin Pharmaceuticals

1/29/09Follow @xconomy

Carl Icahn has sized up one of San Diego’s biggest biotech companies, Amylin Pharmaceuticals, in the crosshairs. The famed billionaire investor said today he has bought up an 8 percent stake in the company, and that he intends to nominate a slate of five new directors to Amylin’s 12-member board.

Icahn made the announcement today in a filing with the Securities and Exchange Commission. It’s the latest big power play for Icahn, who has built a track record in recent years of buying shares of life sciences companies in hopes of turning them around and encouraging a profitable sale to a larger drugmaker. The strategy worked last year, when one of his portfolio companies, New York-based ImClone Systems was sold in November to Eli Lilly for more than $6 billion. He came up short in his bid to take control, and possibly force a sale of Cambridge, MA-based Biogen Idec (NASDAQ: BIIB).

Amylin (NASDAQ: AMLN) has run into some hard times. Sales of its biggest-selling product, exenatide (Byetta) for diabetes, fell 8 percent in the fourth quarter to $162.7 million. That’s largely because the FDA warned physicians in August of several cases of patients who took the drug and developed pancreatitis, including two patients who died from the condition. Amylin shares fell 71 percent on the year, partly because of the debacle. The company, and its partner, Eli Lilly, are looking for salvation from a version of the drug that can be injected just once a week, instead of twice a day with the current drug. The companies hope to file an application this year to the FDA for permission to start marketing the once-weekly drug.

Amylin issued a brief response today to Icahn’s public filing. The company’s corporate governance committee is in the process of recommending directors for election at its annual meeting, and has taken a look at two people discussed with representatives of Icahn. The filing from Icahn says those discussions took place, but no agreement was reached, so it plans to nominate its own slate of five directors. Sounds like this year’s annual meeting will be more interesting than the usual coffee-and-cookie affair.

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