Amylin Dissidents Ought to Win Proxy Fight, Influential Advisory Firm Says
The investors who want to shake up the boardroom of San Diego-based Amylin Pharmaceuticals have made a convincing argument, and three of the five directors they have nominated ought to win election against the company’s slate of directors, according to RiskMetrics, an influential firm that advises institutional investors on proxy votes.
The recommendation from RiskMetrics, formerly known as Institutional Shareholder Services, is a coup for Eastbourne Capital and billionaire Carl Icahn, who are pushing for a shakeup at Amylin (NASDAQ: AMLN). Eastbourne, which owns a 12.5 percent stake in Amylin, has nominated three directors to the company’s 12-member board, and two of them were recommended—Kathleen Behrens and Charles Fleischman. Icahn has also nominated two other directors of his own to the Amylin board, and one, Alex Denner, received a recommendation from RiskMetrics. The election is scheduled for May 27.
“We strongly agree with RiskMetrics’ summary that Amylin has ‘not fired on all strategic pistons,’ and that nominees from Eastbourne and Icahn will likely add long-term value to the Board,” said Rick Barry, founder and portfolio manager at Eastbourne, in a statement.
Not surprisingly, Amylin said in a statement late today it was “disappointed” that RiskMetrics came down in favor of the Eastbourne slate of directors.
“We are disappointed that RiskMetrics has recommended three dissident nominees to our annually-elected board,” Amylin said. “The company urges shareholders to vote FOR Amylin’s highly-qualified director nominees who have extensive experience in biopharmaceuticals and diabetes, as well as the valuable sales and marketing expertise necessary to most effectively guide Amylin.”
Amylin is coming off a very rough year. Sales of its biggest-selling product, exenatide (Byetta) for diabetes, fell 8 percent in the fourth quarter to $162.7 million. Demand fell off for the drug in August, when the FDA warned physicians 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 during 2008.
The company announced two significant rounds of cost cuts—cutting 340 jobs in November, and another 200 employees earlier this month—in an attempt to turn cash-flow positive by the end of 2010. It is also pinning its hopes for a turnaround on the introduction of a new version of exenatide that can be injected far less frequently—once a week instead of twice each day.
The company’s strategy to maximize sales, and manage the future prospects of exenatide, haven’t been good enough … Next Page »