In Aftermath of Proxy Fight Amylin Pharmaceuticals Investor Expresses Concern Over Empty Board Chair Seat

8/7/09Follow @bvbigelow

After a bruising proxy battle ousted Amylin Pharmaceuticals’ chairman and lead outside director, the San Diego biotech issued a statement on June 2 that seemed to signal a cease-fire with dissident shareholders (including Carl Icahn). “We look forward to working with all our new directors to bring transformational medicines to patients and to drive sustainable and profitable growth,” the company said.

But have the directors of the San Diego diabetes drug developer really been able to bury the hatchet?

One sign they may not have is the fact that in the two months since shareholders ousted chairman Joseph Cook and director James Wilson—and elected four new directors to Amylin’s 12-member board— Amylin has yet to announce a new chairman. Two of Amylin’s longtime directors, founding CEO Howard “Ted” Greene and Ginger Graham, another former CEO, were more or less forced to resign in April to make room for the company’s slate of new board candidates. Votes were cast on May 27th at Amylin’s annual shareholders meeting.

Whether that’s enough time for a corporate board to choose a new chairman is a matter of debate. Aside from telling me the company has no information concerning a new chairman, Amylin didn’t have much to say. When asked if continuing dissension is prolonging the board’s deliberations on the matter, spokeswoman Anne Erickson e-mailed this statement to me:  “Our Chairman of the Board is elected each year following our Annual Meeting of Stockholders by the newly-elected Board. With four new Directors, the Board is working together to make a thoughtful decision about this very important role to the organization. Amylin welcomes all four new Directors to the Board and looks forward to a productive working relationship.”

Those four new directors include two who were elected from the company’s slate of nominees—former Icos chairman and CEO Paul N. Clark and former Novartis CEO Paulo F. Costa. The other new directors came from the dissident camps—Alex Denner has served as a portfolio manager for Icahn, and Kathleen Behrens, a consultant and former managing director of RS Investments, was nominated by Eastbourne Capital Management of San Rafael, CA.

Since Eastbourne Capital holds a 12.5 percent stake in Amylin, I checked in with the firm’s founder and portfolio manager, Rick Barry, via e-mail:

Xconomy: Is Amylin’s board having difficulty electing a new chairman?

Rick Barry: We don’t know, but it has been over two months since the annual meeting and there is no announcement regarding a new Chairperson. This concerns us and is likely to concern all other Amylin shareholders.

X: Can you tell me which Amylin directors Eastbourne views as appropriate candidates for board chairman?

RB: Of the four newly elected independent directors, Paul Clark and Paulo Costa were selected after a rigorous process by the Company’s corporate governance committee. They were shown to have excellent qualifications and Amylin deemed them desirable additions to maximize value for all Amylin Shareholders. We too supported their election, as did an overwhelming majority of the other shareholders. We believe that either of these two individuals would be an excellent choice for Chairperson.

X: Are there any current directors that Eastbourne is unwilling to support?

RB: We believe the Board needs to be lead by someone who has a fresh perspective, unburdened by past decisions with ample time and a successful track record. We would support any of the four newly elected independent directors.

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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