Biogen Idec just added a member to its board of directors.

Boring, you say. So what?

Ok, given that the Cambridge, MA-based biotech company (NASDAQ: BIIB) just emerged triumphant last month from a blistering fight with billionaire investor Carl Icahn, who wanted to take over three of the company’s 12 board seats, we couldn’t help but wonder if there’s something more than meets the eye going on here.

So we asked. Does adding Brian Posner to the board and expanding it to 13 seats, while maintaining bylaws that put four seats up for election each year, provide an extra line of defense against a certain activist shareholder?

“That really wasn’t our motivation,” says Biogen spokeswoman Naomi Aoki. “One of our directors knew of his credentials, and thought he has good capabilities. It was about adding his experience on Wall Street and the investment community.”

It turns out Posner also has a direct connection to Icahn himself. Posner, a private investor and former hedge fund manager, was on the same side as Icahn in his recent fight to take over Yahoo (NASDAQ: YHOO). Posner’s name was on the list of 10 new directors Icahn nominated to the Yahoo board in May, along with Dallas Mavericks owner Mark Cuban. (Yahoo settled its dispute with Icahn earlier this week, by giving him three of 11 seats on its board. No word on whether Posner will get one of those Yahoo seats.)

So does this mean that Biogen’s board is throwing Icahn, still a powerful shareholder in the company, a bone by picking one of his allies for the board? Or, did they find someone familiar with Icahn’s thinking who can help defend the fort?

Aoki dismissed both of those rationales, saying Biogen drafted him solely for his credentials and capabilities. When asked if Icahn was involved, she said, “Mr. Icahn was not involved in the decision to nominate or elect Mr. Posner. This was done independently of Mr. Icahn.”

The rest of Posner’s background includes a stint as CEO of ClearBridge Advisors, a subsidiary of mutual fund giant Legg Mason. Before that, he co-founded and ran a hedge fund called Hygrove Partners from 2000 to 2005, and previously worked as a portfolio manager at Fidelity Investments.

The addition of Posner, 46, gives Biogen three directors with lots of Wall Street experience, counting Robert Pangia and the newly elected Stelios Papadopoulos. But Posner is the only one with hedge fund experience on his resume. He was recruited to the board by an existing member, and he was elected unanimously by the rest of the members, Aoki says. His term began July 23 and runs through the 2010 annual meeting, she says.

For taking on the directorship, Posner got 39,900 stock options that he can exercise at $71.38 a share, according to a regulatory filing. The stock has climbed 25 percent since the beginning of the year, so we’ll be watching the SEC filings to see if Icahn decides to take some profits and move on, or continue his quest to take over and sell the company for an even higher price. If Icahn continues the push, we’ll find out whether Posner is really his friend or foe.

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It reminds me of a playground tug-of-war between little kids. Only there’s $40 billion-plus at stake. In any case, the Microsoft-Yahoo battle is heating up again, and this time things could really get nasty. As you might have noticed, there has been a huge flurry of activity and coverage over the past day or so, and I want to point out a few observations that could be particularly telling.

Yesterday, no doubt to help get things rolling, billionaire investor Carl Icahn published an open letter to Yahoo shareholders in which he described having talks last week with Microsoft CEO Steve Ballmer, some of which he said lasted an hour. The gist of the letter was that he and Ballmer have gotten serious about putting a previously aborted deal for Microsoft acquiring Yahoo back on the table. Microsoft also released a statement confirming that acquisition talks with Yahoo could resume if Icahn manages to replace all or part of Yahoo’s nine-member board after the company’s shareholder election on August 1.

Yahoo shot back with a statement of its own, saying it “continues to stand ready” for negotiations and adding that “if Mr. Icahn has an actual plan for Yahoo” other than forcing it to capitulate and accept Microsoft’s offer, then Yahoo would listen. On yesterday’s news, Yahoo (NASDAQ: YHOO) shares rose 12 percent to close at $23.91, and are up to $24.64 as of 4:45 pm ET today.

Let’s back up for a minute. In early May, talks between Microsoft and Yahoo fell through after Yahoo walked away from the Redmond software giant’s $33-a-share, $44.6 billion takeover bid. Icahn, who has since amassed a small stake in Yahoo, then launched a bid to unseat the company’s management and board, claiming that the latter had “botched” the deal.

There has been solid coverage in the Seattle P-I, Bloomberg, and many other outlets. Much of the analysis points to the increasing likelihood of a Microsoft takeover—because Yahoo’s profits are narrowing, its executives are leaving, and it can’t compete with Google on its own. (My informal chats with ex-Microsofties suggest that Yahoo should have seen this coming and is getting what it deserves.)

For instance, David Kirkpatrick of Fortune argues that Microsoft needs to boost the number of Internet searches on its sites to compete with Google, and Ballmer and Co. won’t be denied: “The only way Microsoft can compete with what the business of Google really is—a large marketplace for advertising and searches—is to somehow achieve much greater scale. No method of creating dramatically greater scale seems available other than combining with Yahoo’s search.” And in another Fortune piece, Richard Siklos explains “why Yahoos shouldn’t underestimate Icahn.” Siklos argues that Icahn’s “brilliant touch for ferreting out weakness in big corporate situations” and public-relations savvy makes him a formidable opponent for Yahoo, which “might try to give Icahn a couple of seats on its board to make his proxy fight go away.” (He also points out that one of Icahn’s proposed board members is Mark Cuban, the outspoken and sometimes-controversial owner of the Dallas Mavericks—not sure how that one will go over.)

But more interestingly, the opinion tide may be turning against Microsoft because of questions about its motives. Michael Arrington of TechCrunch writes that until today he’s been a big supporter of Microsoft’s takeover plan because the Internet needs competition in the search market, and “Google controls too much market share and too much related search revenue.” However, after yesterday’s “shenanigans” and “complete nonsense,” Arrington now says Microsoft and Icahn have crossed a line. His take is that Microsoft has been toying with Yahoo after taking its initial rejections too personally. “It’s no longer just about business, it’s about destroying and humiliating the people who embarrassed Microsoft,” he writes.

Saul Hansell of the New York Times concurs, writing that one possible explanation for Microsoft’s actions is that “it wants to destroy Yahoo rather than buy it.” This is an interesting angle to watch, but I would say it’s still too early to tell what Microsoft really wants—and that’s exactly the way Microsoft wants it. In any case, Hansell concludes, “Microsoft seems to be neither a trustworthy partner nor a reliable bidder for Yahoo, no matter who’s on the Yahoo board of directors.”

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Activist investor Carl Icahn launched another salvo in his battle to force a sale of Biogen Idec (NASDAQ: BIIB), filing a suit yesterday in a Delaware court demanding that the Cambridge biotech turn over documents related to its unsuccessful effort to sell itself last year. Icahn has previously charged that the sale process, which was carried out under pressure from him, was deliberately undermined by Biogen officials—an accusation the company has strongly denied.

Now comes the lawsuit. Reuters broke the news yesterday. According to that article, Icahn’s complaint, filed in Delaware Chancery Court, repeats his earlier accusations that the confidentiality agreements prospective buyers were required to sign before they could talk to two key Biogen partners, Elan Pharmaceuticals and Genentech, were too restrictive. Both companies hold some change-of-control rights on key Biogen drugs—Elan on the multiple sclerosis and Crohn’s disease drug Tysabri, and Genentech on cancer-fighting Rituxan. Biogen’s restrictions on how suitors could talk to the companies, Reuters said Icahn charged in the complaint, “prevented any potential bidders from learning where Biogen’s third-party partners stood on exercising change-of-control options on key Biogen drugs.”

In the wake of the failed sale, Icahn has nominated candidates for three Biogen board seats that are up for election at the company’s annual meeting to be held at a still-unspecified date this spring. In the lawsuit, according to Reuters, Icahn said the records he wants Biogen to relinquish could help the biotech’s stockholders decide whether a new slate is warranted.

Naomi Aoki, a spokeswoman for Biogen, said that Biogen does not consider Icahn’s request valid. “We believe his request is simply another in a series of manipulative tactics to advance a single-minded agenda of forcing a sale of the company, this time by using the request to propagate his wild conspiracy theories about the sale process,” she said this morning.

Icahn’s suit was prompted by Biogen’s rejection of a request made by the investor on March 28 for all documents related to the design and conduct of the sale process, including minutes from board meetings, Aoki said. At that time, Icahn indicated he wanted to look at the materials and decide what information should be provided to shareholders ahead of the annual meeting and vote on board members.

Biogen refused to hand over the information that Icahn demanded in part because CEO Jim Mullen and the company already shared much of it at a JP Morgan conference in early January, Aoki said. What’s more, she said, Icahn himself was a potential bidder on the company, and has already received much of the information he’s now seeking. “He has the information he says he’s looking for,” Aoki said. To disclose anything beyond what is already disclosed, which would include confidential internal documents, “we believe would compromise and negatively affect our ability to maximize value for shareholders in any future sale process,” she said.

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We at Xconomy are anxiously waiting to see what activist investor Carl Icahn has to say about the B word (Biogen Idec) when he puts bits to screen on his newly announced blog. But in the meantime, yesterday’s quarterly earnings call gave us a little taste of what Biogen CEO Jim Mullen has to say (directly and indirectly) about Mr. I., his recent attempts to force a sale of the company and put his own people on the board, his fiery press release from last week, and the potential effect of all that on Biogen’s staff.

Mullen opened with the news that Biogen (NASDAQ: BIIB) has achieved its 2007 growth targets. The company had $3.2 billion in revenues, an 18 percent increase over 2006, and its non-GAAP earnings grew by 22 percent. The last quarter was particularly strong, he added, “and I think that is despite some of the uncertain events in the fourth quarter.”

Chief among those “uncertain events,” of course, was the attempted sale of the company. Mullen outlined why Biogen embarked on that effort: “We had received expressions of interest, first. Second, after the MedImmune and AstraZeneca transaction, [editor's note: a $15.6 billion Icahn-orchestrated deal] there was a prevailing view in the market that big pharma companies were very interested in acquiring biotech companies like Biogen Idec. The timing of our process was ultimately triggered by Mr. Icahn’s offer and our investors, which include Mr. Icahn and many others, strongly encouraged us to do so. The management and the Board felt we should test the thesis in a comprehensive and objective way to see whether it could result in a transaction that would result in greater returns to shareholders than the plan that we have described.”

Mullen went on to outline and defend the sales process, expanding a bit on what he said on the subject last month at the JPMorgan conference in San Francisco: “Our Board, in consultation with management and advisers, developed and executed a sale process that was professional, objective and thorough and was designed to elicit the highest possible value for the company’s shareholders. We engaged two investment banks that were already intimately familiar with the company’s business. These two investment banks happened to be the same two that executed the MedImmune/AstraZeneca transaction. These bankers proactively contacted a range of potentially interested buyers, close to 20 in all, to solicit interest.”

Interested parties had the chance to do “thorough due diligence,” Mullen went on to say—a counter to Icahn’s complaint that would-be buyers didn’t have sufficient opportunity to negotiate with Biogen partner Elan early enough in the process. “Despite the Monday morning quarterbacking going on about this or that decision around the process, all of which was done in concert with our financial advisers and other advisers, the basic fact remains that no company put a bid on the table.”

Mullen added—and here’s a rare point of agreement between him and Icahn—that in the end he thinks that potential buyers likely balked at the risks associated with Tysabri, a Biogen drug for multiple sclerosis and Crohn’s disease, that has been linked to a rare and potentially fatal brain infection called progressive multifocal leukoencephalopathy (PML). And he refuted the much-reported speculation that Biogen itself is considering making a big acquisition—an idea that particularly irked Icahn. “In late 2006 and early 2007, we concluded that there were no significant acquisition targets that met the test of strategic fit at attractive valuations and we, therefore, returned $3 billion to shareholders in a Dutch auction,” Mullen said. “We do occasionally see smaller acquisition targets that could be executed for cash and accommodated into our current business forecast. At this time, our valuation of the acquisition market for a large company is that no company meets the dual test of strategic fit at attractive valuation.”

In the Q&A portion of the call, Bill Tanner, an analyst at Leerink Swann, asked how disruptive Mullen thought it would be if the company was forced to revisit the idea of a sale in the case of a board shakeup. “It sounds like the last iteration was somewhat painless,” Tanner added.

“Well, somewhat painless is probably an overly optimistic description of the last process,” Mullen responded. A key challenge, he added, “is how do we keep people focused on the ball and how do we recruit in great talent to continue the momentum in the business? Certainly, a lot of distractions around that aren’t helpful for that or business development…I don’t think the right way to run the business is to have, for anybody’s sake, a permanent ‘For Sale’ sign out on the front lawn. So I think we have to get back to the business, focus on prosecuting and going forward and if circumstances and conditions change, we will address those at that time.” Though employee turnover rates were solid in the fourth quarter, Mullen said, “I am actually more interested in what happens in the first six months of this year, because every headhunter used that as an opening to call everybody in the place.”

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Two prominent local academics are among a group of three people to be nominated to Biogen Idec’s board of directors at the company’s upcoming annual meeting, the Cambridge, MA-based biotech giant announced today. Biogen (NASDAQ: BIIB) received notice of the planned nomination came from entities affiliated with billionaire investor Carl Icahn, who as of January 24 owned nearly 10.4 million Biogen shares, or just under 4 percent, up from 8.8 million, or 3 percent, reported at the end of 2007’s third quarter.

Icahn’s move, coming after his unsuccessful push late last year for a sale of Biogen, is no big surprise. About a month ago Bob took a look at Icahn’s history with companies like ImClone and MedImmune and concluded that “given his track record, it seems reasonable to think that the activist investor will become more active on the Biogen front, perhaps beginning with trying to win a board seat and pressing more vigorously for whatever changes he thinks are needed in order to bring the company’s stock price in line with what he believes is the true value of the company.”

Indeed, two of the three people on the slate that Icahn intends to nominate at Biogen’s 2008 annual meeting (which will likely take place in late spring or early summer) are current members of the ImClone board: Alexander Denner, the managing director of two of Icahn’s investment funds, and Richard Mulligan, a professor of genetics at Harvard Medical School and the director of the Harvard Gene Therapy Initiative. Mulligan, a MacArthur “genius” award winner, is joined on the list by fellow Harvard Medical School professor Anne Young. Young is the chief of the neurology service at Massachusetts General Hospital, and the founder and scientific director of the hospital’s Institute for Neurodegenerative Disease.

Impressive credentials, to be sure, but electing all three to the board might necessitate bumping out some other big names, such as Cecil Pickett, Biogen’s president of R&D, or Phillip Sharp, MIT professor, Nobel laureate—and Biogen co-founder. (Mulligan, by the way, did part of his training in Sharp’s lab at MIT’s Center for Cancer Research.) That’s because Icahn is also proposing to amend Biogen’s bylaws to fix the board’s size at 12 members; that’s the size it is now, but under the current bylaws the number of directors is not fixed. The current terms for Sharp, Pickett, and longtime board member Lynn Schenk are all expiring this year, and each would have to be re-elected to remain on the board. (A fourth director, Thomas Keller, will have reached mandatory retirement age by the time of the annual meeting).

All of which sets the stage for some tricky jockeying for position over the next few months. Biogen of course had no comment beyond the statement that its board will “review the notice and consider it in light of the best interests of all shareholders of the Company.” The board’s options include putting up a completely separate slate of board nominees, or including some or all of Icahn’s picks on its own slate. And whether shareholders will be able to vote for each nominee individually or will be required to vote for one slate or the other depends on the specifics for the proxy that Icahn will ultimately file to make the nominations official. When exactly that proxy will be filed remains to be seen. Nothing like a little election drama to go with this year’s election drama, eh?

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In a call-in interview on CNBC yesterday, investor Carl Icahn, who recently pushed unsuccessfully for a sale of Biogen Idec (NASDAQ: BIIB), expressed his belief that the fundamentals are still there for the company to be sold. Icahn spoke about several issues, including the state of the stock market (”it doesn’t look good”), and on the Cambridge, MA-based biotech he was to the point: “with Biogen, I still have belief that, you know, it’s a great company and that somebody will buy them. And we’re still looking at that and still in contact on that.”

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I feel bad even mentioning it, because it’s exactly the sort of mistake I’d make but, for any of you who read the New York Post’s business briefs yesterday, a little clarification: Billionaire Carl Icahn did not just take a “more than 9 percent” stake in Biogen Idec.

The real scoop, revealed in SEC filings made a couple of days ago, is that during the second quarter Icahn’s firm, Icahn Management, bought 2.74 million Biogen shares. Biogen has about 288 million shares outstanding, so that’s more like a 0.95 percent stake (worth about $160 million today).

Even at that size, though, the stock purchase has some folks wondering if Icahn is plotting to make a move on Biogen, a la last year’s ImClone takeover. MarketWatch’s Val Brickates Kennedy has a nice exploration of that question, though she comes to no strong conclusions either way. Kennedy quotes Cowen & Co. analyst Eric Schmidt, who quips that Icahn is “not always an activist investor. Sometimes he can be a passive investor.”

For its part, Biogen is keeping predictably mum. Here’s the official statement, courtesy of the firm’s director of public affairs, Naomi Aoki: “Biogen Idec is aware of the filing by Icahn Management LP. As a matter of policy, we do not comment on the activities of specific investors. The management of Biogen Idec is focused on building value for all of the company’s owners by continuing to execute its strategic plan during this powerful growth cycle.”

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