Biogen Idec got a boost today in its proxy battle with billionaire investor Carl Icahn. Two big firms that advise institutional investors and mutual funds on how to vote in corporate elections—RiskMetrics Group/ISS Governance Services and Glass, Lewis & Co.—recommended that shareholders vote for the Cambridge, MA-based biotech company’s slate and reject Icahn’s three nominees.
RiskMetrics reasoned that “The dissident has not met its burden of proving that board change is warranted at Biogen. Absent a showing that the incumbent board has failed in some fashion, we find it difficult to support the removal of directors,” according to a quote from its report cited today by Biogen (NASDAQ:BIIB).
Glass, Lewis & Co.’s comment backed up the sentiment: “We believe that shareholders should support management’s nominees. In our opinion, the current board and executives have created substantial value for shareholders and we believe that the company has solid growth opportunities as a stand-alone entity.”
The wrangling over Biogen started back in August when Icahn increased his stake in the company. He raised the ante in October, when he suggested a larger drugmaker might want to buy it for as much as $25 billion to fill up its pipeline of experimental drugs. Two months later, Icahn’s investment tanked when Biogen abandoned a sale, saying it didn’t receive any binding offers, and the stock lost $5 billion of its market value. Icahn has since argued that the sale process was doomed from the start, and that the board had “very little” input.
The shareholder votes will be tallied at the company’s annual meeting on June 19.