It's not every day that billionaire investor Carl Celian Icahn faces defeat in the boardroom, so yesterday's rejection of his nominees to Cambridge-based biotechnology company Biogen Idec must rankle. At the company's annual general meeting on Thursday, shareholders defeated a slate of directors proposed by Icahn and instead elected a quartet backed by the management.
Shareholders elected to the board include Cecil Pickett, Biogen's president of research and development, Lynn Schenk, an attorney, and Phillip Sharp, a Nobel prize-winner who helped found Biogen 30 years ago. Also elected was Stelios Papadopoulos, a retired vice chairman of Cowen & Co, to replace existing director Thomas Keller, who is reaching retirement age.
Icahn sought to place three members on the company's board in a bid to push Cambridge-based Biogen to try again to sell itself. He had nominated Richard Mulligan, professor of genetics at Harvard Medical School, Dr. Anne Young, head of the neurology service at Massachusetts General Hospital, and Alexander Denner, managing director of the Icahn investment vehicle, Icahn Partners.
However, all three nominations were defeated. Shareholders also defeated a proposal by Icahn to permanently limit the board to 12 members.
Icahn has reported owning more than 4 per cent of the company and pushed for it to be sold to a larger drug maker. Yesterday's results should provide Biogen Idec more stability to focus on drug development and reduce the pressure to find a partner, feel analysts.
Icahn, known as an aggressive corporate raider over the last two decades, has repeatedly scrapped with Biogen Idec management since the company's failed effort to sell itself last year. Biogen Idec said it did not receive any offers, but Icahn has suggested it may have manipulated the process to discourage suitors by not allowing potential buyers to talk to its partners, Elan Corp Plc of Ireland and biotechnology company Genentech Inc.
After the results for which he congratulated the management, Denner said his side realised it wouldn't likely prevail after proxy review firms such as RiskMetrics Group had recommended against its slate of candidates this month.
Denner said Icahn's group believed it still deserves at least a seat on the board given its stake in the company. He said the idea won backing from some other major shareholders, which he declined to identify. Biogen Idec's research strategy and employee morale could both be improved, Denner said, but he was not specific.
Several individual investors at yesterday's meeting said they voted to support the slate of directors put up by Biogen Idec rather than Icahn, saying he seemed more interested in a quick payout, while management is more focused on long-term results.
The company also outline ambitious plans for the future. It noted it had four products in late-stage development and a number of others in early-stage clinical trials, which, a company spokesperson put it, ''are the kind of things that keep our scientists excited about the company.''
CEO Jim Mullen also pointed to its multiple sclerosis treatment, Tysabri, which was once pulled off the market because of safety concerns, but is now on track to being used by 100,000 patients by the end of 2010. "We think we've been consistent and strong in creating value," he said.
Biogen chairman Bruce Ross added, 'We look forward to turning our undivided attention to delivering strong performance and growing our business for stockholders.''