Billionaire investor Carl Icahn sent a letter to Amylin Pharmaceuticals Inc's chairman Joseph Cook on Wednesday demanding his resignation as part of his power play to place a slate of nominees on the board of directors.

Given that Amylin is failing, he asked Cook to step down in place of his nominees.

In a letter to Cook, Icahn claimed that the company lost enormous stockholder value during Cook's time and Cook should step down in the face of demands from rebel shareholders.

''Like an 'imperial' chairman you have taken steps to entrench yourself that we believe to be unconscionable,'' Icahn said in the letter.
 Icahn, who owns about 9.43 per cent of Amylin stock, is trying to replace five of the 12 board members with his own choices. (See: Amylin shares up as Icahn consolidates stake).

Meanwhile, West Coast investment firm Eastbourne Capital, which owns a 12.5 per cent stake in Amylin, has said it would nominate a slate of five directors.

Amylin has named two new director nominees, including Paul N Clark, former chairman and chief executive of Icos Corp, and Paulo F Costa, former chairman and CEO of Novartis US.

The move has purportedly set up a three-way proxy fight between two dissident investors and the pharma company, with the prospect of shareholders at the annual meeting of May 27 set to receive three sets of proxy cards for electing the 12-member board.

Howard Greene, the company's co-founder and former CEO, resigned last week from the board amid a proxy battle with Icahn and Eastbourne Capital Management.

Amylin, which makes the diabetes drug Byetta in a 50-50 partnership with Eli Lilly & Co, said that it had engaged in discussions with both Icahn and Eastbourne.
Icahn said, after his election to the board of ImClone in October 2006, its per share market value increased by 135 per cent through its sale in late 2008.

Conversely, during the same period Amylin's per share market value declined by 85 per cent.

Amylin's shares have fallen 66 per cent over the past one year amid concern Byetta, the company's most important product, may increase the risk of pancreatitis - an inflammation of the pancreas that can be deadly - raising concern over the approval of the company's next-generation diabetes treatment exenatide LAR, which is injected once-weekly.

Byetta, which was launched in 2005, is a member of the GLP-1 class of drugs designed to stimulate the release of insulin in diabetics when glucose levels become too high.

The company plans to ask for FDA approval for the new molecule in the second quarter of 2009.

In 2006, Icahn battled for biotechnology company ImClone Systems, which he ultimately seized and sold to Lilly for $6.5 billion.

It is clear Icahn hopes to bring some of the same tactics - and team - to bear in his fight with Amylin, say analysts.

Among Icahn's criticisms of Amylin's strategy is its relationship with Lilly. Amylin and Lilly share expenses to market Byetta.

''Amylin never should have undertaken to spend enormous amounts of money to maintain a large commercial operation in primary care diabetes sales - an absurd commercial effort for a small biotech company,'' he said.

Icahn also condemned a ''poison put'' provision in the company's 2007 credit agreement that would require the company to accelerate repayment of more than $900 million if there is a change of control of the board.

Amylin, which has a market value of $1.4 billion, posted a loss of $315.4 million in 2008 on revenue of $840 million.

Amylin's shares rose 51 cents or 5.1 percent to close at $10.51 on the Nasdaq on Wednesday.