Icahn loses campaign to change Biogen Idec board

Carl Icahn lost his campaign to elect a slate of dissident nominees to Biogen Idec Inc.'s board on Thursday, an effort the activist investor hoped would eventually trigger a sale of the 30-year biotechnology firm to a major pharmaceutical company.

Despite shareholders' election of four company-backed nominees rather than Icahn's three candidates, one of the billionaire's nominees said afterward that Biogen Idec's management had agreed to meet with him to discuss ways of improving the company's prospects, including strengthening drug research and employee morale.

"We have heard from major shareholders and employees who think that things can be done better at Biogen," said Alexander Denner, managing director of Icahn's investment firm, Icahn Partners.

At the start of Biogen Idec's annual shareholder meeting in Cambridge, Denner conceded that Icahn had failed to win enough support to elect his three nominees _ a result that had been widely expected after four firms that advise shareholders on proxy ballots recently backed the company's nominees.

Without releasing vote totals, the Cambridge-based company said its nominees _ Stelios Papadopoulos, Cecil Pickett, Lynn Schenk, and Phillip Sharp _ had won the four open seats on the company's 12-member board. A vote tally is expected in about two weeks.

Denner declined to say how much support Icahn had lined up for dissident nominees Anne Young, a Harvard Medical School neurology professor; Richard Mulligan, a Harvard genetics professor; and Denner. He did say that one of Biogen's 10 largest shareholders _ he wouldn't say which one _ offered support.

Icahn was not among the about 100 people attending the meeting. One of them, Donald Sohn, a longtime holder of thousands of Biogen shares, said Icahn didn't help his cause by staying away.

"It would have been a courtesy if he had at least showed up," said Sohn.

Another shareholder, John Kalisz, said the scientific expertise that Icahn's Harvard-affiliated nominees could bring to Biogen could help it. But Kalisz disliked Icahn's strategy of investing in companies he thinks are undervalued, then using the holdings as leverage to try to bring about management changes or buyouts that bring hefty premiums to shareholders.

"If he's just wishing to make a quick dollar and chopping things up just for his pockets, boy, that doesn't make sense," said Kalisz, of New Bedford.

Icahn owns 4 percent of Biogen Idec's shares, and pushed the 4,000-employee company last fall to seek a buyer. The company ended the search two months later after no definitive bids surfaced, prompting Icahn to accuse the company of rigging the process to fail _ an accusation the company denies. Proxy advisory firms have said the accusation appears to have little basis in fact.

The lack of bids surprised some analysts who had expected the company could fetch an offer far above its current market value of $17 billion from one of several large pharmaceutical companies that have few new potential blockbuster treatments in development.

In addition to the treatments for multiple sclerosis and rheumatoid arthritis that Biogen Idec already has on the market, the company has a dozen experimental medications either in late-stage or mid-stage clinical trials.

Denner said Icahn does not necessarily want to see Biogen Idec sold unless it can find a buyer willing to offer "a big premium." Denner didn't specify how much of a premium would justify a sale.

Company executives have said they intend to remain independent, but are open to considering all options, including a sale, to maximize shareholder value at a firm that saw total revenue grow 18 percent last year to almost $3.2 billion.

"Our board has a track record of delivering stockholder value and is committed to pursuing all avenues to continue to do so in the future," Chairman Bruce Ross said.

Biogen's stock rose sharply last fall and briefly rose above $80 per share as the company searched for a buyer. But the shares dropped nearly 24 percent when Biogen said it had failed to find a buyer. On Thursday, the shares rose 59 cents, or 1 percent, to $59.09.