Biogen Idec shot back at Carl Icahn today in a regulatory filing. The company disputed the ways in which the billionaire challenged virtually every aspect of its business, and disagreed with Icahn’s fundamental conclusion that it is suffering from “failed leadership.”
Cambridge, MA-based Biogen (NASDAQ: [[ticker:BIIB]]) says its R&D pipeline is strong, physicians are regaining confidence in the benefits of its most effective multiple sclerosis drug after some safety concerns, and that shareholders would “weaken” the board’s financial and operational capabilities if they vote for Icahn’s slate of candidates.
The proxy battle is heating up again this spring at Biogen, as Icahn launched a withering attack on the company as shareholders consider who to elect to the company’s board at the annual meeting on June 3. Icahn, who failed to win any board seats at last year’s meeting, is pushing again this time with a bid to elect four new directors to the 13-member board. Change in the boardroom is needed, Icahn argued, because the company’s stock price has trailed its peers for years, the predicted cost-savings from the 2003 merger with Idec Pharmaceuticals never materialized, and the company has failed to generate any new products from its R&D department since 2004.
“Fundamentally, we want to reinvigorate and refocus the R&D pipeline,” said Alex Denner, a portfolio manager for Icahn. “That’s one area they need critical help.” He added the Icahn slate wants to find ways to decrease spending on overhead, and that it wants to “study the idea” of whether the company would be better off splitting into separate companies that focus on cancer drugs and neurology treatments.
Biogen didn’t directly tackle that question of whether to split up the company, although it loaded plenty of details in its defense, through a 40-page PowerPoint presentation to shareholders that was disclosed with the Securities and Exchange Commission. Much of the defense was focused on the company’s pipeline of experimental drugs.
On the R&D question, Biogen argues that it has seen “robust growth across all phases of the pipeline.” The company had 73 programs in various stages from discovery through development, which represents 23 percent compound annual growth over the past five years. R&D spending has doubled in those years, while the number of programs has almost tripled, the company says. The company said it has 60 ongoing clinical trials, covering 15 different diseases. It quoted several bullish analysts after its March R&D day presentation. “The early stage pipeline is innovative,” said analyst Jason Kantor of RBC Capital Markets.
On its MS drug natalizumab (Tysabri), the company said “physicians are regaining confidence.” The company disclosed survey data from physicians who were asked
