whether the benefits of the drug outweigh the risk it poses to multiple sclerosis patients. About 45 percent agreed in July 2006, when the drug was re-introduced to the U.S. market after the FDA said the benefits outweighed the risk of patients getting PML, a rare and potentially fatal brain infection. That confidence level increased among physicians to 65 percent by June 2008, but dropped again to 45 percent after a pair of PML cases were diagnosed and publicized in July 2008. About 61 percent of physicians reported the benefits outweigh the risks, according to Biogen survey data from February.
On the stock price, the company pointed out that Biogen Idec shares have outperformed the Amex Biotechnology Index composed of largecap biotechs, and the S&P 500 Index since the 2003 merger with Idec Pharmaceuticals.
On the dealmaking front, Biogen said it is exploring opportunities to get a piece of assets in late stages of development or marketed products. It wants products that can increase revenue growth in the short term of 2010 to 2013, to be sold with a small, specialty sales force; and ones that can be bought cheaply.
On the corporate governance front, Biogen pointed out that the board has an “owner’s perspective.” It pointed to examples of financial discipline, when it laid off 17 percent of its workforce in 2005, was able to boost its S&P credit rating, and built up the company’s cash balance to $2.5 billion at the end of March. It said several directors chosen over the past three years reflect “diversified expertise and shareholder input.” The new directors include Biogen’s head of R&D, Cecil Pickett; Marijn Dekkers, the CEO of Thermo Fisher Scientific; Nancy Leaming, a former CEO of Tufts Health Plan; Stelios Papadopoulos, a longtime biotech investment banker; and Brian Posner, a hedge fund manager.
On one slide, the company directly challenged the Icahn nominees, arguing they would “weaken” the board’s financial and operational capabilities. Biogen argued that the dissidents, including Denner, Harvard Medical School professor Richard Mulligan, Thomas Deuel of Scripps Research Institute, and David Sidransky of Johns Hopkins “have served or will serve together” on boards of three different companies—ImClone Systems, Enzon, and Amylin Pharmaceuticals.
In its conclusion, the company said there was essentially no need to rock the boat. “This board is best positioned to continue to deliver value to all shareholders,” the company said.
