left the building without a word to them. “Richard and I tried to engage with some of the directors, but they were escorted out behind guards before we could talk to them,” he says. When I asked Biogen spokeswoman Neiman about the incident she said it was the first she had heard of it, and that she could not comment further.
At the same time, both Denner and Mulligan say they are hoping for an amicable and productive working relationship. “There are reasonable people on the board who would work to the best interests of all shareholders,” Denner says.
I asked about how influential they might be. Mulligan, a professor of genetics at Harvard Medical School and director of the Harvard Gene Therapy Initiative, pointed to the presentation by research and development head and board member Cecil Pickett as illustrating areas where he thought they might make a difference. In making their case to shareholders before yesterday’s meeting, Icahn’s forces have said, among other things, that they would prioritize research areas and improve the focus of R&D. And while he was not specific about Pickett’s remarks yesterday, Mulligan says: “We have the highest respect for the researchers at Biogen and feel that they would welcome an effort to more critically define the strategy of R&D.”
Mulligan and Denner also pointed to the changes they made as Icahn representatives on the board of New York-based ImClone Systems, where they have been credited with helping engineer a successful turnaround that led to the company’s being sold last year for some $6.5 billion. Says Mulligan, “Many of the problems at Biogen are similar to the problems that we encountered and solved at ImClone.” The men showed me a slide they had prepared for Biogen shareholders that compared what they had done at ImClone to what they want to do at Biogen in five areas: strengthening partner relations, improving cost structure, advancing the product pipeline, improving strategic direction and focus (which they think is diffused over too many therapeutic areas at Biogen), and settling litigation issues.
“Our objective is not to put the company up for sale,” says Denner. “It’s to improve shareholder value, improve the pipeline, reinvigorate the culture and research, implement smarter spending, and improve the relationships between Biogen, Genentech-Roche, and Elan—and potentially to renegotiate a deal with Elan that’s better for the shareholders of both companies.”
Icahn’s tensions with Biogen date back to the summer of 2007, when he started accumulating a stake in Biogen and declared it was a takeover candidate for a larger drugmaker. Biogen invited bids, but by December shut down the sale effort, saying it had received no “definitive offers.” That announcement sparked a Biogen stock sell-off that cost the company $5 billion in market value in one day. Icahn complained afterward that the sale process was sabotaged by onerous restrictions Biogen placed on talks with its partners, a charge the company denied.
Both Denner and Mulligan ran for election to the Biogen board last year, and both were defeated that time, along with a third candidate Icahn put forward. They acknowledged last night that they did a better job this time around of making a compelling case for their agenda to shareholders (as Luke Timmerman, our national biotech editor, has also noted). Denner says they were focused too much on the failed sale attempt by Biogen last year, and not as much on fundamental areas of change, as they were this year.
“It will be very hard for them not to go with us if we’re addressing those issues,” says Mulligan.
