The season of proxy battles at Biogen Idec (NASDAQ:[[ticker:BIIB]]) is upon us. Billionaire investor Carl Icahn and his affiliates have sent word to Cambridge, MA-based Biogen that they plan to nominate three additional people for election to the board of directors at the company’s annual meeting this year, Biogen says.
Two of Icahn’s nominees are alumni of cancer drug developer Imclone Systems, of which Icahn and his affiliates took a majority of shares in 2006. Thomas Deuel, a former board member at Imclone, is a professor who focuses on cancer research at the prestigious Scripps Research Institute in La Jolla, CA. Richard Young is an MIT biologist whose lab at the White Institute of Biomedical Research studies the role of small RNA in gene transcription. And Eric Rowinsky is the former chief medical officer at Imclone.
This slate has been introduced as Biogen looks to replace its CEO, James Mullen, who announced early this month that he would be retiring in June. Icahn, who controls nearly 5.6 percent of Biogen shares, could gain far more significant influence on the company’s board at a pivotal time if his nominees take three of the four seats open for election this year. Biogen’s board has formed a four-member committee to lead a search for a new CEO, and one of those four search committee members is company director Alex Denner, who is one of the two nominees from Icahn’s slate to be elected to the board last year. (Luke analyzed Icahn’s potential impact on filling board vacancies at Biogen last month.)
Another proposal that Ichan is making, for the third year straight, is to amend Biogen’s bylaws to fix the number of board seats at 12. Putting a cap on the number of company directors could be viewed as a longer-term measure to gain control of the board. It’s conceivable that, after the next election, Icahn’s people would occupy nearly half of the company’s board seats, giving him considerable influence over decisions, putting him in striking distance of gaining control of majority of the board in subsequent years.
Icahn’s been a major proponent of overhauling research priorities and trimming expenses at Biogen to lift the price of the company’s stock, which he says has underperformed compared with other similar stocks in recent years.
