Icahn Drops His Proxy War Against Amylin after Meeting With CEO
While topic of discussion was not disclosed, Icahn reiterated his desire for Amylin to find a buyer.!--h2>
Carl Icahn ended his proxy war against Amylin Pharmaceuticals just days after it began. The activist shareholder issued a statement saying his affiliates had voluntarily dismissed the lawsuit he filed in Delaware Chancery Court earlier this month seeking a new 10-day period in which to nominate directors for board seats at Amylin’s annual shareholder meeting on May 15.
Icahn filed suit against Amylin after the company rejected a $3.5 billion, $22-per-share takeover offer from Bristol-Myers Squibb. Icahn criticized the Amylin board for failing to disclose the BMS offer while agreeing to a public offering last month of 10% of company shares at $15.62 per share, with options for the company’s top executives that could be exercised at $16.02 per share. BMS hostile bid, followed by Icahn’s proxy war, sparked a 70% increase in Amylin’s share price. It closed yesterday at $26.20.
In a terse statement, Icahn said his decision followed “discussions” with Amylin CEO, Daniel M. Bradbury, that both agreed would not be publicly disclosed. Icahn reiterated that he continues to strongly believe that the company should be sold at this time. “It would be a great acquisition for a number of big pharma companies,” Icahn told Bloomberg. Icahn is Amylin’s third-largest shareholder with 14.4 million shares, an 8.9% stake.
The company responded to Icahn’s about-face with its own statement in which it maintained earlier arguments that: "Amylin's board of directors is fully aware of its fiduciary duties and is committed to always acting in the best interests of stockholders. The board continually considers all options available and is relentlessly focused on creating the greatest value for our stockholders."
n results released this morning, Amylin tripled its first-quarter net loss to $99.04 million compared with $37.324 million in the first three months of 2011. Total revenue was $153.686 million, up less than 1% from $152.714 million in last year’s Q1.
Almost all of Amylin’s revenue comes from $150.586 million in net product sales divided among three diabetes drugs: $120.6 million for Byetta® injection, $23.1 million for Symlin® injection, and $6.9 million for Bydureon. Bydureon recorded no sales in Q1 ’11 because the drug was not yet approved. Year-over-year sales of Symlin inched up from $22.8 million, while Byetta sales during that period dipped from $128 million.
In obtaining exclusive rights late last year to develop and commercialize Byetta in the U.S., Amylin ended its cost-sharing reimbursement for expenses related to the drug. As a result, both SG&A and R&D expenses for the quarter ending March 31 increased over Q1 ’11.
Amylin has not commented on reports that the company has quietly begun reaching out to potential buyers. According to Reuters, which cited unnamed sources, Amylin had hired Credit Suisse and Goldman Sachs as financial advisers and Skadden Arps as legal adviser.
Icahn has argued the BMS overture and public offering constituted “a dramatic change in circumstances” requiring Amylin’s board to give him and other shareholders another opportunity to nominate directors and make proposals at the 2012 annual meeting. Icahn noted that had he known of the BMS overture and board response, he would have proposed a slate of dissident shareholders for Amylin’s board at the annual meeting. Lawyers for Amylin and Icahn had been set to square off in court on the issue on May 10.
-- To read the story from Bloomberg, click here. To read the story from Reuters, click here.