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Friday, 15 Dec 2017

UPDATED Forest makes nice with shareholders ahead of Icahn showdown

Forest Laboratories ($FRX) has held out an olive branch to shareholders involved in a lawsuit against the drugmaker, agreeing to corporate governance policies that address compensation and conflicts of interest as part of a proposed settlement, The Wall Street Journal reported. The complaints in the lawsuit bespeak some of activist investor Carl Icahn's beefs with Forest CEO Howard Solomon, and the settlement comes just days ahead of the Aug. 15 shareholder meeting where Icahn aims to win four seats on the board of directors.

Forest has pushed for the election of the company's 10 board candidates and the denial of Icahn's proposed directors. Icahn has had his way in a number of such elections involving biotech boards, but his efforts last year to gain seats at Forest fell short. And the scuttlebutt on the street, as Reuters reported earlier this week, indicate that Icahn's argument that his involvement in Genzyme, Biogen Idec ($BIIB) and Imclone Systems bought big stock gains lacks at least a couple key elements: Former biotech aces Alex Denner and Richard Mulligan.

Both Denner and Mulligan, for instance, have become influential members of Biogen's board of directors and participated during the 2010 leadership reshuffle--featuring the exit of ex-CEO Jim Mullen and arrival of chief executive George Scangos-- in 2010 and an R&D reorganization that have been met with rave reviews from investors. Due in large part to the blockbuster hopes for the MS pill BG-12, Biogen's stock has skyrocketed nearly 150% over the past two years. However, Denner no longer works for Icahn and set out last year to form his own hedge fund, and Mulligan has followed, as Reuters noted.

Mulligan's and Denner's "contacts, their understanding of the science and the nuances of what's happening in the world of biotech have been terrific," Robert Pangia, a director of Biogen, told Reuters.

Yet Icahn isn't challenging for seats at Forest with a slate of lightweights. His nominees, according to the news wire, include Icahn Enterprises President Daniel Ninivaggi, former Merrill Lynch analyst Eric Ende, Andrew Fromkin, the former CEO of Clinical Data, and biopharma vet Pierre Legault. (Interestingly, Fromkin was chief executive at Clinical Data when Forest bought the company and its antidepressant Viibryd last year for $1.2 billion.) We'll see whether this crew of candidates wins over Forest shareholders next week.

RELATED: Icahn took his latest shot in his proxy battle with Forest, saying that the company has poison pill provisions in its licensing deals that threaten the ability of a potential buyer to acquire the drugmaker, Reuters reported.

- see the WSJ article
- and the Reuters report

Related Articles:
Could Icahn deliver at Forest without his go-to veterans?
Glass Lewis stands up for Forest's board slate
Proxy firm backs half of Icahn's Forest nominees
Forest independents immediately tell Carl Icahn no

UPDATED: Adds "poinson pill" news from Reuters.

Read more: UPDATED Forest makes nice with shareholders ahead of Icahn showdown

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