Carl Icahn has turned to his newest target.
Forest Laboratories said Icahn entity High River Limited Partnership plans to nominate four individuals to its nine-member Board of Directors at the company’s 2011 Annual Meeting.
They are Dr. Alexander J. Denner, Dr. Richard Mulligan, Professor Lucian A. Bebchuk and Dr. Eric J. Ende.
High River and its affiliated entities own options and shares representing 6.5 percent of the drug maker’s outstanding shares.
“While we have not yet had a chance to meet with Mr. Icahn to discuss his ideas for the Company, we welcome constructive input from all of our shareholders,” said Howard Solomon, Chairman, Chief Executive Officer and President of Forest, in a press release.
Denner is currently chairman of Enzon Pharmaceuticals, and a managing director of a number of Icahn entities. Mulligan is an Enzon director and the Mallinckrodt Professor of Genetics at Harvard Medical School and Director of the Harvard Gene Therapy Initiative.
Several years ago, Enzon spun off its biotech operations in response to Icahn’s prodding. In 2009, the company named Denner and Mulligan—hand-picked by Icahn—to its Board.
Harvard Professor Lucian A. Bebchuk is a long-time advocate for shareholder rights and critic of high executive pay, staggered Boards and Golden Parachutes who has mounted activist campaigns of his own. He was one of Icahn’s director nominees when the former corporate raider and hedge fund manager mounted his proxy fight with Yahoo several years ago.
Dr. Eric J. Ende is an independent director of Genzyme. He was appointed to the board last year as part of a settlement between the company and Icahn, who had launched a proxy fight and sought four Board seats. Icahn no longer has a position in the biotech company’s stock. Ende is president of Ende Consulting Group, which focuses on biotechnology. From 2002 through 2008, he was the senior biotechnology analyst at Merrill Lynch.
On one level, Forest labs would seem like an unlikely target for Icahn. Its stock has surged more than 47 percent in the past year compared with 16.9 percent for the S&P 500. The company also stressed it has returned over $1 billion in capital through share repurchases since 2010 and invested about $2.8 billion on product focused acquisitions over the past four years.
However, Icahn has been aggressively investing in biotech companies, stressing the cash-rich companies in the industry — a sort of cousin to pharmaceuticals — are ideal candidates for mergers and acquisitions.
In fact, at the end of the March quarter, Forest Labs had $3.8 billion in cash. This works out to nearly 35 percent of the company’s market capitalization.
Earlier this year Standard & Poor’s lowered its rating on Forest Labs to Hold from Buy, primarly because in 2012 Lexapro, the antidepressant drug deemed to be the company’s important product, comes off patent.
