Activist investor Carl Icahn has filed a lawsuit against diabetes drug maker Amylin Pharmaceuticals, Inc. (AMLN) to put pressure on it to pursue a deal to sell the company. Icahn owns about 9 percent of Amylin's shares.
The move comes after Amylin rejected a $3.5 billion unsolicited takeover offer from Bristol-Myers Squibb Co. (BMY) in late March. Icahn has sharply criticized the decision, and is now looking for an opportunity to nominate directors and make proposals at the upcoming 2012 annual meeting of shareholders.
Following the rejection of the acquisition offer, Amylin shareholders, led by Icahn, demanded the Amylin board to provide them with a new 10-day period within which to provide notice of nominations and proposals to Amylin, a request that was ignored by the board.
The demand followed what Icahn called "a dramatic change in circumstances". Icahn alleged that the board has failed to disclose the bid rejection and its subsequent issuance of 10 percent of the company at $15.62 per share on March 8.
Further, he added that the board did not disclose the company's issuance of options to executive officers at $16.02 per share on March 6, including 300,000 shares to President, CEO and Board member Daniel Bradbury.
Now, Icahn has filed a lawsuit to seek an extension of the nomination deadline so that the shareholders can nominate a new slate of directors committed to pursuing a sale of the company.
Icahn said in his lawsuit that "Amylin is a company at a crossroads and that stockholders should be entitled to nominate a new slate of directors committed to pursuing a sale of the company. If successful, we intend to nominate a slate of directors that we hope will be able to focus the Board on being receptive to bids for the company rather than on diluting its owners."
Amylin is currently focused on finding a marketing partner for its diabetes products outside the U.S. and is speaking with several drug companies. It had terminated a decade-long alliance with Eli Lilly & Co. (LLY) in November.
Amylin received FDA approval for Bydureon, a once-weekly formulation of the earlier diabetes drug Byetta, in late January. Bydureon is a once-weekly version of the injectable diabetes medication Byetta.
Byetta was the first glucagon-like peptide-1 receptor agonist to be approved by the FDA for the treatment of type 2 diabetes. Byetta has been available in the U.S. since 2005 and is used in nearly 80 countries worldwide.
AMLN closed Monday's regular trading session at $23.72, down $0.40 or 1.66% on a volume of 2.99 million shares.
by RTT Staff Writer
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