Biogen vote: from Pyongyang to Palm Beach

June 4, 2009

“This is not North Korea,” Alexander Denner, managing director of Icahn Partners, called out after Bruce Ross, Biogen‘s chairman called a surprise midday recess. Icahn representatives said they believed the move signaled their slate had won sufficient votes to be elected.

By the end of the day, Biogen was telling shareholders it still did not know if Icahn — who has called for the biotechnology company to be split in two — had won two seats on the board. In fact, results may not be known for weeks. “Later in June we will receive the final report of the inspector of elections,” Ross told the shareholders who stayed for the whole session. Last year, Icahn had sought to sell the company, and his slate of directors was voted down by a ratio of 75 to 25.

While unlikely to make it to the supreme court, one can imagine the dramatic dispute leading vote counters to check for dimpled chads, and while the count is unlikely to make it to the supreme court, Minnesotans have at least as good a chance of having a new Senator at this point as Biogen shareholders do of knowing the make-up of their board by the end of the month.

Icahn owns a 5.6 percent stake in the company. He wants the board to consider breaking it into two parts, one focused on neurology and the other targeting cancer treatments. And it’s not like Biogen doesn’t have equally pressing fundamental issues, according to Baird analyst Chris Raymond:

“While BIIB’s ongoing proxy battle makes for good theater, we would continue to point out that no matter who sits on the board, this company faces numerous commercial challenges, not the least of which being what we perceive as significant threats to Avonex – still BIIB’s marquis franchise, accounting for ~50% of revenue for the foreseeable future. We remain cautious on the name.”

Raymond has a neutral rating on the stock, with a price target of $49, about 7 percent below its closing level after the meeting adjourned.

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