Carl Icahn's not through with biotech yet

By Derek Lowe

So Carl Icahn is back to make another attempt at the board of directors of Biogen, one of the largest of the biotech companies. (For reasons that a securities lawyer would best be able to figure out, Icahn is also proposing to change the company's jurisdiction of incorporation to North Dakota, and no, I'm not just making that part up). This comes after his adventure at Imclone, where he successfully caused the company to cease to exist, selling it out to Eli Lilly at a good profit.

The people who work at Biogen are worried, with good reason. Icahn is seen as a fast-buck artist, someone who comes in to pump up the stock and unload the company, entire or in pieces, to whomever will pay. None of this has much to do with the business of researching new drugs. That's always been a source of tension in the industry (marketers and researchers don't seem to have genomes that overlap very much). But a Carl Icahn represents the furthest that the it's-a-business attitude can go: not only is it just a business, it's a short-term one, and you're not making what you should out of what you've got, and why don't you just sell it all out now? "Here, move over, let me show you what I mean. . ."

What this will do is spread more worry and uncertainty around in a business that already had plenty, thanks very much. And if Biogen's shareholders and board don't tell Icahn to buzz off, it could well end, eventually, with the company dismembered and its scientific expertise scattered or lost outright. But profitably, of course. Always profitably.

Derek Lowe blogs from inside the drug labs at In the Pipeline.

This article available online at:

http://www.theatlantic.com/business/archive/2009/02/carl-icahns-not-through-with-biotech-yet/406/