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Icahn Names 4 Nominees to Forest Labs Board

From Associated Press (June 19, 2012)

NEW YORK -- Activist investor Carl Icahn on Tuesday nominated four directors to the board of drug maker Forest Laboratories Inc.

Icahn nominated Eric Ende, Andrew Fromkin, Pierre Legault, and Daniel Ninivaggi for spots on the Forest Labs’ 10-member board of directors. Icahn is the second-largest shareholder in Forest and controls around 9.9 percent of the company’s shares.

The New York company said it will evaluate Icahn’s nominees. Shareholders will vote on the nominees at Forest Labs’ upcoming annual meeting.

Icahn also requested a variety of corporate records from Forest Labs, saying he wants to see documents related to the profit forecast the company issued in April and reduced in June; licensing agreements on some of its products; the decision to make Howard Solomon its chairman and CEO; the advancement and compensation of David Solomon, who is the company’s head of development and strategic planning and the son of Howard Solomon; and Forest’s accelerated stock repurchase program.

Forest Labs said it will determine what documents, if any, Icahn is entitled to under Delaware law. The company is incorporated in Delaware.

Forest Labs cut its annual profit outlook on June 11, saying it expects lower sales of its antidepressant Lexapro as well as lower prices for an authorized generic version of the drug that is made by Mylan Inc. Lexapro lost patent protection earlier this year and several generic versions are now on the market.

Icahn said the company did not disclose the possibility that Lexapro sales would be weaker than expected and might cause it to cut its guidance. He also said the company’s licensing agreements have "unfavorable change of control provisions" that make Forest Labs a less appealing candidate for a sale to another company.

Fromkin is the former president and CEO of Clinical Data Inc. Forest Labs acquired Clinical Data in 2011, and in the deal it gained Clinical Data’s recently approved antidepressant Viibryd. Legault is the CEO of business development firm Stone Management and the former chief financial officer of OSI Pharmaceuticals. Ninivaggi has been the president and CEO of Icahn Enterprises LP and Icahn Enterprises GP since 2010. He is also a director of the company.

Ende is a former Merrill Lynch biotechnology analyst. Icahn nominated Ende and three other candidates for places on Forest Labs’ board in 2011, but shareholders rejected those candidates in favor of the directors backed by the company.

Shares of Forest Labs lost 4 cents to $34.67 in Tuesday’s regular trading session and gained back 2 cents in aftermarket trading.


Posted: June 2012