Icahn comes back at Forest with 4 board nominees

Carl Icahn may have stopped harassing Amylin Pharmaceuticals, but Forest Laboratories isn't so lucky. The activist investor has nominated four directors for the drugmaker's board, in yet another attempt to push CEO Howard Solomon and company to do things his way--or get out of the way.

It's Icahn's second battle with Forest; last year, he failed to persuade shareholders that the company ($FRX) needed a wholesale change in strategy. Now, he's advancing the same argument--that Forest's management is entrenched and moribund, and so is its board. (CEO Howard Solomon has been at the helm since 1977, Reuters notes.) Icahn, who owns 9.9% of the company, also demanded access to Forest's books.

It's true that Forest is in a less-than-ideal state at the moment. It just lost patent protection on Lexapro, the antidepressant that has delivered more than half its sales. Generic erosion has come hard and fast, prompting Forest to cut its earnings forecast. Meanwhile, the company has launched a couple of new products--including another antidepressant, Viibryd--and bought in full rights to the blood pressure drug Bystolic, but their sales so far can't fill the gap. It has several promising candidates, including cariprazine, an antipsychotic it's developing with Gedeon Richter.

That's too little, too slow for Icahn. The company's management "engaged in conduct to enrich and entrench management to the detriment of stockholders," he said in a statement, citing the recent forecast cut as "an example of the mismanagement and lack of oversight that has plagued the company." His slate includes Eric Ende, a former pharma analyst and perennial Icahn nominee, and Daniel Ninivaggi, an Icahn partner. Also on the list is Andrew Fromkin, former CEO of Clinical Data, which Forest bought last year. And then there's Pierre Legault, CEO of Stone Management and former OSI Pharmaceuticals CFO, Bloomberg reports.

For its part, Forest says Icahn's charges are "generally unsupported and inaccurate," The company defended its board, saying it's already "strong and independent," including three new independent directors elected last year over Icahn's nominees. As for the request for records, Forest says it will evaluate Delaware law to determine which documents--if any--Icahn is entitled to inspect.

- see the statement from Forest
- read the Reuters story
- get more from Bloomberg