Icahn sues Forest for info on Solomon's woes

Carl Icahn's (photo) proxy-fight tactics for Forest Laboratories are growing clearer. High River, an Icahn investment firm, has sued Forest for information on CEO Howard Solomon's battle with the U.S. government. Shareholders have a right to know why Solomon is in hot water with the feds, the suit claims, and the company hasn't been very forthcoming.

The U.S. Department of Health and Human Services has moved to bar Solomon from doing business with government health programs--such as Medicare--which would effectively bar him from his job at Forest. Unless, that is, the company was prepared to forego a huge chunk of its business. Solomon and Forest have vowed to contest the exclusion.

Enter Icahn, whose investment firms now own 6.9 percent of the company. High River's suit claims that Forest's "public disclosures about this affair have been opaque, inaccurate, and seemingly designed to reveal the least possible information," Bloomberg reports. The company disputes that, repeating its previous contention that "the sole basis of the HHS-OIG action against Mr. Solomon...is that he is 'associated with' Forest." The company agreed to a $313 million settlement with the Justice Department last year for distributing an unapproved drug.

But Forest's decision to stand by Solomon is risky, High River's suit points out. If Solomon is indeed excluded from federal programs, the company will lose a lot of business. So, shareholders deserve more information about that risk. High River specifically wants a copy of the letter regulators sent to Forest in April about Solomon's potential exclusion, and it's asking for any documents that might indicate the company knew of the government's move beforehand.

Whatever documents come to light, Icahn intends to use them to help support his nominees for Forest's board. The company has said that Icahn's group will nominate four candidates for the nine-member board to run against the company's own slate.

- read the Bloomberg piece

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