23 octobre, 2006 17:49

ImClone Names Icahn Candidate Peter Liebert to Board (Update3)

By Lisa Rapaport and Angela Zimm

Oct. 20 (Bloomberg) -- Billionaire investor Carl Icahn moved closer to gaining control of ImClone Systems Inc. with the appointment of an additional ally to the drug company's board.

The new director, New York surgeon Peter Liebert, fills one of the vacancies created with the departure earlier this month of William Crouse and chairman David Kies, ImClone said today in a statement. The second opening won't be filled, reducing the number of seats to 11. Icahn and his associates hold five.

The action gives Icahn, 70, his third victory in a month as he tries to overhaul management of New York-based ImClone, developer of the cancer drug Erbitux. The company's second- biggest shareholder, Icahn won election to the board on Sept. 20. He had pushed for the resignation of Kies and Crouse.

Icahn said earlier this week in a letter to shareholders that Imclone's management made several ``missteps.'' The company failed to push ``an aggressive development program'' for Erbitux and let it lose its competitive lead.

Icahn had asked stockholders to elect Liebert, a pediatric surgeon at Columbia University, while ousting four other directors. In an interview Oct. 18, Icahn said he had more than two-thirds of the support needed to replace the interim chief executive officer, Joseph Fischer, and remove him and three others from the board. Icahn holds about 14 percent of ImClone shares. Only Bristol-Myers Squibb Co. owns more ImClone stock.

Shares

Shares of ImClone fell 4 cents to $29.87 at 9:41 a.m. New York time in Nasdaq Stock Market composite trading. The stock has declined 11 percent in the past year.

In his letter two days ago, Icahn criticized the board for hiring a ``string of CEOs who failed to act,'' and he wanted to replace Fischer with someone with biotechnology experience who will more aggressively promote Erbitux.

``I know enough to know that this drug and pipeline are very valuable,'' Icahn said in the interview this week. ``Erbitux is a great drug.''

The voting for Icahn's proposal, called a consent solicitation, officially began Oct. 18 with the letter to shareholders seeking support.

ImClone said today that three affiliates of Icahn returned documents in Icahn's consent solicitation, meaning the consent period will end no later than Dec. 18 under Delaware law.

ImClone employees have contacted Icahn and Alex Denner, one of the investor's three allies on the board, to voice their support, Icahn said this week.

``A number of employees are voting with us, a number of highly placed employees,'' Icahn said in the interview. ``This board has absolutely messed the company up.''

Monitoring the Dispute

Institutional Shareholder Services, which advises on corporate governance votes, said in a Securities and Exchange Commission filing Oct. 18 that it is monitoring the ImClone board dispute. ISS had interviewed Icahn and discussed his activism in an Oct. 6 research note, according to the filing.

In addition to Fischer, Icahn is asking shareholders to oust directors Vincent DeVita Jr., a Yale University medical professor, John Fazio, a former senior general partner of PriceWaterhouseCoopers, and William Miller, chairman of Vion Pharmaceuticals Inc.

ImClone's management has turned over several times since the insider-trading scandal involving founder Samuel Waksal four years ago. Waksal was given a seven-year prison sentence and fined $3 million after pleading guilty to charges he traded on news that Erbitux wasn't getting U.S. regulatory approval. Waksal, 59, is scheduled for release from prison in Otisville, New York, on Nov. 14, 2009, according to the Federal Bureau of Prisons Web site.

Erbitux Approval

The Food and Drug Administration approved Erbitux in February 2004 to treat patients with advanced colorectal cancer.

Waksal resigned as chief executive in 2002 and was succeeded by his brother, Harlan Waksal, who stepped down a year later. His replacement, Chief Financial Officer Daniel Lynch, quit after 22 months. Frost, ImClone's chief scientific officer, was named to the post in November 2005 and was succeeded by Fischer.

Icahn says he's been an investor in ImClone for more than 15 years and is a friend of Waksal.

Phone calls to Icahn's office and to ImClone spokesman David Pitts weren't immediately returned.

To contact the reporters on this story: Lisa Rapaport in New York at lrapaport1@bloomberg.net ; Angela Zimm in Boston azimm@bloomberg.net