He said – He said

He said – He said

As Diabetic Investor stated yesterday Carl Icahn came out with his own letter to Amylin (NASDAQ:AMLN) with gun blazing or should we say with two double barreled shotguns. In the interest of fairness and since we posted the Amylin letter in its entirety, here is the Icahn letter in its entirety:

“April 21, 2009

Joseph Cook, Jr., Chairman of the Board

James Wilson, Lead Independent Director

Amylin Pharmaceuticals, Inc

9360 Towne Centre Drive

San Diego, CA  92121


Dear Joe & Jim:

Your letter of April 20, 2009, completely mischaracterized what was said during the conversations that took place between us during the past weekend.

After Amylin issued its public invitation to a meeting with us and Eastbourne, I called you this past weekend and, during the first of our conversations, I stated I was glad you had indicated (in your media statement of Wednesday, April 15) your willingness to have a three way discussion between Eastbourne, the Company and ourselves. I was therefore absolutely amazed when you denied you had indicated that you were open to a meeting. I then asked you to wait while I got a copy of the statement you issued. I read you your own language which stated, "We have engaged in discussions with both Mr. Icahn and Eastbourne Capital Management, L.L.C. ("Eastbourne"), and welcome the opportunity to meet with them again, either separately or together." I then asked if you intended to keep your word and have the meeting. There was no meaningful reply. I then mentioned that this indecisiveness and reneging on promises could be a major problem if it is how the company has been run during your tenure.

Let us now discuss some of the many misstatements you have made concerning our weekend of discussions. To begin with, I absolutely did not say that Amylin should be sold "promptly." I did point to our record with ImClone, where in 2 years we vastly improved the company and our relationship with our partner Bristol-Myers. Lilly paid a huge premium over market for the ImClone. I mentioned that one of the things we wished to accomplish at Amylin would be to attempt to renegotiate the partnership agreements with Lilly. I told you the Amylin agreement with Lilly was reprehensible to me in that it contained one of the strongest standstills I have ever seen preventing Lilly from offering to acquire Amylin. The conversation did get a bit heated and I did mention the standstill was simply another device along with the poison pills and poison puts to entrench yourselves. I pointed out that Big Pharma companies were paying huge premiums for bio-tech and, indeed, Lilly’s CEO, John Lechleiter, had just stated publicly that he was looking for more acquisitions.

I mentioned I thought that you were afraid that Lilly might offer to pay a huge premium for Amylin if they were released from their standstill. I pointed out that you, knowing the problems at Amylin, many of which are of your own making, saw fit to sell your stock at a very significant premium over today’s market price.(1) Why shouldn’t other stockholders have the opportunity to decide for themselves whether or not to sell, for example, if a bid were made above $30 per share? In an angry exchange, I asked why are you preventing Lilly from making a bid? How are stockholders helped by having that provision in the standstill? It is a complete misstatement on your part to any way suggest that I wish to sell Amylin to Lilly at today’s prices. Quite to the contrary! No one has ever accused me of selling cheaply. As you are probably aware, I currently own companies that I have held for upwards of 20 years. It is true, however, that during the last 2 years, I have sold companies such as the Stratosphere Casino which I held for 7 years. I invested $300 million into the company and received $1.3 billion. I also sold ImClone for $70 per share (which I had accumulated at an average cost of about $33 per share). I negotiated that $70 per share price after urging that ImClone turn down an unsolicited bid in the high $30’s and even the Bristol $60 and $62 bids. I say this to you not to boast but to make the point that I do not sell cheaply and would certainly not recommend selling Amylin unless we were offered at least over $30 per share, at which time I might recommend selling it. As I pointed out in our "rather heated" conversation, it seemed to me that your sale of stock in and above the high $30’s was among the very few intelligent things you did in your tenure at Amylin.

Concerning cost cutting, I stated you appear to overspend in many areas and that possibly that is related more to your ego then to enhancing stockholder value. I told you if we were on the board we would bring in experts that would ascertain how much waste there was and would also take a very hard look at any contracts, if they existed, with other firms you were involved with.

For a number of years I have had conversations with CEOs and Chairmen, often over a crucial weekend, in order to end or avoid a "debilitating" proxy fight, as you have characterized what is going on at Amylin. Often these conversations have become "heated." However, never until today has either side found it necessary to slant and misstate these conversations and then release these misstatements on Monday morning.

I will end by asking once again, do you intend to keep your word and set up the three way meeting between the company, Eastbourne and Icahn as you promised you would or was your statement of Friday just another empty promise?


Carl Icahn

(1)    The records show you sold stock between $18.64 and $50.17 per share”

While there are several items of note in this letter one in particular struck a chord with Diabetic Investor and might just irritate the people at Lilly (NYSE:LLY); “Lilly paid a huge premium over market for the ImClone.” Although Diabetic Investor is not as experienced as Mr. Icahn at buying and selling companies we’re not familiar with the strategy of publicly antagonizing a potential buyer of Amylin. Perhaps this is why Mr. Icahn noted he has had several “heated” discussions with management teams. Imagine that.

Please excuse Diabetic Investor if we also find another Mr. Icahn statement a bite ironic when he stated; “However, never until today has either side found it necessary to slant and misstate these conversations and then release these misstatements on Monday morning.” For an experienced investor I doubt this is the first time Mr. Icahn has encountered such tactics and we would venture to guess he himself have used similar tactics.

Given the back and forth letter war Diabetic Investor suspects this isn’t the last we’ve heard from either side. We also expect this situation will eventually resolve itself and that Amylin will be acquired. The real issue here is what occurs between now and then. Let’s assume for a moment that Icahn and Eastbourne win the proxy fight and gain control of the board. What happens then, what changes would be made and where would the cost cuts be made. It’s pretty easy to look backwards and say if we had been running the company we would have done things differently. Beyond stating that he would renegotiate Amylin’s agreement with Lilly, we have heard few specifics from Mr. Icahn.

If Mr. Icahn truly has a plan other than selling the company, it would be great to see what that plan looks like. This would give shareholders the opportunity to review his proposal and compare it to what current management has put forth and has done. This really should be a battle of who can better manage Amylin as the move towards the LAR submission and launch. However, other than a few minor specifics, all of which are related to eventually selling the company, shareholders aren’t getting a clear picture of what Mr. Icahn would do if he’s in charge.

As we noted previously if Mr. Icahn’s goal is to sell the company then he should come out and state it clearly so shareholders have a clear choice when they vote. For a person who claims to be a shareholder advocate and activist it would be refreshing if he did more than talk the talk and actually walked the walked.