The Dance Begins

The Dance Begins

Today we learned the Carl Icahn has increased his stake in Amylin (NASDAQ:AMLN) and that he intends to nominate a slate of five directors to Amylin’s board. Responding to this Amylin issued a press release which stated;

Amylin’s Corporate Governance Committee is engaged in a process to recommend a slate for election at the Company’s annual meeting. It is reviewing potential nominees suggested by shareholders as part of that process, including two individuals previously discussed with representatives of the Icahn funds. Once the process has been completed, Amylin’s Board of Directors will formally recommend a slate of nominees that it believes will act in the best interest of all shareholders. “

Considering that the Amylin board currently consists of 12 members Mr. Icahn would not control the board even if he gets all five of his nominees elected. It also appears that Amylin is setting the stage for some type of compromise as their release indicates they are willing to accept at least two of these nominees.

Talk about a strange serious of events. First we have Amylin announcing results this past Tuesday which as Diabetic Investor mentioned was just a little unsettling as they announced they would not be providing revenue guidance for 2009. Next we had Lilly (NYSE:LLY) announcing results this morning and as has become a regular event they appeared less than enthusiastic in their support of Amylin. Finally we have this news about Carl Icahn increasing his stake in Amylin and seeking to nominate five members to Amylin’s board.

When it comes to what’s going on at Amylin it reminds Diabetic Investor of how the weather is here in Chicago, if you don’t like it just wait five minutes and you’ll have something completely different. Given the issues facing Amylin it seems just a bite strange that Mr. Icahn would try and force a sale of the company. Granted the environment may be ripe for a takeover but with so many issues facing Amylin just who would acquire the company and more importantly would they get full value given so many unresolved issues. And let’s not forget that a takeover is made more complex if the acquiring company is not Lilly.

Perhaps Mr. Icahn believes as Diabetic Investor does that the label change for Byetta will be minor. That the coming competition from Novo Nordisk (NYSE:NVO) won’t have the adverse impact on Byetta sales that everyone else seems to believe. Finally he believes that Byetta LAR is truly a paradigm shifting drug and stands to become a mega-blockbuster, or as Diabetic Investor stated earlier this week LAR is the crown jewel in Amylin’s pipeline.

Seeing as Mr. Icahn does not consult with Diabetic Investor before he makes his decisions regarding Amylin, we have absolutely no idea what he’s thinking. What we do know is this guy likes to make money and rarely loses. Believe Diabetic Investor when we say that as important as Amylin could be to the future of diabetes, money is the motivating factor behind every decision Mr. Icahn makes.

Diabetic Investor has long maintained that Amylin would eventually be acquired more than likely by Lilly.  We also believe the issues facing the company aren’t as serious as everyone else seems to think they are. However, this seems like a strange time to begin this dance given the uncertainty facing the company. But as we’re so fond of saying here at Diabetic Investor when it comes to the diabetes market stranger things have happened.