Shareholders in US biotechnology company ImClone Systems have been asked by billionaire investor Carl Icahn to oust six directors of the board, including the chairman and interim chief executive, and bring in one of his own associates.
In a statement, ImClone’s management said the attempt was an attempt to take control of the company, just days after chairman David Kies, under pressure from Icahn to resign, was re-elected to the position by the board.
Icahn already enjoys ‘disproportionate’ representation on the board, according to ImClone, and is now trying to take over the company without paying a control premium to shareholders.
Kies said it would be “a significant mistake to dismiss half of the directors elected by shareholders less than ten days ago." He urged shareholders to take no action until they receive further information from the company regarding Icahn's proposals.
Icahn owns around 13.85% in ImClone and managed to get himself and three associated elected onto the company’s board earlier in September. He also has the support of another major investor, CAM North America, which holds 11% of the biotech’s stock.
The disruption comes at a terrible time for ImClone, which is facing competition to its Erbitux (cetuximab) drug for colorectal cancer in the USA now that Amgen’s rival product Vectibix (panitumumab) has won a green light from the Food and Drug Administration.
Although it has been approved for a narrower indication than Erbitux, which is sold in the USA by Bristol-Myers Squibb, Vectibix has been launched it at a 20% discount and Amgen is already carrying out studies aimed at expanding its use. ImClone’s ability to compete with Amgen can only be hampered by the power struggle.
Meanwhile, ImClone’s credibility also suffered a knock recently after it tried - and failed - to find a buyer for the business.
Separately, ImClone’s chief financial officer Michael Howerton has resigned and will be replaced by chief accounting officer Ana Stancic, although the company said this was unrelated to the battles within the boardroom.