Forest Labs holders pick 1 of 4 Icahn nominees

AP News
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Posted: Aug 15, 2012 12:42 PM
Forest Labs holders pick 1 of 4 Icahn nominees

Forest Laboratories Inc. said Wednesday shareholders have elected one of four candidates nominated by billionaire investor Carl Icahn to the drugmaker's board of directors in a proxy contest.

Shareholders chose Icahn nominee Pierre Legault and nine candidates backed by the New York drugmaker, according to preliminary results.

Icahn is the second-largest Forest shareholder, with a stake totaling more than 26 million shares, according to FactSet.

He also nominated four directors at last year's meeting as part of a push to gain greater control over the company, but shareholders rejected them. This year, Institutional Shareholder Services had recommended Legault and another Icahn nominee, Daniel Ninivaggi, before Wednesday's vote. Forest had urged shareholders to reject all the investor's nominees.

Forest said Wednesday the election of only one of Icahn's candidates reflects shareholder confidence in its strategy and corporate governance. It also said it looked forward to working with Legault "in a constructive manner to build value for all Forest shareholders over the long term."

Icahn said in a separate statement he was pleased with the support Legault received, and he hopes "that the shareholder message sent will be the first step in bringing good corporate governance to this great company — something that has been lacking for decades."

Icahn and the company have sniped at each other all summer, trading sharply worded letters to shareholders about Wednesday's meeting. Last week, Icahn accused Forest of using a licensing agreement to block takeovers and then stalling on the release of some information.

Forest has denied that and accused Icahn of twisting facts.

The investor also criticized the company earlier this week because it has received warning letters about promotional practices by its sales representatives nearly two years after it reached a Justice Department settlement about similar practices.

Icahn also has knocked the company for failing to prepare for the loss of patent exclusivity on its antidepressant Lexapro. Generic versions of Lexapro went on sale in early 2012 and Forest cut its income and revenue forecasts in June, saying competition was stiffer than it had expected.

In July, the New York company said its fiscal first-quarter earnings sank 79 percent after the patent loss. Forest revenue from Lexapro plunged 81 percent to $110 million.

Forest has launched several new drugs to help offset the decline in Lexapro sales and the loss of patent protection for the Alzheimer's disease drug Namenda, which is scheduled to happen in 2015.

Last month, the Food and Drug Administration approved Tudorza Pressair, a long-term treatment to improve breathing in patients with chronic obstructive pulmonary disease. Forest also said in a recent letter that it expects another FDA approval in September.

"Forest has been strategic, methodical and relentless in developing a next generation of products that will build sustainable value for shareholders," the company has said in correspondence with shareholders.

Shares of Forest Labs climbed 8 cents to $34.06 in afternoon trading, while the Standard & Poor's 500 index also climbed slightly.