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Carl Icahn
Carl Icahn won federal approval Friday to take a bigger stake in Biogen Idec, sending the shares to a two-year-high yesterday. (Daniel Acker/Bloomberg News/File 2006)

Biogen Idec appears to be in Icahn's sights

Billionaire known for shaking things up propels stock

Carl Icahn, the billionaire investor who took over TWA in the 1980s and has battled executives at Motorola, Time Warner, and other iconic corporations, now appears to have Biogen Idec Inc. in his crosshairs.

Icahn, who recently bought a 1 percent stake in the Cambridge biotech company, won federal approval Friday to take a bigger stake, sending shares to a two-year-high yesterday on talk Biogen Idec could become a takeover target.

"It is going to attract a lot of acquisition speculation," said Gene Mack, a financial analyst with HSBC Securities Inc. in New York. If Biogen Idec does go on the auction block, the most likely buyer would be a large drug company looking to fill its product pipeline, he said.

Still, only Icahn knows exactly what Icahn is up to. And the 71-year-old financier isn't talking publicly.

He didn't return calls seeking comment. And Biogen Idec declined to say whether Icahn has contacted the company.

"We don't comment specifically on the actions of any particular investor," said Naomi Aoki, a Biogen Idec spokeswoman.

Icahn, who might be best known as a corporate raider who piloted TWA in 1985 and tried to grab Nabisco in 1996, often buys large stakes in companies and pushes them to make changes or find a buyer. "He is never a passive investor," said Mark Stevens, an Icahn biographer and chief executive of MSCO Inc., a marketing and management firm based in Rye Brook, N.Y. "He is always a three-ring circus."

Icahn, a former medical student, has also shown increasing interest in rattling the cages of biotechs and drug makers. He gradually accumulated shares in ImClone Systems Inc., a cancer drug developer in New York linked to the Martha Stewart insider trading scandal. Last year, Icahn finally took control of the company after a raucous shareholder battle and vowed to install his own management team.

In February, Icahn revealed he had taken a 1 percent stake in MedImmune Inc., one of the country's largest biotech firms. Shortly afterward, he threatened to start a shareholder fight to force the sale of the Maryland company, complaining about its "lackluster" performance. In April, MedImmune agreed to sell itself to drug maker AstraZeneca PLC for $15.6 billion.

Icahn has also bought large stakes in other biotechs, such as Adventrx Pharmaceuticals in San Diego and Telik Inc. in Silicon Valley.

Not all of his moves have paid off. In late 2004, Icahn disclosed he became the biggest shareholder in Blockbuster Inc. and quickly pushed for changes at the movie rental chain to compete with online competition like Netflix Inc. Since then, Blockbuster's stock has fallen from about $10 a share to less than $5.

Now Icahn apparently sees possibilities in Biogen Idec.

Mack, the HSBC analyst, believes the company is undervalued. He recently estimated the stock might be worth $78, based on its earnings and the values of other biotech companies. Biogen Idec shares closed yesterday at $62.93, up 4 cents. On Friday, shares rose 5 percent after the Federal Trade Commission gave Icahn early approval to take a larger stake in the company. An FTC spokesman declined to say how many shares Icahn was allowed to purchase. FTC approval is typically needed before investing more than $59.6 million in a public company.

Though Biogen Idec's shares have steadily risen recently, the company's stock has never fully recovered from a stumble two years ago. In early 2005, Biogen Idec yanked the multiple sclerosis drug Tysabri off the market just three months after introducing it, when it found patients taking it in trials had contracted a rare brain disease. Eventually, three patients were found to have the disease, and two of them died.

Since then, the news has been more positive. The Food and Drug Administration allowed Tysabri back on the market last year. And Biogen has continued to cash in on two other drugs: Avonex, another multiple sclerosis drug, and Rituxan, a cancer treatment.

In July, Biogen Idec predicted revenue would rise this year 16 to 18 percent with continued profits. The company also unveiled a $3 billion stock buyback in May, partly to help boost the share price.

With a market value of $18 billion, Biogen Idec is one of the country's most valuable biotech companies -- second in Massachusetts only to Genzyme Corp. of Cambridge. And the company's management has not been previously under fire.

Still, Stevens, author of the book "King Icahn," said Icahn is a master chess player and strategist.

"While the average CEO can think two or three moves ahead, Carl can think 10 ahead," Stevens said.

Elisabeth Tuite of the Globe staff contributed to this report. Todd Wallack can be reached at twallack@globe.com.

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