Amylin blasts Icahn sale plan

Drug maker cites expected profit

By Lisa Rapaport
Bloomberg News / April 21, 2009
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Amylin Pharmaceuticals Inc. said a sale of the company to Eli Lilly & Co., proposed by billionaire investor Carl Icahn during a proxy fight, would "dramatically undervalue" future profits from a new diabetes treatment.

Icahn's proposal to cut costs by 30 percent, in addition to cuts made by Amylin, would "undermine" efforts to introduce the new medicine, a once weekly version of Byetta, San Diego- based Amylin said yesterday in a regulatory filing.

Amylin, which sells Byetta with Lilly, is fighting a challenge for control by Icahn and Eastbourne Capital Management LLC.

Together they own more than 20 percent of Amylin's shares. Icahn and Eastbourne have each nominated separate slates of five directors.

Shares of the company have dropped 68 percent in the past 12 months.

"Our plan has already delivered substantial progress toward our stated goal of achieving positive operating cash flow by the end of 2010," said James N. Wilson, an independent Amylin director, in a letter to Icahn filed yesterday with the Securities and Exchange Commission.

Lilly hasn't had acquisition talks with Amylin, Lilly's chief financial officer Derica Rice said in an interview with Bloomberg Television. "We're very happy with our current relationship with Amylin," he said.

Amylin rose 2 cents, or less than a percent, to $10.20 in Nasdaq Stock Market composite trading.

Amylin cut 25 percent of its San Diego workforce in restructuring announced in November, Wilson said in the letter. The company reduced operating expenses by 16 percent in this year's first quarter, he said.

Amylin shareholders are set to vote on the composition of the board at a May 27 meeting in San Diego. Amylin proposed its own slate of directors including Paul N. Clark, former chairman of Icos Corp., and Paulo F. Costa, a former Novartis AG executive.