Genzyme shareholders urged to vote for Icahn nominees, but Campath could be snag
This article was originally published in Scrip
Carl Icahn has again criticised Genzyme in the ongoing battle for control over the beleaguered biotech, saying that the firm's "inability to fully manufacture and supply certain of its products leads to the conclusion that the manufacturing system at Genzyme is broken".
In an SEC filing dated 27 April, the activist investor urged Genzyme's shareholders to vote for himself and three cohorts, Dr Stephen Burakoff, Dr Alexander Denner and Dr Richard Mulligan, to be appointed to the company's board of directors at the its next AGM, which is to be held on 16 June.
Genzyme has faced manufacturing setbacks since the end of last year and most recently was hit by enforcement action taken by the US FDA to ensure that the company's manufacturing plant in Allston, Massachusetts, met good manufacturing practice regulations (scripnews.com, 25 March 2010).
Dr Burakoff is Professor of medicine, haematology and medical oncology at the Mount Sinai School of Medicine and director of the Tisch Cancer Institute at the Mount Sinai Medical Center.
Dr Denner is managing director of entities affiliated with Mr Icahn, including the private investment funds Icahn Partners, Icahn Master, Icahn Master II and Icahn Master III.
Dr Mulligan is Mallinckrodt Professor of Genetics at Harvard Medical School, and director of the Harvard Gene Therapy Initiative. Dr Burakoff was a professor of medicine at Harvard Medical School during Dr Mulligan's tenure at the university.
The four nominees, defined in the filing as The Icahn Parties, believe their knowledge of sciences, medicine, finance and business will significantly improve the science and business expertise of the board of directors.
While the nominees, if elected, would still be a minority of the directors, they expects to be able to engage other board members in discussion about the issues affecting Genzyme.
Campath competition
However, even if Mr Icahn is successful at the AGM, the appointments could still face barriers as Dr Denner and Dr Mulligan currently serve on the board of another biotech company, Biogen Idec. Section eight of the Clayton Antitrust Act prohibits any person from being a director of two or more competing corporations.
The Icahn Parties believe that the clause would not be applicable to the nominees as Biogen Idec and Genzyme would not be deemed competitors because sales of drugs by the two competitors that might be considered competing were inconsequential.
However, Biogen Idec's multiple sclerosis drugs Avonex (interferon beta-1a) and Tysabri (natalizumab) would be in direct competition with Genzyme's Campath (alemtuzumab) should the latter product be commercialised in the indication. Genzyme revealed earlier this month that Campath, already marketed as a treatment for B-cell chronic lymphocytic leukaemia, halted the development of disease-related disabilities and prevented relapses in 71% of patients in a phase II study, compared with 35% with Merck KGaA's competing product Rebif (interferon beta-1a).
Genzyme acquired Campath from Bayer for up to $2.8 billion in March last year. The product is in two Phase III studies in treatment-naïve and treatment-experienced MS patients; Genzyme expects approval in the former by 2012 (scripnews.com, 1 April 2009).