Highlighted in this post are Amylin Pharmaceuticals (
AMLN) and Eli Lilly & Co. (
LLY).
This morning, Eastbourne Capital Management LLC announced its intentions to nominate a minority slate of five individuals for elections to the 12-member Board of Directors at Amylin Pharmaceuticals (
AMLN).
Eastbourne also stated in a letter to the current Amylin Board indicating its enthusiasm for the pipeline and products, but that it has lost confidence in the ability of the Board and management team to execute an operational strategy that is in the best interest of shareholders. As of the last filing, Eastbourne owns approximately 12.5% of Amylin's outstanding common stock.
The news follows last week's announcement that two other large shareholders, Carl Icahn and Black Bear Fund, will also nominate directors to the company's Board at the upcoming annual shareholder meeting. Carl Icahn, who currently owns approximately 8.3% of the outstanding shares -- a similar minority stake to Eastbourne -- plans to nominate 5 members to the 12-member Board.
Amylin, which has seen sales of its leading diabetes product, Byetta, struggle of late due to safety concerns over a potential increased risk of pancreatitis, has seen its stock decline by 70% over the past year. Since the product was launched in 2005, there have been six reported deaths due to pancreatitis in patients taking Byetta.
At this point, we are unsure of Eastbourne's strategy. Carl Icahn has stated that he would like to see Amylin sold to a larger pharmaceutical company. The name that makes the most sense would be Eli Lilly & Co. (
LLY), Amylin's 50-50 joint venture partner for Byetta and a long-acting release (LAR) version of Byetta that is expected to go under FDA review later this year.
However, given Eli Lilly's recent $6.5 billion acquisition of ImClone late last year, and concerns over Byetta and the regulatory pathway for the next-generation LAR formulation, it may be some time before Eli Lilly feels comfortable enough to make a bid.
Amylin trades with a market capitalization of $1.6 billion. At this time our recommendation is for investors to continue to avoid the name.
