ImClone Holders Elect Icahn, Two Associates
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ImClone Systems Inc. shareholders elected activist investor Carl Icahn and two of his nominees to the biotechnology company’s board of directors Wednesday, as the billionaire asked the chairman to resign.
Following the appointment of another Icahn-designated director earlier this year, Mr. Icahn now has control of one-third of ImClone’s board, which expanded to 12 directors from nine with the vote at the company’s annual shareholders meeting. He has built up nearly a 14% stake in the company, which developed the cancer drug Erbitux.
Icahn immediately displayed his new power by sending a letter to Chairman David Kies again asking him to give up his position as chairman. In the letter, which was included in a filing with the Securities and Exchange Commission, Mr. Icahn said that given the “sorry record”of the company under Mr. Kies’ watch, it was time for Mr. Kies to step aside and allow someone else to be elected.
ImClone shares, which have fallen nearly 15% year-to-date, traded recently at $29.03, down 13 cents, on volume of 3.1 million shares, above its average daily volume of 2.1 million shares.The stock is well off its peak of above $80 in 2004.
Shareholders re-elected Mr. Kies as a director along with the 11 other directors and nominees up for election. But whether he continues as chairman will be determined at a closed-door board meeting set to begin later Wednesday morning. Mr. Icahn, who was expected to dial into that meeting, couldn’t immediately be reached Wednesday.
Mr. Kies declined to comment on Mr. Icahn’s view of the chairman situation after the shareholders meeting. It was not immediately clear at the time if Mr. Kies knew about the letter, which was disclosed in a regulatory filing around the time the meeting was finishing. An Mr. Icahn associate already on the board, Alexander Denner, who was at the meeting, also declined to comment, as did the company spokesman.
Mr. Icahn disclosed in the letter that Mr. Kies indicated, during a discussion between the two men in August, that he would not continue to serve as ImClone’s chairman. But, according to Mr. Icahn, Mr. Kies has also indicated that he wouldn’t be willing to step down Wednesday. Mr. Icahn said Mr. Kies has admitted to him that “the board has done a bad job.”
“ImClone has been without effective leadership for almost three years,” Mr. Icahn wrote in his letter. Mr. Icahn also criticized ImClone’s “apparent passivity” in pushing to start appropriate trials of colon cancer drugs.