Second Amylin shareholder wants changes; analysts predict higher bid for CV Therapeutics

By Cristal Cody

New York, Feb. 2 - Change is the mantra of more than one shareholder of Amylin Pharmaceuticals Inc.

On Monday, a second stockholder emerged with a slate of nominations to the company's board of directors. A leadership change, though, isn't expected to position the company for a sale since there aren't many buyers, an analyst told Prospect News.

Consolidation speculation continues to grow in the pharmaceutical industry. On Monday, Bristol-Myers Squibb Co.'s stock gained 58 cents, or 2.71%, to close at $21.99 on sale talk.

Market observers point to a potential buyout by Sanofi-Aventis SA, which is reportedly target hunting.

In other pharmaceutical deals, shares of CV Therapeutics Inc. fell 25 cents, or 1.60%, to close at $15.40 on Monday after Astellas Pharma Inc. said its $16.00-a-share offer is the company's only offer. Analysts, though, said in interviews that CV Therapeutics should fetch an offer of at least $19.00 a share.

On Wall Street, the Dow Jones Industrial Average fell below 8,000 on Monday and closed down 64.11 points, or 0.80%, at 7,936.75.

The Standard & Poor's 500 index also lost 0.44 of a point, or 0.05%, to finish at 825.44, while the Nasdaq Composite index gained 18.01 points, or 1.22%, to close at 1,494.43.

Eyes on Amylin board

Eastbourne Capital Management LLC, which owns 12.5% of Amylin's outstanding stock, announced its plans on Monday to nominate five directors to Amylin's 12-member board.

On Thursday, billionaire investor Carl Icahn's Icahn Capital LP said in a regulatory filing that the group also intended to nominate five new directors. Icahn holds 8.3% of Amylin shares.

Eastbourne said the dual efforts will not compete with each other.

"Taking into account the independent actions by two of your largest shareholders, it should be exceedingly clear to the board that change is required, that it is in the best interest of all shareholders and that it can be readily achieved," Richard Barry, founder of Eastbourne, said in a letter sent to Amylin's board.

Eastbourne said in a statement that "while it has not lost faith in the potential of Amylin's pipeline and products, it has lost confidence in the ability of Amylin's current board and management team to execute an operational strategy that is in the best interest of shareholders."

Amylin said in a statement that the company's corporate governance committee also is considering directors for election.

While a change could position the company for a sale, there wouldn't be any takers, an analyst said Monday.

Eli Lilly & Co., which makes Byetta in a partnership with Amylin, is the obvious buyer, but Eli Lilly is still digesting its $6.5 billion acquisition of ImClone Systems Inc.

"I don't think there's anybody out there to buy them right now," said Jon Lecroy, an analyst with Natixis Bleichroeder. "They share all their products with Eli Lilly and Eli Lilly is not in a position to buy anyone right now. In the long run, [the change in directors] may not actually mean much."

Amylin shares rose 24 cents, or 2.08%, to close Monday at $11.80.

Final offer for CV Therapeutics

Market observers said that Japanese drug maker Astellas will have to raise its bid to turn heads at California-based CV Therapeutics. The offer is a 41% premium to CV Therapeutics' closing share price on Jan. 26, the day before the bid was announced.

CV Therapeutics has said that the board will reviews its options in light of the offer, with analysts predicting the board would consider a higher deal price. However, the company also extended the shareholder rights plan to Feb 1, 2010 from Feb 1.

"Astellas is looking to buy them because they're looking to build out their cardio franchise," said Derek Taller, an analyst with the Benchmark Co., who has a buy rating on CV Therapeutics shares. "I think $19.00 is a number the board would say is a fair value."

Mentioned in this article:

Amylin Pharmaceuticals Inc. Nasdaq: AMLN

Astellas Pharma Inc. Pink Sheets: ALPMY

Bristol-Myers Squibb Co. NYSE: BMY

CV Therapeutics Inc. Nasdaq: CVTX

Eli Lilly & Co. NYSE: LLY

Sanofi-Aventis SA NYSE: SNY

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