June 19 (Bloomberg) -- Billionaire investor Carl Icahn lost his battle for control of biotechnology company Biogen Idec Inc. as shareholders voted down his candidates for the board.

Biogen, the world's biggest maker of multiple sclerosis drugs, became embroiled in a fight for control with Icahn last December, when the company abandoned a plan to sell itself after getting no offers other than one from Icahn. The billionaire, known for buying into companies he deems undervalued and pushing for change or a sale, proposed his slate for Biogen's board in January, calling the sale process ``flawed.''

A management slate of four candidates was elected to help lead the Cambridge, Massachusetts-based company, according to a preliminary vote count, Biogen said today in a statement. The setback for Icahn comes after successful challenges in the past two years at two other biotechnology companies, leading to a sale at MedImmune Inc. and new management at ImClone Systems Inc.

``Icahn has had a mixed history of success and non-success in biotech, and I'm not sure a lot of people thought he was going to win with Biogen,'' said Caroline Stewart, an analyst with Piper Jaffray & Co. in New York, in a telephone interview today. ``With Biogen, it wasn't clear Icahn had a strong case at all. Management has done well by their shareholders and the stock has done well over the last couple of years.''

Icahn reported acquiring 2.74 million shares, or almost 1 percent, of Biogen, on Aug. 14, 2007. Based on the closing price of shares that day, $59.45, his stake then was worth $162.9 million. As of March 31, 2008, Icahn held 12.4 million shares of Biogen, or more than 4 percent, worth about $1 billion.

Icahn Activism

Icahn's investor activism in the past 25 years has taken on companies in industries ranging from airlines to oil to electronics. Last month, Icahn proposed a slate of directors to force Internet company Yahoo! Inc. to consider a takeover by Microsoft Corp. In March, he pressured Motorola Inc. to spin off its phone business.

Icahn also is supporting an effort by video-store chain Blockbuster Inc. to purchase electronics retailer Circuit City Stores Inc. He said last week that he would buy the company himself if Blockbuster couldn't get financing. Icahn today started a blog to champion shareholder rights.

His bid to push a Biogen sale with a slate of dissident directors showed signs of fading last week when three top proxy advisers, ISS Governance Services, Proxy Governance Inc. and Glass Lewis & Co., said he failed to prove the sale process was mismanaged.

Shares of Biogen rose 67 cents, or 1.2 percent, to $59.17 at 4 p.m. New York time in Nasdaq Stock Market composite trading. The stock has climbed 14 percent in the past 12 months.

Elected Slate

Shareholders elected Stelios Papadopoulos, Cecil Pickett, Lynn Schenk, and Phillip Sharp to fill four open seats on the 12-member board, Biogen said. Rejected were Alex Denner and Richard Mulligan, who are members of the ImClone Systems Inc. board chaired by Icahn, and Massachusetts General Hospital Neurology Chief Anne Young.

``We're major shareholders and we have the support of major shareholders,'' Denner said at the meeting. ``Our argument was that as major shareholders we should have a seat on the board.''

The setback for Icahn comes a year after he raised his stake in MedImmune to help force that biotech company's sale to drugmaker AstraZeneca Plc for $15.2 billion. In October, the investor offered $82 a share for Biogen, according to the company. Based on the 75 percent premium AstraZeneca paid for MedImmune, some analysts said Biogen might get an offer as high as $100 a share.

`Perfect Storm'

``MedImmune was a perfect storm,'' Cowen & Co. analyst Eric Schmidt said. ``Icahn got involved and then a month or two later the company got sold for an enormous premium. That was a once in a lifetime premium, not one you'd expect to see again.''

Icahn was named ImClone's chairman and five of his associates were elected directors in October 2006 after he engineered a takeover of the company's 10-member board and the ouster of Joseph Fischer as chief executive officer. Denner served as head of an executive committee until last August, when John H. Johnson was appointed ImClone's CEO.

To contact the reporters on this story: Lisa Rapaport in New York Lrapaport1@bloomberg.net

Last Updated: June 19, 2008 16:22 EDT