Carl Icahn, the billionaire investor seeking board representation at Forest Laboratories Inc., will focus the drugmaker on medicines prescribed by primary-care physicians and look to reduce spending if his bid is successful, said Alex Denner, one of Icahn’s director nominees.
Icahn’s group is seeking four seats on New York-based Forest’s 10-member board, saying the current directors have been in place too long and lack independence. Icahn also contends that new drugs spread across therapeutic areas may not generate enough revenue to make up for the loss of patent protection on two of Forest’s top-selling drugs, the antidepressant Lexapro and Alzheimer’s medicine Namenda.
“If elected, we would work with the board to focus the company on opportunities that have positive return for shareholders,” Denner, senior managing director at Icahn Enterprises LP, said yesterday in a telephone interview. “We would apply a return-on-investment rigor to spending and some of the smaller marketed products that are not within the primary-care focus.”
Shareholders are set to vote Aug. 18 at the company’s annual meeting. Icahn has the second-largest stake in Forest, with 9.2 percent of the stock as of Aug. 8, according to a regulatory filing. Denner said Icahn’s group has “wide support” from shareholders.
“We’re hearing each day about new shareholders supporting us,” he said.
Wellington Management Co. is Forest’s largest investor with 12.7 percent of the company as of March 31, according to data compiled by Bloomberg.
Forest rose 16 cents, or less than 1 percent, to $34.25 at 4:02 p.m. in New York Stock Exchange composite trading. The shares have gained 7.1 percent this year.
Forest has nominated a 10-member slate with three new directors, saying it has a diversified set of experimental medicines and leadership that’s “focused on continuing to build sustainable momentum and value for all shareholders.”
The company’s marketing strategy has always been focused on primary care, Lesley Bogdanow, an outside spokeswoman for Forest, wrote in an e-mail today.
“In addition, we believe our shareholders and analysts understand that cutting spending while launching five new products is a recipe for failure,” she said. “We are confident that our shareholders, unlike Denner, understand our business and our strategy and will come to the right decision.”
Lexapro and Namenda generated 82 percent of Forest’s $4.4 billion in revenue for the year ended March 31, according to data compiled by Bloomberg. The drugmaker also sells Bystolic for hypertension and Savella for the chronic pain disorder fibromyalgia. The company’s antibiotic for drug-resistant skin infections, Teflaro, was approved by U.S. regulators in October.