Amylin Sends Letter To Shareholders
May 11 2009 - 9:00AM
PR Newswire (US)
Urges Shareholders to Support the Board's Strategy and Vote the
BLUE Proxy Card Today to Elect Amylin's Highly-Qualified Nominees
SAN DIEGO, May 11 /PRNewswire-FirstCall/ -- Amylin Pharmaceuticals,
Inc. (NASDAQ:AMLN) today announced that it is sending the following
letter to shareholders in connection with the Company's Annual
Meeting of Stockholders on May 27, 2009. Amylin urges all
shareholders to vote FOR Amylin's Directors on the BLUE proxy card
today and reject the nominees of both Carl Icahn and Eastbourne
Capital Management, L.L.C. The text of the letter from James N.
Wilson, Lead Independent Director, is below: Dear Fellow Amylin
Shareholder: Amylin's Annual Meeting is nearly two weeks away -- on
May 27th, you will face a clear choice regarding the future of the
Company and the value of your investment. We urge you to recognize
the importance of your vote: make the right choice by voting FOR
your Board's highly-qualified nominees on the BLUE proxy card
TODAY. Amylin now has the opportunity to transform the treatment of
diabetes with exenatide once weekly. Your Company has been
carefully executing a comprehensive plan to ensure that this
important treatment benefits diabetes patients and subsequently
delivers substantial value to Amylin's shareholders. Carl Icahn and
Eastbourne Capital Management, L.L.C., on the other hand, offer a
different approach for the future of the Company. Despite their
protestations to the contrary, their often stated agenda is the
sale of Amylin, and they have selected a slate of nominees that
reflects this intent. Your Board strongly believes that a premature
sale of the Company -- before Amylin's shareholders fully realize
the value of exenatide once weekly -- is simply not the right or
responsible strategy. We urge you to vote to elect Amylin's
Director nominees and protect the value of your investment. Vote
the BLUE proxy card TODAY by telephone or Internet, or by signing,
dating and returning the BLUE proxy card in the postage paid
envelope provided. Please discard any Gold or White proxy cards you
receive from Carl Icahn or Eastbourne Capital Management, L.L.C.,
respectively, and vote the BLUE proxy card today. UNDER YOUR
BOARD'S LEADERSHIP AMYLIN IS SUCCESSFULLY EXECUTING ITS STATED
STRATEGY AND ACHIEVING KEY MILESTONES In the fall of 2008, Amylin
clearly articulated its strategy for creating value in 2009 and
beyond. Your Board and management team have already delivered on
several key strategic initiatives, including: -- May 5, 2009: Early
submission of New Drug Application (NDA) for exenatide once weekly
to U.S. Food and Drug Administration (FDA). -- May 4, 2009: New
specialty sales force approach to more effectively target the
diabetes market -- plan will reduce sales force by 35% and save $45
million annually beginning in 2010. -- April 15, 2009: Launch of
ExenatideOne to optimize cost structure and drive efficiency with
partner Eli Lilly and Company. We note that Mr. Icahn and
Eastbourne ignore the achievement of these milestones because they
are inconsistent with their "sell now" agenda. THE EXENATIDE ONCE
WEEKLY OPPORTUNITY Within the next two decades, cases of diabetes
are estimated to grow by 55% globally. Last year there were over 23
million people with diabetes in the United States alone. Exenatide
once weekly will be the first once-a-week treatment for type 2
diabetes and has the potential to transform the treatment of the
disease. Industry experts have recognized the significance and
commercial potential of exenatide once weekly: -- "Many analysts
believe that if [exenatide once weekly] makes it through [the FDA
approval process it] may be a blockbuster, maybe even a mega
blockbuster drug." -- Mike Huckman, CNBC, Pharmaceutical Reporter,
May 5, 2009 -- "We believe exenatide [once weekly], once approved
as the first once-weekly agent from the GLP-1 class, should help
drive the company toward sustainable profitability." -- Matthew
Osborne, Senior Biotechnology Analyst, Lazard, April 30, 2009 ICAHN
AND EASTBOURNE SUFFER FROM A FUNDAMENTAL MISUNDERSTANDING OF
AMYLIN'S BUSINESS In pursuit of their agenda, Mr. Icahn and
Eastbourne have launched a number of ill-informed attacks and
comparisons that we believe reflect a lack of basic understanding
of our business. 1. Attacking the Relationship with our Partner Eli
Lilly and Company An essential element of Amylin's growth has been
the successful partnership of Amylin with Lilly. We entered into a
partnership with Lilly that was extremely beneficial to our
shareholders and was well-received by the financial community.
Amylin maintained control of the exenatide molecule and obtained
the financial and operational support of a powerful leader in the
diabetes sector. This combination enabled us to grow BYETTA(R)
(exenatide) injection, a first-in-class alternative, into a source
of nearly $700 million in annual revenues in 2008 over a period of
only three and a half years. We built a platform and an overall
framework for growth of our next generation, exenatide once weekly,
by: -- Establishing a leading franchise with our current injectable
product BYETTA. -- Completing extensive clinical studies
establishing the superiority of exenatide once weekly to
competitive agents. -- Learning what high-prescribing physicians
and patients want from our medicines. As we near the completion of
the development phase of exenatide once weekly, we have taken a
number of decisive steps to maximize the value of Amylin. The
results: -- The ExenatideOne structure -- the Amylin and Lilly
integrated medical, development and marketing team based in San
Diego that will be focused solely on maximizing the value of the
exenatide molecule. -- A streamlined sales force focused on
high-prescribing physicians and positioned specifically for the
exenatide once weekly opportunity. -- Substantial financial support
from Lilly as we enter into the next stage of our growth. --
Improved operating results for Amylin shareholders. The attempts of
Mr. Icahn and Eastbourne to undermine this partnership are
troubling, given the importance and clear benefits of Amylin
working with Lilly at this critical point. 2. Criticizing the Sales
Force Strategy Initially, our sales strategy was focused on the
broad and deep market penetration of BYETTA. Through these
substantial selling efforts, we developed relationships with key
physicians, learned about their prescribing habits and achieved
critical mass for BYETTA. As recently announced, we are optimizing
our sales force to realize our objective of maximizing the number
of physicians prescribing BYETTA and achieving maximum synergy with
the Lilly sales force. With the level of penetration established
through the BYETTA rollout, we believe that this optimization will
support the successful launch of exenatide once weekly. These
initiatives support our previously announced objective to be cash
flow positive by the end of 2010. The Company's new sales force
approach is expected to result in an annualized benefit of
approximately $45 million to GAAP operating results in 2010.
Contrast this plan to the observations by Mr. Icahn, who suggested
slashing 30% of the costs (over and above the cost savings
initiatives adopted last fall) by focusing on areas such as
insurance and logistics. We believe this "cookie-cutter" approach
demonstrates a fundamental misunderstanding of Amylin's business
and would significantly impair our ability to maximize the value of
Amylin through the commercialization of exenatide once weekly. 3.
Citing Previous "Success" Mr. Icahn has frequently referred to his
experience at ImClone as a principal reason to vote for his slate.
Let's examine some of the assertions made by Mr. Icahn: -- Tighter
cost controls by Icahn nominees led to higher free cash flow. --
ImClone's costs actually increased by $113 million from 2005 to
2007 when his nominees were on the Board, reducing profitability
from otherwise high margin royalties. -- The increase in free cash
flow while his nominees were on the Board was largely driven by
Merck KGaA nearly tripling sales from $265 million in 2005 to $656
million in 2007 and ImClone completing construction of their $334
million BB50 manufacturing facility during the fourth quarter of
2005. This led to major reduction in CAPEX, not tight cost controls
from Icahn. -- Icahn's nominees helped deliver results. -- During
the Icahn representatives' brief two-year tenure, analysts reduced
revenue estimates on four separate occasions and ImClone's earnings
twice fell short of consensus expectations. -- ImClone shares
dramatically outperformed. -- Absent the sale to Lilly, during Dr.
Alexander Denner's tenure on the Board, ImClone's stock price
actually underperformed the comparable companies that Icahn himself
identified in his proxy presentation, underscoring his only path to
value creation is a sale. (Dr. Denner is one of Mr. Icahn's
Director nominees.) (For additional information, please see the
attached slides. Links to the slides can be found at the end of
this letter.) Mr. Icahn has publicly touted his disdain for
corporate boards. Of the nine companies where Mr. Icahn has
obtained Board representation since 2000, ImClone is the only one
with positive price performance. The other eight are down an
average of 63% since his representatives joined the Board: Company
Value Situation Industry "Creation" Adventrx Pharmaceuticals - 94%
Other Biotechnology Blockbuster - 93% Proxy Fight Retail/Services
BKF Capital - 85% Other Financial Federal Mogul(2) - 63% Other Auto
Parts Motorola(1) - 42% Proxy Fight Technology/Telecom ImClone 126%
Proxy Fight / Biotechnology Systems(4) Company sold WCI Proxy Fight
Construction Communities(1) - 100% XO Holdings(3) - 12% Other
Technology/Telecom Yahoo!(1) - 30% Proxy Fight Internet Source:
CapIQ, Shark Repellant, public sources as of 27-Apr-2009 Note:
Companies listed are situations where Icahn and /or his affiliates
obtained board representation since 2000. Performance is measured
from the day Icahn or an affiliate was placed on the board to
27-Apr-2009 (1) Company agreed to nominate dissident(s) at the
annual meeting of shareholders. The board joining date is the date
of the annual meeting where the dissident(s) were first up for
election. (2) Federal-Mogul performance is measured from
6-Dec-2007, the date it emerged from bankruptcy. (3) XO Holdings
performance is measured from 23-Jan-2003, the date it emerged from
bankruptcy. (4) ImClone agreed to be acquired by Eli Lilly on
6-Oct-2008. Final sale price is the $70 cash consideration offered
by Eli Lilly. 4. Asserting that their Nominees Are Better Qualified
than Your Board's Nominees In recent years, Amylin has developed
and commercialized two first-in-class products, positioning the
Company to deliver a potentially transformational drug -- exenatide
once weekly. Your Board's slate has extensive experience in
biopharmaceuticals and diabetes as well as valuable sales and
marketing expertise. In addition to the ten current Directors
standing for re-election, we are further strengthening your Board
by proposing two new independent Director nominees: Paul N. Clark,
former Chairman, Chief Executive Officer and President of Icos
Corporation, and Paulo F. Costa, former President and Chief
Executive Officer of Novartis U.S. Corporation. Both bring
additional commercial and operational expertise in the
biopharmaceutical industry, which are key attributes requested by
our shareholders. AMYLIN'S SLATE IS BEST QUALIFIED TO UNLOCK
LONG-TERM VALUE Your Board has the knowledge and expertise to
continue to successfully execute Amylin's strategy, with: -- A
proven track record -- successfully overseeing development and
commercialization of two first-in-class products and positioning
Amylin to deliver a potentially transformational drug. -- Director
nominees who have extensive diabetes and biopharmaceutical
experience as well as valuable sales and marketing expertise. In
contrast, the Icahn and Eastbourne nominees: X Lack diabetes
knowledge. X Lack understanding of the Company and industry
expertise. X Have predominantly financial backgrounds that reflect
their short-term "sell now" agenda -- one of them would need to
retire within one year given the Company's mandatory retirement
age. The relevant experience of the Icahn and Eastbourne nominees
pales in comparison to the qualifications of the five nominees they
are seeking to replace. While Mr. Icahn and Eastbourne have both
recently publicly stated their intention to maximize the exenatide
once weekly opportunity, their five nominees lack the relevant
diabetes knowledge and industry expertise to best serve Amylin and
its shareholders at this critical time. Given their nominees, Icahn
and Eastbourne clearly appear to be focused on a sale of Amylin
before you can realize the substantial value inherent in the
exenatide once weekly opportunity. 5. Mischaracterizing our
Interactions It is important for shareholders to know that Amylin's
Board has acted in good faith in its interactions with Mr. Icahn
and Eastbourne. We respect their level of stock ownership and have
worked with both parties in an effort to resolve the proxy contest
and reach an agreement that is in the best interests of all
shareholders. Amylin has: -- Offered Board representation to both
Mr. Icahn and Eastbourne. -- Facilitated three-way discussions. --
Permitted them to engage in discussions regarding a potential
settlement without triggering Amylin's shareholder rights
agreement. -- Worked out, with no up-front cost, a favorable waiver
of the "change in control provision" in our credit agreement.
Despite our best efforts, Mr. Icahn and Eastbourne continue to
pursue a fundamental change in the composition of your Board and a
dramatic shift in strategy with a slate whose only agenda is a
premature sale of the Company. We believe their presence on the
Board could jeopardize the important actions we are taking to
maximize Amylin's future growth and success. SECURE AMYLIN'S FUTURE
AND POTENTIAL OF EXENATIDE ONCE WEEKLY -- VOTE FOR YOUR COMPANY'S
NOMINEES ON THE BLUE PROXY CARD TODAY The election of any of the
nominees put forward by Mr. Icahn and Eastbourne, who reject the
Company's strategy, will jeopardize Amylin's ability to maximize
value for all shareholders and significantly impair the Company's
ability to fulfill the unmet needs of millions of diabetes patients
We urge you to act now to maximize the value of your investment by
voting your BLUE proxy card TODAY. Please discard any Gold or White
proxy cards you might receive from Mr. Icahn or Eastbourne,
respectively. As referenced earlier in this letter, below are
individual links to the respective slides: (Slide 1:
http://www.newscom.com/cgi-bin/prnh/20090511/NY14465-a) (Slide 2:
http://www.newscom.com/cgi-bin/prnh/20090511/NY14465-b) (Slide 3:
http://www.newscom.com/cgi-bin/prnh/20090511/NY14465-c) (Slide 4:
http://www.newscom.com/cgi-bin/prnh/20090511/NY14465-d) (Slide 5:
http://www.newscom.com/cgi-bin/prnh/20090511/NY14465-e) (Slide 6:
http://www.newscom.com/cgi-bin/prnh/20090511/NY14465-f) (Slide 7:
http://www.newscom.com/cgi-bin/prnh/20090511/NY14465-g) On behalf
of your Board of Directors, we thank you for your continued
support. Sincerely, /s./ James N. Wilson Lead Independent Director
Your Vote Is Important, No Matter How Many Or How Few Shares You
Own If you have questions about how to vote your shares, or need
additional assistance, please contact the firm assisting us in the
solicitation of proxies: INNISFREE M&A INCORPORATED
Stockholders Call Toll-Free: (877) 717-3926 Banks and Brokers Call
Collect: (212) 750-5833 IMPORTANT We urge you NOT to vote using any
White or Gold proxy card sent to you by Icahn or Eastbourne, as
doing so will revoke your vote on the BLUE proxy card. If you have
already done so, you have every legal right to change your vote by
using the enclosed BLUE proxy card to vote today -- by telephone,
by Internet, or by signing, dating and returning the BLUE proxy
card in the postage-paid envelope provided. About Amylin Amylin
Pharmaceuticals is a biopharmaceutical company committed to
improving lives through the discovery, development and
commercialization of innovative medicines. Amylin has developed and
gained approval for two first-in-class medicines for diabetes,
SYMLIN(R) (pramlintide acetate) injection and BYETTA(R) (exenatide)
injection. Amylin's research and development activities leverage
the Company's expertise in metabolism to develop potential
therapies to treat diabetes and obesity. Amylin is headquartered in
San Diego, California. Further information on Amylin
Pharmaceuticals is available at http://www.amylin.com/. Forward
Looking Statements This letter contains forward-looking statements
about Amylin, which involve risks and uncertainties. Our actual
results could differ materially from those discussed herein due to
a number of risks and uncertainties, including risks that BYETTA,
SYMLIN or exenatide once weekly may be affected by competition,
unexpected new data, safety and technical issues, or manufacturing
and supply issues; risks that our financial results may fluctuate
significantly from period to period and may not meet market
expectations; risks that any financial guidance we provide may not
be accurate; risks that our clinical trials will not be completed
when planned, may not replicate previous results or achieve desired
end-points; risks that our preclinical studies may not be
predictive; risks that our NDAs for product candidates or sNDAs for
label expansion requests, such as the exenatide once weekly NDA
mentioned in this letter, may not be submitted timely or receive
FDA approval; risks that our expense reductions will not be as
large as we expect; risks that the restructured operations for
exenatide will not produce the results we expect; and other risks
inherent in the drug development and commercialization process.
Commercial and government reimbursement and pricing decisions and
the pace of market acceptance may also affect the potential for
BYETTA, SYMLIN or exenatide once weekly. These and additional risks
and uncertainties are described more fully in the Company's most
recently filed Form 10-K and Form 10-Q. Amylin disclaims any
obligation to update these forward-looking statements. Additional
Information and Where To Find It This letter may be deemed to be
solicitation material in respect of the matters to be considered at
the 2009 Annual Meeting of Stockholders. Amylin has filed the
definitive proxy statement with the Securities and Exchange
Commission ("SEC") on April 20, 2009. INVESTORS AND SECURITYHOLDERS
ARE URGED TO READ THE PROXY STATEMENT, THE BLUE PROXY CARD AND ANY
OTHER RELEVANT DOCUMENTS FILED OR THAT WILL BE FILED WITH THE SEC
BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Investors and
securityholders may obtain the proxy statement and other relevant
documents free of charge at the SEC's Web site, http://www.sec.gov/
or from Amylin Investor Relations at 9360 Towne Centre Drive, San
Diego, California 92121. Participants in Solicitation Amylin and
its directors and executive officers and other members of
management and employees may be deemed to be participants in the
solicitation of proxies in respect of the matters to be considered
at the 2009 Annual Meeting of Stockholders. Information regarding
the interests of Amylin's directors and executive officers in the
proxy contest is included in Amylin's definitive proxy statement.
http://www.newscom.com/cgi-bin/prnh/20090511/NY14465-a
http://www.newscom.com/cgi-bin/prnh/20090511/NY14465-b
http://www.newscom.com/cgi-bin/prnh/20090511/NY14465-c
http://www.newscom.com/cgi-bin/prnh/20090511/NY14465-
http://www.newscom.com/cgi-bin/prnh/20090511/NY14465-e
http://www.newscom.com/cgi-bin/prnh/20090511/NY14465-f
http://www.newscom.com/cgi-bin/prnh/20090511/NY14465-gDATASOURCE:
Amylin Pharmaceuticals, Inc. CONTACT: Alice Izzo, Executive
Director, Corporate Affairs, of Amylin Pharmaceuticals, Inc.,
+1-858-642-7272, ; or Joele Frank, or Annabelle Rinehart, both of
Joele Frank, Wilkinson Brimmer Katcher, +1-212-355-4449, for Amylin
Pharmaceuticals, Inc. Web Site: http://www.amylin.com/
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