Forest Laboratories Inc.'s (FRX) board slate was backed by the
proxy-advisory firm Institutional Shareholder Services, a day after
billionaire activist investor Carl C. Icahn said another firm
backed one of his candidates.
Icahn is well known for his efforts to push for change in
boardrooms and all of Forest Labs directors are up for re-election.
Icahn's High River LP affiliate put forth four nominees: Alexander
J. Denner, a managing director of entities that advise
Icahn-managed hedge funds; Dr. Richard Mulligan of the Harvard
Medical School; Lucian A. Bebchuk, professor of law, economics, and
finance and director of the program on corporate governance at
Harvard Law School; and Dr. Eric J. Ende.
Yet, the proxy-advisory firm Glass Lewis & Co. only
recommended a vote for Mulligan, as he currently serves on the
boards of Biogen Idec Inc. (BIIB) and Enzon Pharmaceuticals Inc.
(ENZN). The firm said late Tuesday that the share prices of Biogen
and Enzon have increased since Mulligan became involved with their
boards.
"We respectfully disagree with Glass Lewis's recommendation for
Richard Mulligan," said Forest's presiding independent director
Kenneth Goodman, claiming Mulligan "has an obvious conflict of
interest due to his service on the board of Biogen Idec, which
actively competes with Forest for new product licensing and
acquisition opportunities in the areas of cardiovascular health,
neurology, and infectious diseases."
Institutional Shareholder Services' backing of its entire slate
reflects "the high caliber of our director candidates," Goodman
added.
Recently, Egan-Jones Proxy Services also recommended
shareholders vote for all of the company's nominees.
Last month, Forest Labs reported its fiscal first-quarter
earnings more than doubled on fewer charges and lower expenses as
revenue rose 8%.
Forest Labs has made headlines recently after it settled a
federal probe over misconduct in marketing of its antidepressant
Celexa and another drug last year and paid $313 million to resolve
the matter. The U.S. government earlier this month dropped efforts
to force the company's longtime chief executive, Howard Solomon, to
step down over the illegal marketing.
Shares were recently trading down 3.6% at $33.52. The stock has
risen 17% over the past year.
-By Melodie Warner, Dow Jones Newswires; 212-416-2283; melodie.warner@dowjones.com