Carl Icahn accused drug maker Forest Laboratories Inc. (FRX)
Chief Executive Howard Solomon of selling more than $500 million of
stock ahead of the company's loss of patent exclusivity on
antidepressant Lexapro, as the activist investor stepped up his
attack on the drug maker's management.
The billionaire investor has been in a long-running battle with
Forest Labs, a skirmish revived earlier this month when he
nominated four candidates to its board and said he was seeking
records of the company's actions. Icahn said last week he is suing
Forest Labs in an effort to get information from the drug maker
about its plans for a successor to Mr. Solomon, who is 84 years
old.
"Several years ago you began a pattern of selling Forest stock
at prices substantially higher than today's price. Those sales now
look to me like a savvy bet against the prospects of a company that
was not prepared to meet the calamitous events that would befall it
.. when Lexapro went off patent," Icahn wrote in a letter released
Monday.
Icahn said shareholders who "were not privy to your knowledge
and still hold stock today have suffered very significant
losses."
The company wasn't immediately available for comment.
Icahn, known for his battles with corporate boardrooms, is the
company's second-largest shareholder, with a roughly 10% stake,
according to data provided by FactSet Research.
On Friday, Icahn said in a regulatory filing that the company
has "refused to provide us with documents concerning a number of
items" and told the company's board that he was commencing
litigation.
The company disputed Icahn's claims Friday, saying suggestions
that it hasn't been transparent about plans for a successor to
Solomon "could not be further from the truth."
Last August, the drug maker's shareholders rejected Icahn's
effort to place four of his director nominees on the board and
elected Forest's entire slate instead.
In June, Forest Laboratories reduced its fiscal-year earnings
guidance because of lower-than-expected branded Lexapro sales and
more aggressive pricing for the authorized generic version of the
antidepressant following the March loss of the drug's patent
exclusivity.
Shares were up 2% to $35.70 in recent trading. The stock has
gained 18% so far this year.
Write to Kristin Jones at kristin.jones@dowjones.com