Eastbourne Capital Management, L.L.C. today announced that it
sent a letter to the Board of Directors of Amylin Pharmaceuticals,
Inc. (NASDAQ: AMLN) earlier this week noting that the arguments put
forward on behalf of the incumbent Board have failed to persuade
key independent thinkers as evidenced by the unanimous
recommendations of the three leading proxy voting advisory services
� RiskMetrics Group, Glass Lewis & Co and PROXY Governance �
that Amylin shareholders will benefit from new leadership and new
directors are needed to oversee the Company�s efforts to become a
successful commercial enterprise and that Amylin shareholders
should support the shareholder nominees for election to the board
at the 2009 Annual Meeting of Shareholders.
In the letter, Eastbourne also expressed its belief that the
incumbent Board could, if it chose, bring the election contest to
an amicable conclusion by coming to an understanding with
Eastbourne and Carl Icahn to offer Amylin shareholders the
opportunity to support a unified slate made up of Eastbourne, Icahn
and company nominees and offered to meet with the Board or its
advisors to reach such a resolution. Eastbourne was informed today
that Amylin�s Board has determined not to accept Eastbourne�s
proposed resolution.
Richard J. Barry, Eastbourne Founder and Portfolio Manager,
commented, �There has been a resounding call for change to the
Amylin Board and broad recommendations for the election of new
directors. Leading independent proxy voting agencies, shareholders
representing nearly a quarter of the Company�s outstanding shares
and Amylin�s own founder support change. However, the incumbents
continue to spend valuable resources and time when they could
resolve this contest and move forward to address the critical
issues facing the Company. Given their level of share ownership,
the incumbents bear little, if any, personal risk should Amylin
fail as a commercial enterprise, so we are urging shareholders to
support new leadership that is unencumbered by Amylin�s past
failures and will help this company reach its full potential.�
Added Barry, �We urge Amylin shareholders to support change and
vote for all three of our nominees � Dr. Kathleen Behrens, Charles
Fleischman and Jay Sherwood � on Eastbourne�s WHITE proxy
card today.�
The full text of the letter follows:
May 18, 2009
Board of DirectorsAmylin Pharmaceuticals, Inc.9360 Towne Centre
DriveSan Diego, California 92121
Mr. Paul Clark
Mr. Paulo Costa
Ladies and Gentlemen:
The date of Amylin�s annual shareholders meeting is fast
approaching.
Representatives of the company, on your behalf, have repeated a
mantra of assertions in an effort to convince shareholders to
preserve you in office and elect two new directors you have
selected and not to support the election of either Eastbourne�s or
Carl Icahn�s nominees. These have included the following: (i) the
company is performing well today despite the poor results reported
in the recent past; (ii) management has a comprehensive plan to
succeed in commercializing Exenatide; (iii) Eastbourne and Carl
Icahn are advocates of a quick sale at a depressed and unattractive
price; (iv) none of Eastbourne�s three nominees or Carl Icahn�s two
nominees has sufficient relevant experience or qualifications to
serve on the Board; and (v) change in the direction of the company
is not needed because you and management are now poised to succeed
(where we believe you have consistently failed in a number of key
respects for the last few years).
It is clear that these arguments have failed to persuade a
number of key independent thinkers that have spoken out publicly in
this election in recent days.
As I trust you all know by now, each of the three leading
independent proxy voting advisory services have come to the same
conclusion that Amylin will benefit from new leadership to oversee
the Company�s efforts to become a successful commercial enterprise.
They all agree that a fresh perspective is needed to address the
Company�s current critical issues and position it to take advantage
of the tremendous opportunities in Amylin�s R&D pipeline.
If you haven�t had a chance yet to read
the three reports for yourselves, let me share with you just a few
quotes from each of them:
� � � � � � � � � �
�Most of the Amylin
shareholders to whom we spoke, even the shareholders that are
likely to support the company, acknowledge that Amylin has not
fired on all strategic pistons.�
�
�[N]ominee Behrens would bring
significant venture capital experience to the board, as well as
significant experience in the scientific public sector, a factor
that may become more important as the new administration attempts
to retool public healthcare.�
�
�[N]ominee Fleischman would
bring significant experience in establishing commercialization
partnerships with large pharmaceutical companies, as well as
significant experience navigating the FDA.�
�
RiskMetrics Group, Inc.
(1)
�
�Based on these considerations,
we believe that the current board could benefit from the
participation of new representatives with a fresh perspective. The
participation of outside directors will help ensure that Amylin�s
board addresses the current issues at the Company and positions the
business for the opportunities going forward.�
�
�[C]onsidering the long term
performance troubles, we believe that the additional participation
of a large outside investor could help the board hold management
accountable for its performance. As such, we support the election
of Jay Sherwood, a Managing Director of Eastbourne, to the Amylin
board.�
�
Glass Lewis & Co
(2)
�
�Because we believe the
dissidents have made a compelling argument that the board needs
additional expertise to effectively oversee the company�s
transition into a successful commercial enterprise, we believe
shareholders would be best served by electing the five dissident
nominees to join the seven incumbent directors the dissidents are
also supporting.�
�
PROXY Governance, Inc.
(3)
�
I would be happy to provide you with full copies of each of the
reports in the event you haven�t received them.
You�ve also lost the support of Ted
Greene, the company�s founder and one of its largest individual
shareholders, who until recently served alongside you and who
obviously knows the company intimately. We believe all shareholders
should be thankful that he had the courage and conviction of his
views on what was right for Amylin and all Amylin shareholders to
speak up candidly and acknowledge the need for a new direction at
the Board level. He recently explained his viewpoint
succinctly:
� � � � � � � � � �
Amylin is a great company with
great technology and great employees. But, our board�myself
included�using our best judgments at the time went down the wrong
path for launching us into the commercial arena. In recognition of
this, I think shareholders would be well served by supporting new
members on our board. (4)
�
Furthermore, in the last few weeks, through the lawsuit in
Delaware, Amylin�s shareholders have also learned that neither the
company�s CEO, nor its CFO, nor the Board had any idea of the
existence of the �poison put� provisions contained in the company�s
key debt agreement until years after it was approved by the board.
While the judge did not find this failure to be informed sufficient
to breach the board�s legal duty of care, we nevertheless regard it
a shocking and disturbing example of inattention and poor
oversight.
In the heat of battle during proxy fights like this one, where
much is at stake, resort is often made to hyperbole by both sides.
Though I cannot deny we believe the board has not functioned as we
believe it should have, Jay and I know many of you personally, some
of you well, and I want to pause to assure you that we respect each
of you as professionals and individuals. Also, should Chuck, Kathy
and Jay and the Icahn nominees be elected, I am confident that they
would leave the acrimony of the contest behind them and jump into
working with their fellow board members constructively and openly
to advance the interests of the company and all its shareholders. I
am equally confident that those of you who are elected, either as
unopposed candidates or otherwise, will also choose to serve all
shareholders interests in a similar manner by working side by side
with these new individuals.
I believe you could, if you choose, bring this contest to an
amicable conclusion by coming to an understanding with Eastbourne
and Mr. Icahn to offer shareholders the opportunity to support a
unified slate that adds four or five of Eastbourne�s and Icahn�s
nominees to the group of company nominees we have earlier discussed
on a board of 11 to 13 directors. It will be disappointing if,
rather than welcoming new, eminently capable, shareholder-sponsored
directors, you choose to continue a proxy contest and draw valuable
resources and time away from addressing the issues facing the
company.
As time is short, we sincerely hope that you will respond
quickly and privately in the next day to our offer to meet with you
or your advisors to reach a mutually satisfactory resolution in the
best interests of all Amylin�s shareholders and diabetes patients
everywhere.
Sincerely,
/s/
Richard J. BarryFounder & Portfolio ManagerEastbourne
Capital Management, L.L.C.
cc: � � Mr. Carl Icahn Dr. Alexander Denner Dr. Thomas Deuel Dr.
Kathleen Behrens Mr. Charles Fleischman Mr. Jay Sherwood
(1) RiskMetrics Group, Inc. �Amylin Pharmaceuticals Inc. Proxy
Fight with Eastbourne Capital Management and Carl Icahn� (May 15,
2009). (2) Glass, Lewis & Co. LLC �Proxy Paper: Amylin
Pharmaceuticals, Inc.� (May 2009). (3) PROXY Governance, Inc.
�Amylin Pharmaceuticals� (May 17, 2009). Consent to use the
statements in this letter was not sought or obtained from any third
party.
About Eastbourne Capital Management, L.L.C.
Eastbourne Capital Management is a West Coast-based registered
investment advisor that employs an investment philosophy based on
intensive research, a long-term outlook and a belief in working
alongside portfolio companies to enhance shareholder value.
IMPORTANT ADDITIONAL
INFORMATION
Security holders are advised to read the definitive proxy
statement and white proxy card mailed on May 4, 2009, and other
documents related to the solicitation of proxies by Eastbourne
Capital Management, L.L.C., Black Bear Fund I, L.P., Black Bear
Fund II, L.L.C., Black Bear Offshore Master Fund, L.P., Richard J.
Barry, M. Kathleen Behrens, Charles M. Fleischman and Jay Sherwood,
from the shareholders of Amylin Pharmaceuticals for use at the 2009
Annual Meeting of Shareholders of Amylin Pharmaceuticals because
they contain important information. Such materials are, along with
other relevant documents, available at no charge at the Securities
and Exchange Commission�s website at http://www.sec.gov or by
contacting MacKenzie Partners, Inc. by telephone collect at (212)
929-5500, toll-free at 1-800-322-2885 or by e-mail at
amylinproxy@mackenziepartners.com. Information relating to the
participants in such proxy solicitation is contained in
Eastbourne�s definitive proxy statement.
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