In a move prompted by the many failures at ImClone Systems (Nasdaq: IMCL ) over the past years, shareholders yesterday elected notorious corporate raider Carl Icahn to the company's board of directors.
Icahn has been involved with ImClone ever since the aborted planned sale of the company earlier in the year. He owns approximately 14% of the outstanding shares of ImClone, and with his election to the board, he and his cronies now control four out of the 12 seats on the board.
Icahn wasted no time in trying to shake things up once elected. His first act as board member was to immediately call for the ousting of the chairman, David Kies.
Never a man to mince words, Icahn stated: "Given what I consider the sorry record of the company under your watch, it is time for you to step aside and allow someone else to be elected."
Unfortunately for Icahn, later in the day Kies was reelected as chairman of the board, so things will probably be pretty testy in ImClone's boardroom for awhile.
Icahn's election to the board is definitely a net positive for ImClone shareholders. Numerous companies he has gotten involved with have produced some heady share price gains in the past. This does not mean that all his investments have been successes, though, as he has also heavily invested in GM (NYSE: GM ) , Blockbuster (NYSE: BBI ) , and Time Warner (NYSE: TWX ) -- three businesses that have been stagnant and remain in decline despite his involvement.
Going to trial over the dispute over the key Erbitux patents was a spectacular blunder on ImClone's part. After that, the best thing that could probably happen to the company would be to get sold to a larger pharmaceutical company at some premium to the current share price before it has to face the coming competition from biotech heavyweight Amgen (Nasdaq: AMGN ) . This is a resolution that Icahn will no doubt entertain as he begins his tenure on the board.
The bottom line to the whole ImClone saga this week is that anything that shakes up ImClone's board and brings the company back to rational actions (especially regarding the patent lawsuit) should be a welcome change for ImClone shareholders, whether the company puts itself up for sale again or not.
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