What Will Icahn Do With Amylin?

It's fun to peruse the Form 13-Fs of the most successful investors. Not only can you get investment ideas, but if you’re an activist investor, you can get a sneak peek at the next company your favorite investors are planning on flexing their muscles against.

Carl Icahn recently took an initial position now worth around $200 million in Amylin Pharmaceuticals (Nasdaq: AMLN), and stockholders must be wondering about his motivation for the purchase. Will he advocate for the company's sale, like he did with Biogen Idec (Nasdaq: BIIB) and MedImmune, which actually did get purchased by AstraZeneca (NYSE: AZN)? Or will he take a more mundane (for him) role and just advocate for management changes, like he did with ImClone Systems (Nasdaq: IMCL)?

I'm guessing Icahn will choose the latter, since selling the company seems like a difficult proposition. Amylin's present and its near-term future are both tied to its diabetes drug Byetta and a follow-on once-weekly version, both of which are partnered with Eli Lilly (NYSE: LLY). Any large pharma that’s interested in boosting its diabetes offerings might not be interested in working hand-in-hand with Eli Lilly. That leaves Amylin's partner as the only likely candidate for a purchase, and it's hard to get a bidding war going with just one player.

It's easy to predict what Icahn's beef with management will be. Sales of Byetta have begun to stagnate, and competition from Novo Nordisk (NYSE: NVO) is right on its heels. He'll likely also complain about Amylin's development of its once-weekly version of Byetta. The drug should increase sales substantially, since it’s much more patient-friendly, but it likely won't be available until 2010, although the pivotal clinical trial is already complete. Still, unless he's planning on grabbing a hammer to help build the new plant, I'm not sure how Icahn is going to help management get the drug to market more quickly.

Until the Investor of the Year nominee comes out and tells us his thinking -- after he finishes dealing with Yahoo! (Nasdaq: YHOO)? -- we'll all be in the dark. But since he's generally had more successes than failures, I don't think Amylin's investors should be upset about Icahn joining their ranks.