UPDATE 4-Biogen counting votes, but Icahn claims 2 seats

Wed Jun 3, 2009 3:33pm EDT

* Biogen says results of shareholder vote not yet tallied

* Icahn party claims won two of four seats contested

* Biogen shares up 2 pct (Adds details, background throughout)

By Scott Malone

CAMBRIDGE, Mass., June 3 (Reuters) - Biogen Idec Inc (BIIB.O) officials told shareholders on Wednesday they did not yet know if Carl Icahn -- who has called for the biotechnology company to be split in two -- had won seats on the board.

But Alexander Denner, a representative of the activist billionaire investor, told reporters after the company's shareholder meeting that Icahn Partners' proxy solicitors believed it had secured enough votes to claim two of four seats it had sought on the 13-member board.

Icahn, who owns a 5.6 percent stake in the company, wants the board to consider breaking it into two parts, one focused on neurology and the other targeting cancer treatments. This is the second year in a row he has waged a proxy battle against the Cambridge, Massachusetts-based company, one of the oldest and largest biotechs.

Biogen Chairman Bruce Ross -- who had recessed the meeting for three hours saying that some shareholders had not yet had the chance to vote -- called it back to order at 2 p.m. Eastern time (1800 GMT) for less than five minutes.

"Later in June we will receive the final report of the inspector of elections," Ross told shareholders remaining at the meeting. The group appeared smaller than the audience of 100 who sat through the meeting's two-hour opening session.

Icahn himself did not appear at the meeting.

Denner declined to say what margin Icahn Associates believed its nominees had won by.

Biogen spokeswoman Naomi Aoki said the company was still tallying the final vote count and intended to release the total "as soon as possible," but not necessarily on Wednesday.

Biogen shares were up $1.15, or 2.2 percent, at $53.47 in late afternoon on the Nasdaq, off an earlier high at $54.50.

'THEY RAN OUT THE DOOR'

After making a brief statement, Ross and the rest of Biogen's board and top executives filed quickly out of the room, leaving Denner and Richard Mulligan -- the other Icahn-backed director that Denner said had enough votes to be elected -- standing in the theater Biogen had rented for the meeting in Cambridge.

"I actually would have liked to talk to them, but they ran out the door," Denner said.

He said he did not want Icahn's ability to work with Biogen to be hurt.

"We really hope to work with them as a group and do the best for shareholders," Denner said. "I know a number of board members personally on the Biogen board and they're good people ... their specific actions here don't reflect the general board."

Last year, Icahn had sought to sell the company, and his slate of directors was voted down by a ratio of 75 to 25.

"Whether they end up with a couple seats or not, I'm not sure they're going to have material impact on the way this company is run," said Eric Schmidt, analyst for Cowen and Co.

During the morning portion of the meeting, Denner said that the Icahn group believed it could help Biogen grow.

"Our objective really is to bring this to be the next Genentech, if you will, to bring it to the next level in terms of market cap, in terms of its reach within the biotech industry, in terms of the respect it gets in the biotech industry," Denner said. "It should be a larger company and I think it can be over time."

Genentech last year was acquired by Swiss drugmaker Roche Holding AG (ROG.VX) in a $46.8 billion deal.

Icahn last year engineered the $6.5 billion sale of biotechnology company ImClone Systems to Eli Lilly & Co (LLY.N).

"The results of the company speak for itself, its ability to generate earnings and cash flow, its ability to do so with a real consistency," Director Brian Posner said, as part of Biogen's response to Denner.

While some shareholders called on the company to listen to Icahn, others cautioned against taking his advice, recalling how the famed corporate raider in the late 1980s played a role in downsizing now-defunct airline TWA.

"I saw what he did to TWA," said Ray Rogers, a shareholder and labor activist. "If he would do the same thing to this company, you wouldn't want him involved in this company." (Reporting by Scott Malone; Additional reporting by Bill Berkrot in New York; Editing by Maureen Bavdek, Gerald E. McCormick, Matthew Lewis, Gary Hill)

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