CORRECTED - UPDATE 3-Icahn seeks to nominate 3 to Biogen board

(Corrects sixth paragraph to show Richard Young was not nominated by Icahn last year)

* Two of the three were part of Icahn's ImClone team

* Biogen: evaluating in best interest of all holders

* Biogen's shares fall 1.1 percent (Adds background, history, context)

By Toni Clarke

BOSTON, Jan 28 (Reuters) - Biogen Idec Inc (BIIB.O) received notice from billionaire investor Carl Icahn that he intends to nominate three people to its board as he seeks to expand his influence at one of the world's biggest biotech companies.

Cambridge, Massachusetts-based Biogen, which makes the multiple sclerosis drugs Avonex and Tysabri, said on Thursday it will evaluate the nominees and the proposal and make a recommendation "in the best interests of all shareholders."

Two of Icahn's three nominees -- Thomas Deuel and Eric Rowinsky -- were part of the Icahn team that took control in 2006 of biotechnology company ImClone Systems, which Icahn sold Eli Lilly & Co (LLY.N) in 2008 for $6.5 billion.

Icahn's ImClone team was led by Alexander Denner, who was elected to Biogen's board last year, along with Richard Mulligan, a professor of genetics at Harvard Medical School and a former member of ImClone's Scientific Advisory Committee.

"I see this as Icahn's deliberate intention to take control of the board," said one portfolio manager, who owns 244,000 Biogen shares but asked to remain anonymous for compliance reasons. "He's taken a page out of the book of ImClone."

Icahn's third nominee is Richard Young, a professor of biology at the Massachusetts Institute of Technology.

There are four seats on Biogen's board up for election this year. Icahn also proposes to amend amend the company's bylaws to fix the number of directors at its current 12 seats.

Icahn Partners LP and affiliates reported owning 16.1 million shares, or 5.56 percent of the outstanding shares.

ICAHN'S PERSISTENCE

In 2007, under pressure from Icahn, Biogen put itself up for sale but failed to find a buyer. Icahn accused the company of deliberately sabotaging the sale process by making it difficult for potential buyers to talk to key Biogen partners.

The following year, Icahn launched an unsuccessful attempt to place three directors on the company's board. Last year, however, investors voted in Denner and Mulligan, and Icahn is clearly determined not to let go.

He has floated the idea of splitting Biogen into two companies - one focused on neurology, the other on cancer, since Biogen also makes the cancer drug Rituxan. But if that idea falls flat, he may push again for a sale.

Biogen generated more than $4 billion in revenue in 2008, driven by Avonex, which accounts for half its revenue, and Tysabri, its newer multiple sclerosis drug that is widely considered to be the most effective on the market but whose growth has been slowed due to safety concerns.

Tysabri was temporarily withdrawn from the market in 2005 after being linked with progressive multifocal leukoencephalopathy, or PML. It was reintroduced in July 2006 with stricter safety warnings, but 31 cases of the disease have been reported, and the company says the risk of developing PML increases with time.

As more patients approach the two-year treatment mark, the risk exists that more cases of PML will be reported, potentially leading physicians to put their patients on a "drug holiday" and crimping sales. Tysabri is expected to generate more than $1 billion in 2009.

BUYER INTEREST?

When Biogen put itself for sale in 2007, the company blamed the lack of interest by big pharmaceutical companies on their fear that sales of Tysabri could implode. That may still weigh heavily, at least for now, but there are also signs big drug companies are interested.

Last year Johnson & Johnson (JNJ.N) paid $885 million for an 18.4 percent stake in Irish drugmaker Elan Corp Plc (ELN.I) in a move some saw as an indirect expression of interest in Biogen. Biogen and Elan jointly market Tysabri and each has an exclusive right to acquire the other's 50 percent share of the drug if there is a change of control at their opposite number.

An agreement between J&J and Elan, subsequently struck down by a court, would have put J&J in prime position to acquire Biogen without competition from rival bidders.

Of the four Biogen board seats up for election, Chief Executive James Mullen is set to retire and will not stand. Neither will Bruce Ross, the company's former chairman.

The other two board seats are occupied by Brian Posner, previously CEO of ClearBridge Advisors LLC, and Nancy Leaming, the retired CEO of Tufts Health Plan.

Posner was part of Icahn's slate of nominees to the board of Yahoo in 2008.

Biogen's shares were down 1.1 percent to $53 in afternoon trading on Nasdaq, amid broad losses for stocks. (Reporting by Toni Clarke, editing by Gerald E. McCormick and Tim Dobbyn)