Carl Icahn won a victory in his push for a sale of diabetes drug maker Amylin Pharmaceuticals Inc AMLN.O after a Delaware judge fast-tracked the billionaire investor's lawsuit to allow a proxy fight.
Delaware Chancery Court Judge John Noble scheduled a May 10 hearing to consider Icahn's request to delay Amylin's annual meeting, scheduled for five days later.
Friday's ruling decision came as Amylin began exploring a sale and reaching out to prospective buyers, according to people familiar with the situation.
Shares of Amylin were up $2.33, or about 10 percent at $25.25 soon after Nasdaq trading began on Monday.
Icahn, whose 8.94 percent stake has made him Amylin's third-largest shareholder, faulted the maker of Byetta and Bydureon for not revealing it had rejected a $3.5 billion unsolicited takeover bid, or $22 per share, from Bristol-Myers Squibb Co (BMY.N).
The rejected bid came to light in March, after the window to nominate directors to Amylin's board had closed in January under a so-called advance notice bylaw.
Noble said in his 12-page opinion that Icahn adequately alleged that the board "radically changed its outlook for the company" by refusing to engage Bristol-Myers.
If shareholders had known the board was altering its strategy, dissident shareholders would have been proposed, according to Icahn's court papers.
"We continue to believe that Mr. Icahn's lawsuit is without merit and will defend ourselves accordingly," said a statement from Amylin on Monday. "Amylin's Board is fully aware of its fiduciary duties, and is committed to always acting in the best interests of all stockholders."
Icahn did not immediately respond to a request for a comment.
Amylin has hired Credit Suisse, Goldman Sachs & Co and the law firm Skadden, Arps, Slate, Meagher & Flom to provide advice as the drug maker reaches out to perspective buyers, the people familiar with the situation said.
(Reporting By Tom Hals, editing by Dave Zimmerman)