Health and Healthcare
Can Carl Icahn Fix Broken Biotechs? (ANX, BIIB, ENZN, IMCL, TELK, FOLD, AMLN, REGN)
Published:
Last Updated:
Carl Icahn is a billionaire financier, activist, and investor. Most think of Icahn as an activist investor that wants to get inside and drive value without having to acquire the whole company to resell it later. This strategy works and works well, so long as the right strategies and efforts are applied properly to each stock. The underlying sector a company is in is critical too, and for some reason Carl Icahn has been trying to do this in biotech stocks. We took the biotech filings from both Mr. Icahn’s own holdings and from Icahn Capital LP to see what Mr. Icahn thinks he has up his sleeves.
CARL ICAHN direct holdings, via several investment vehicles:
Adventrx Pharmaceuticals Inc. (AMEX: ANX) down 80% from highs
Biogen-Idec (NASDAQ: BIIB) down about 25% from highs
Enzon Pharmaceuticals (NASDAQ: ENZN) down only 16% from highs
ImClone Systems (NASDAQ: IMCL) down 18% from highs
Telik Inc. (NASDAQ: TELK) down over 50% from highs
ICAHN CAPITAL LP direct holdings:
Adventrx Pharmaceuticals Inc. (AMEX: ANX) down 80% from highs
Amicus Therapeutics, Inc. (NASDAQ: FOLD) down 45% from highs
Amylin Pharmaceuticals Inc. (AMLN) down 40% from highs
APPLERA (NYSE: ABI) down 10% from highs
Biogen-Idec (NASDAQ: BIIB) down about 25% from highs
Enzon Pharmaceuticals (NASDAQ: ENZN) down only 16% from highs
Regenron Pharmaceuticals (NASDAQ: REGN) down about 28% from highs
Telik Inc. (NASDAQ: TELK) down over 50% from highs
*** percentage down from highs means the 52-week highs, so many are off much more than all-time or historical highs.
It may not be fair to refer to all of these as broken, because many aren’t. What is interesting here is that if you follow biotech stocks and if you know these companies, most of these have fallen from their former glory.
Here is the problem with biotech stocks: They almost HAVE to be public to live up to expectations, so they very rarely go private because of the need for capital. The mere nature of putting molecules and modified products into your body has risks, and many companies cannot control what happens or how people their meds after a while. Biotech companies cannot control the FDA and they cannot control independent verification or investigative studies. No company can control whether or not a competitor comes out with a greater product. Biotechs are different in that investors would rather see a biotech spend cash to acquire another biotech rather than engage in a share buyback or pay out a dividend. When was the last time you heard a broker or an investor discuss the high dividend check they expect from their biotech? Me neither…
Mr. Icahn has a great track record of influencing companies. He made a fortune off the move in Time Warner. Motorola has so far been a flop and Yahoo! is just getting started. But he didn’t become a billionaire by throwing darts nor by investing in mutual funds.
But there is a real discourse here from biotechs to other sectors, and it would just seem much easier for Mr. Icahn to get better returns elsewhere. It might be easier backing high-risk and high-reward biotech ventures from scratch instead of trying to fix existing biotechs with problems.
You can join our open email distribution list to hear about activist investing, special financings, M&A, IPO’s, secondary offerings, and other special situations.
Jon C. Ogg
May 16, 2008
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.