Icahn Blasts Forest Labs’ Directors

In an open letter to the board of directors of Forest Laboratories Inc. (NYSE: FRX), activist investor Carl Icahn doesn’t beat around the bush:

Your recent letter has taken things a step further from obfuscation to blatant mischaracterization.

Icahn then proceeds to defend the four candidates he has proposed for Forest’s board, all of whom were declared “unqualified” by Forest’s existing board.

Then Icahn really gets rolling:

Under your watch, Forest has underperformed your self-chosen peer companies by 21% since last year’s meeting. Given that underperformance, it wouldn’t surprise me if many shareholders vote differently this time around. YOU SHOULD NOT USE LAST YEAR’S VOTE AS AN EXCUSE FOR COMPLACENCY. [Emphasis in original]

Forest Labs reported first quarter EPS of $0.28 this morning, better than the consensus estimate of $0.24, and the company also beat revenue estimates, although both were lower than a year ago. Forest has lost patent protection on its antidepressant drug Lexapro and the company said it expects to launch two new products this year.

Forest’s shares are up about 1.7% at $35.77 in a 52-week range of $28.47-$38.99. Whether that bump is due to a decent earnings report or increased pressure from Icahn is arguable.

Paul Ausick