Slide 1: Schedule 14A Proxy Statement
SCHEDULE 14A Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) Filed by the Registrant ¨ Filed by a Party other than the Registrant x Check the appropriate box: ¨ Preliminary Proxy Statement ¨ Confidential, for Use of the Commission Only (as permitted
Slide 2: Filing fee and previous filing information
5) Total fee paid: ¨ Fee paid previously with preliminary materials. ¨ Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or th
Slide 3: Presentation distributed to stockholders; security holders advised to read proxy statement
On May 11, 2009, the Participants (as defined below), distributed a presentation to stockholders of Biogen Idec Inc. It is attached hereto as Exhibit I and is incorporated herein by reference. SECURITY HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT AND OTHER DOCUMENTS RELATED TO THE SOLICITATION OF
Slide 4: Biogen Idec Investor Presentation
Exhibit I Biogen Idec Investor Presentation May 2009
Slide 5: Special note regarding presentation
Special note regarding presentation • This presentation includes information based on data found in filings with the SEC, independent industry publications and other sources. Although we believe that the data is reliable, we do not guarantee the accuracy or completeness of this information and have
Slide 6: Agenda
Agenda • Situation Overview - Strategic failures - Operational failures - Business development failures - Research & development failures • Our Qualifications & Proposals - Biographies of our nominees - ImClone Systems case study - Proposals for Biogen Idec 3
Slide 7: We strongly believe Biogen Idec needs better management
We strongly believe Biogen Idec needs better management • Biogen Idec has a collection of valuable assets - AVONEX for relapsing multiple sclerosis and TYSABRI for MS and Crohn’s disease, $2.8B of 2008 sales - RITUXAN for B-cell non-Hodgkin’s lymphoma and rheumatoid arthritis, $1.1B of 2008 sales -
Slide 8: We believe leadership has failed on many dimensions
We believe leadership has failed on many dimensions Strategic Operational Business Development Research & Development • Biogen – IDEC merger has • Avonex lost US market • Is Biogen Idec defending its • Research and development not created much value leadership MS franchise? productivity worst in pee
Slide 9: Biogen and IDEC supposedly merged to accelerate growth & create shareholder value
Biogen and IDEC supposedly merged to accelerate growth & create shareholder value Biogen, Inc. IDEC Pharmaceuticals Key products • Avonex for relapsing MS • Rituxan for non-Hodgkin’s lymphoma • Amevive for chronic plaque psoriasis • Zevalin for non-Hodgkin’s lymphoma Pipeline • Anti-inflammatory pro
Slide 10: However, merger has failed to create much value
However, merger has failed to create much value Current equity value ($M) $101B 100 75 Change in equity value 50 $43B 25 Q4 2003 equity value $18B $15B Biogen - IDEC merger closed Nov. 2003 0 Genentech Gilead Sciences Celgene Biogen Idec Note: Current price from April 2009; Change in equity value is
Slide 11: Announced merger synergies never materialized
Announced merger synergies never materialized Biogen Idec operating Biogen Idec operating expenses in excess of target ($M) expenses ($M) $1,500M $800M $711M $1,266M Expenses exceeded $1,065M target by 600 1,000 $990M $276M IDEC -$75M $402M $413M 400 Biogen Idec Biogen $276M 500 Idec Biogen 200 0 0
Slide 12: Management turnover makes consistent strategy and execution difficult
Management turnover makes consistent strategy and execution difficult Position / Department Officer in 2003 Officer Today • Chairman • William Rastetter • Bruce Ross • CEO • James Mullen • James Mullen • CFO • Peter Kellogg • Paul Clancy • COO • William Rohn • Robert Hamm • Research & development •
Slide 13: We believe leadership has failed on many dimensions
We believe leadership has failed on many dimensions Strategic Operational Business Development Research & Development • Biogen – IDEC merger has • Avonex lost US market • Is Biogen Idec defending its • Research and development not created much value leadership MS franchise? productivity worst in pee
Slide 14: AVONEX lost US market leadership to COPAXONE, others also grew market share
AVONEX lost US market leadership to COPAXONE, others also grew market share MS Rx market share % Apr-05 Mar-09 Change % 50% 40 COPAXONE 29% 37% 8% 30 AVONEX 42% 28% -14% 20 REBIF 15% 20% 5% BETASERON 14% 15% 1% 10 0 AVONEX lost 14% market share and ceded US market leadership to Note: Data for US; Ma
Slide 15: Biogen Idec has failed to manage Avonex product lifecycle
Biogen Idec has failed to manage Avonex product lifecycle Source: FDA; Company documents 12 Strategy Operational Bus. Dev. R&D
Slide 16: AMEVIVE never lived up to management hype
AMEVIVE never lived up to management hype AMEVIVE sales ($M) $500M $500M 400 300 200 100 $85M Actual $40M April 2003 $12M Projections 0 2003 2006 After failing to achieve April 2003 projections, management sold AMEVIVE for $60M in March 2006 Source: North Carolina Biotechnology Center, Feb. 2003; Co
Slide 17: TYSABRI goals also overly aggressive
TYSABRI goals also overly aggressive TYSABRI patients (K) 100K 100K 80 60 Sep. 2007 Projections 40 37K 20 Actual 0 2009 2010 In Sep. 2007, management expected 100K patients on TYSABRI by 2010 year-end; In Feb. 2009, management said it would be “difficult” to achieve the original 100K projection 14 S
Slide 18: Five year stock performance has trailed peer group
Five year stock performance has trailed peer group Stock performance Change % 500 400 Gilead 205% 300 Sciences Celgene 177% 200 Genentech 61% 100 BTK 10% Biogen Idec -24% 0 Apr-04 Apr-05 Apr-06 Apr-07 Apr-08 Apr-09 Biogen Idec has underperformed peers Note: BTK represents AMEX Biotechnology Index 15
Slide 19: We believe leadership has failed on many dimensions
We believe leadership has failed on many dimensions Strategic Operational Business Development Research & Development • Biogen – IDEC merger has • Avonex lost US market • Is Biogen Idec defending • Research and development not created much value leadership its MS franchise? productivity worst in pee
Slide 20: Business development vital to future prospects
Business development vital to future prospects •Companies must defend and strengthen franchises within core therapeutic areas •It seems Biogen Idec has done very little to defend or strengthen its oncology and MS franchises - Competitors active in both therapeutic areas •Lack of business development
Slide 21: Is Biogen Idec defending its MS franchise?
Is Biogen Idec defending its MS franchise? •Biogen Idec has not participated in any of the approximately dozen multiple sclerosis business development opportunities over the last year •Competitor MS deals in 2008 included: Acquirer Counterparty Merck Serono Apitope Technology Novartis Peptimmune Mer
Slide 22: Is it defending the oncology franchise?
Is it defending the oncology franchise? •Biogen Idec has executed only one of the approximately 150 cancer business development opportunities over the last year •Competitor oncology deals in 2008 included: Acquirer Counterparty Bristol Myers Exelixis Roche ThromboGenics Pfizer Aureon Laboratories Me
Slide 23: Management has completed only five product in-licensing deals in five years
Management has completed only five product in- licensing deals in five years Date Partner Product Consideration • August 2005 • Protein Design Labs • Fontolizumab • $40M upfront • Daclizumab • $100M investment in • Volociximab Protein Design Labs stock • October 2006 • UCB • CDP323 • $30M upfront •
Slide 24: We believe leadership has failed on many dimensions
We believe leadership has failed on many dimensions Strategic Operational Business Development Research & Development • Biogen – IDEC merger has • Avonex lost US market • Is Biogen Idec defending its • Research and not created much value leadership MS franchise? development productivity worst in pee
Slide 25: Biogen Idec research and development productivity worst in peer group
Biogen Idec research and development productivity worst in peer group 5 year gross 10 year gross profit / 5 year R&D profit / 10 year R&D 6.0X 5.9X 6.0X 5.0X 5.0 5.0 4.1X 4.0X 3.9X 4.0 4.0 3.9X 3.6X 3.5X 3.2X 3.1X 3.0 Gilead Genen- Amgen Genzyme Biogen 3.0 Gilead Genen- Amgen Genzyme Biogen Sciences
Slide 26: Lack of R&D focus apparent when comparing employee base with peers
Lack of R&D focus apparent when comparing employee base with peers Note: Employees as of December 2008; Genentech estimate based on estimated retention costs Source: Company documents; Industry estimates 23 Strategy Operational Bus. Dev. R&D
Slide 27: Failure to advance pipeline
Failure to advance pipeline Compound Therapeutic Area 2006 Today BG-12 • Relapsing MS • Phase 3 • Phase 3 Galiximab • Relapsed NHL • Phase 3 • Phase 3 Lumiliximab • Relapsed CLL • Phase 2/3 • Phase 2/3 Ocrelizumab • RA • Phase 2 • Phase 3 Lixivaptan • Hypnoatremia • Phase 2 • Phase 3 ADENTRI • CHF •
Slide 28: Biogen Idec is the only major biotech company with no new drugs since 2004
Biogen Idec is the only major biotech company with no new drugs since 2004 Drug launches since 2004 3 3 2 2 2 1 1 1 0 0 Genzyme Amgen Gilead Genentech Celgene Biogen Idec Drugs Myozyme Nplate Atripla Lucentis Revlimid Renvela Vectibix Letairis Mozobil Source: FDA 25 Strategy Operational Bus. Dev. R&
Slide 29: During that same period, 23 new oncology drugs have been launched
During that same period, 23 new oncology drugs have been launched Oncology drug launches 6 6 6 5 4 4 4 3 2 2 1 1 0 2004 2005 2006 2007 2008 2009 YTD Drug Tarceva Nexavar Vectibix Tykerb Treanda Afinitor Sensipar Arranon Sutent Torisel Sancuso Erbitux Sprycel Tasigna Mozobil Clolar Gardasil Ixempra D
Slide 30: Pipeline seems to lack strategic focus
Pipeline seems to lack strategic focus Biogen Idec Genentech Gilead Sciences Celgene Autoimmune / Inflammation Cardiovascular Hemophilia Neurosciences Oncology Antiviral Source: Company documents 27 Strategy Operational Bus. Dev. R&D
Slide 31: PEGylation is hardly a breakthrough
PEGylation is hardly a breakthrough • PEGylation was a mature, established technology in the 1990’s; Adagen approved in 1990 • 19 years after launch of first PEGylated protein, Biogen Idec still has not launched PEG-IFNB Note: Enzon launched Adagen in 1990 Source: FDA 28 Strategy Operational Bus. De
Slide 32: CEO Mullen paid well despite poor performance and failures across many dimensions
CEO Mullen paid well despite poor performance and failures across many dimensions Note: Equity compensation = stock + option grants as valued in relevant proxy Source: Company documents 29
Slide 33: James Mullen sold ~$85M of stock since merger at average price of ~$59 per share
James Mullen sold ~$85M of stock since merger at average price of ~$59 per share Source: Company documents 30
Slide 34: Are board and management aligned with you?
Are board and management aligned with you? •In our opinion, management ran a flawed auction process last year - Board severely limited due diligence opportunities - Refused to allow bidders access to Elan until bidders submitted a firm and binding offer - At least one bidder was denied its request t
Slide 35: Who is most aligned with your interests?
Who is most aligned with your interests? Biogen Idec shares owned 20,000,000 16,075,256 15,000,000 10,000,000 5,000,000 778,198 14,700 0 Icahn Parties Board & management Class 3 directors up for election Source: Company documents 32
Slide 36: Agenda
Agenda • Situation Overview - Strategic failures - Operational failures - Business development failures - Research & development failures • Our Qualifications & Proposals - Biographies of our nominees - ImClone Systems case study - Proposals for Biogen Idec 33
Slide 37: Our nominees helped deliver results at ImClone
Our nominees helped deliver results at ImClone Name Education Relevant experience • Alex Denner • M.S., M.Phil., Ph.D. from Yale University • Managing Director, Icahn Partners • S.B. from Massachusetts Institute of Technology • Director, Adventrx Pharmaceuticals • Former Portfolio Manager, Viking Gl
Slide 38: ImClone shares dramatically outperformed during new executive committee tenure
ImClone shares dramatically outperformed during new executive committee tenure ImClone Systems Biogen Idec share price ($) share price ($) Change % Change % $80 $80 $70.00 60 60 $44.94 $40.64 40 40 $31.00 126% 20 20 -10% 0 0 Oct-06 Nov-08 Oct-06 Nov-08 Note: Executive committee of Alex Denner and Ri
Slide 39: Long term focus to build ImClone shareholder value
Long term focus to build ImClone shareholder value ImClone stock price ($) S&P 500 Index ImClone acquired by Eli Lilly for $70 per share $80 2,000 July 31, 2008 ImClone receives $60 offer from Bristol-Myers Squibb 60 1,500 Alex Denner becomes chairman of 40 executive committee 1,000 Bristol-Myers 20
Slide 40: New executive committee enhanced value at ImClone
New executive committee enhanced value at ImClone • New executive committee, including Alex Denner and Richard Mulligan, formed in October 2006 • Embarked on a comprehensive review of the company’s operations which led to the following courses of action: - Recharged partner relations - Optimized cos
Slide 41: Recharged ImClone partner relations and optimized cost structure
Recharged ImClone partner relations and optimized cost structure • Recharged partner relations - Partnership with Bristol-Myers Squibb had deteriorated due to prior management neglect - Initiated dialogue and led negotiations, ultimately leading to new agreement with Bristol- Myers Squibb that expan
Slide 42: Rebuilt pipeline, changed culture and settled litigation
Rebuilt pipeline, changed culture and settled litigation • Rebuilt product pipeline - Industry had poor perception of ImClone pipeline and research and development efforts - Executive committee conducted top-down review of pipeline Significantly increased investments in particularly promising candid
Slide 43: From 2005 to 2007, ImClone royalty revenue grew by 37% annually
From 2005 to 2007, ImClone royalty revenue grew by 37% annually WW ERBITUX sales ($M) CAGR ImClone revenue ($M) CAGR 05-07 05-07 $1,500M $600M $591M 24% Collab. $1,348M 41% reimb. 5% Manuf. 39% 1,000 EU 57% 400 $383M License fees & 3% milestones $678M 500 200 Royalties 37% USA 29% 0 0 2005 2007 2005
Slide 44: Tighter cost controls contributed to higher free cash flow
Tighter cost controls contributed to higher free cash flow ImClone % of revenue ImClone FCF ($M) 100% 100% 100% $200M $74M $183M EBIT 80 COGS 150 60 Royalties $93M 40 SG&A 100 20 Research & development 50 0 $16M 2005 2007 0 2005 EBITDA Capex 2007 EBIT FCF growth reduction FCF margin % 23% 27% Note:
Slide 45: Increased R&D investment to improve pipeline and future competitive position
Increased R&D investment to improve pipeline and future competitive position ImClone R&D spend ($M) CAGR ImClone product 05-07 candidates $200M $194M 16% 50 44 150 $145M 40 Other 34 100 30 Pancreatic Non-small cell lung 20 50 Head & neck 10 0 Colorectal 2005 2007 0 R&D % 2005 2007 of sales 38% 33% N
Slide 46: Increased R&D investment improved pipeline
Increased R&D investment improved pipeline Phase 1 Phase 2 Phase 3 1121b: 2005 status 2008 status A12: 2005 status 2008 status 11F8: 2005 status 2008 status 18F1: Pre-clinical 2008 status UCB: 2005 status Exited 43
Slide 47: We believe ImClone and Biogen Idec situations analogous
We believe ImClone and Biogen Idec situations analogous ImClone Systems Biogen Idec Partner relations • Relationships with Bristol Myers Squibb were • Relationships with Genentech, Roche and strained Elan are strained • Renegotiated agreement with BMS, leading to increased support and sales Cost str
Slide 48: We have several proposals
We have several proposals • Board should study potential splitting of Biogen IDEC into neurology-focused and cancer-focused companies • Examine cost structure • Prioritize, improve focus, and re-invigorate R&D efforts • Improve partner relationships 45
Slide 49: Board should evaluate whether separating assets will enhance value
Board should evaluate whether separating assets will enhance value Neurology-Focused Company Cancer-Focused Company • NF Co. had $2,926M of 2008 sales • CF Co. had $1,172M of 2008 sales • NF Co. assets include the following: • CF Co. assets include the following: - Key products include AVONEX and -
Slide 50: Separated assets have different growth profiles
Separated assets have different growth profiles Biogen Idec revenue ($M) $5,000M $4,402M $4,451M $4,098M 4,000 CF Co. $3,172M 3,000 $2,683M $2,423M $2,212M 2,000 NF Co. 1,000 0 2004 2005 2006 2007 2008 2009E 2010E Source: Goldman Sachs, March 2009; Company documents 47
Slide 51: Separated assets viable as standalone companies
Separated assets viable as standalone companies 2008 revenue ($B) $15.0B $15B $13.4B 10 $5.3B 5 $4.6B $2.9B $2.3B $1.2B 0 Amgen Genentech Gilead Genzyme NF Co. Celgene CF Co. Sciences Equity value ($B) $51B $101B $43B $16B ? $18B ? 48
Slide 52: Overhead spending can be reduced
Overhead spending can be reduced Overhead assumptions • In 2008, Biogen Idec spent 23% of 2008 SG&A % sales on selling, general and of sales (%) administrative expenses - Median biotech company = 21% 30% - Best in class company = 15% 25 23% • Reducing overhead spending will 21% improve cash flows 20
Slide 53: We would push hard to reinvigorate R&D and improve productivity
We would push hard to reinvigorate R&D and improve productivity • Identify most promising products • Focus investment in key therapeutic areas • Rationalize pipeline products not part of overall strategy 50
Slide 54: Electing our directors could help maximize shareholder value
Electing our directors could help maximize shareholder value • Board and management have failed to achieve the full potential of Biogen Idec • Quality of board and management especially crucial today • Electing our directors could help maximize shareholder value Better management of Biogen Idec asse
Slide 55: We have shown that management has failed shareholders
* * We have shown that * management has failed * * shareholders * * strategically and * operationally, resulting * * in a company not well * * positioned for future * challenges! * 52
Slide 56: Exhibit II Participants
EXHIBIT II PARTICIPANTS The participants in the solicitation of proxies (the “Participants”) from stockholders of Biogen Idec Inc. (“Biogen” or the “Corporation”) include the following: Mr. Carl C. Icahn, Icahn Partners LP, a Delaware limited partnership (“Icahn Partners”), Icahn Partners Master Fun
Slide 57: Participants' interests and nominee agreement
None of Dr. Richard C. Mulligan, Dr. Thomas Deuel or Dr. David Sidransky own beneficially any interest in the securities of Biogen. Each of Dr. Richard C. Mulligan, Dr. Thomas Deuel and Dr. David Sidransky have an interest in the election of directors at the Biogen 2009 Annual Meeting of Stockholder