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 by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[X] Soliciting Material Pursuant to ss. 240.14a-12
Biogen Idec Inc.
(Name of Registrant as Specified In Its Charter)
Carl C. Icahn
Alexander J. Denner
Richard C. Mulligan
Thomas F. Deuel
David Sidransky
Mayu Sris
Eric Ende
Jeffrey Meckler
Icahn Partners LP
Icahn Partners Master Fund LP
Icahn Partners Master Fund II LP
Icahn Partners Master Fund III LP
High River Limited Partnership
Barberry Corp.
Hopper Investments LLC
Icahn Offshore LP
Icahn Onshore LP
Icahn Capital LP
IPH GP LLC
Icahn Enterprises Holdings L.P.
Icahn Enterprises G.P. Inc.
Beckton Corp.
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rule 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
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 the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
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4) Date Filed:
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 PROXIES BY CARL C. ICAHN, ALEXANDER J. DENNER,
RICHARD C. MULLIGAN, THOMAS F. DEUEL, DAVID SIDRANSKY, MAYU SRIS, ERIC ENDE,
JEFFREY MECKLER, ICAHN PARTNERS LP, ICAHN PARTNERS MASTER FUND LP, ICAHN
PARTNERS MASTER FUND II LP, ICAHN PARTNERS MASTER FUND III LP, HIGH RIVER
LIMITED PARTNERSHIP, BARBERRY CORP. , HOPPER INVESTMENTS LLC, ICAHN OFFSHORE LP,
ICAHN ONSHORE LP, ICAHN CAPITAL LP, IPH GP LLC, ICAHN ENTERPRISES HOLDINGS L.P.
, ICAHN ENTERPRISES G.P. INC., BECKTON CORP. (COLLECTIVELY, THE "PARTICIPANTS")
AND CERTAIN OF THEIR RESPECTIVE AFFILIATES FROM THE STOCKHOLDERS OF BIOGEN IDEC
INC. FOR USE AT ITS ANNUAL MEETING WHEN AND IF THEY BECOME AVAILABLE, BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION, INCLUDING INFORMATION RELATING TO THE
PARTICIPANTS IN ANY SUCH PROXY SOLICITATION. WHEN AND IF COMPLETED, A DEFINITIVE
PROXY STATEMENT AND A FORM OF PROXY WILL BE AVAILABLE TO STOCKHOLDERS OF BIOGEN
IDEC INC. FROM THE PARTICIPANTS AT NO CHARGE AND WILL ALSO BE AVAILABLE AT NO
CHARGE AT THE SECURITIES AND EXCHANGE COMMISSION'S WEBSITE AT
HTTP://WWW.SEC.GOV. INFORMATION RELATING TO THE PARTICIPANTS IN A POTENTIAL
PROXY SOLICITATION IS CONTAINED IN EXHIBIT II HERETO.
EXHIBIT I
PLEASE SEE ATTACHED EXHIBIT 19.
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 Fund LP, a Cayman Islands limited
partnership ("Icahn Master"), Icahn Partners Master Fund II LP, a Cayman Islands
limited partnership ("Icahn Master II"), Icahn Partners Master Fund III LP, a
Cayman Islands limited partnership ("Icahn Master III"), High River Limited
Partnership, a Delaware limited partnership ("High River"), Barberry Corp., a
Delaware corporation ("Barberry"), Hopper Investments LLC, a Delaware limited
liability company ("Hopper"), Beckton Corp., a Delaware corporation ("Beckton"),
Icahn Enterprises G.P. Inc., a Delaware corporation ("Icahn Enterprises GP"),
Icahn Enterprises Holdings L.P., a Delaware limited partnership ("Icahn
Enterprises Holdings"), IPH GP LLC, a Delaware limited liability company
("IPH"), Icahn Capital LP, a Delaware limited partnership ("Icahn Capital"),
Icahn Onshore LP, a Delaware limited partnership ("Icahn Onshore"), Icahn
Offshore LP, a Delaware limited partnership ("Icahn Offshore"), Dr. Alexander J.
Denner, Dr. Richard C. Mulligan, Dr. Thomas Deuel, Dr. David Sidransky, Mr. Mayu
Sris, Dr. Eric Ende and Mr. Jeffrey Meckler.
The address of Icahn Partners, High River, Barberry, Hopper, Icahn
Enterprises GP, Icahn Enterprises Holdings, Beckton, IPH, Icahn Capital, Icahn
Onshore and Icahn Offshore is White Plains Plaza, 445 Hamilton Avenue - Suite
1210, White Plains, NY 10601. The address of Icahn Master, Icahn Master II and
Icahn Master III is c/o Walkers SPV Limited, P.O. Box 908GT, 87 Mary Street,
George Town, Grand Cayman, Cayman Islands. Mr. Icahn's, Dr. Denner's, Mr. Sris',
Dr. Ende's and Mr. Meckler's business address is c/o Icahn Associates Corp., 767
Fifth Avenue, 47th Floor, New York, NY 10153. Dr. Mulligan's business address is
Harvard Gene Therapy Initiative, Harvard Institutes of Medicine, Suite 407, 4
Blackfan Circle, Boston, MA 02115. Dr. Deuel's business address is The Scripps
Research Institute, MEM 268, 10550 North Torrey Pines Road, La Jolla, CA 92037.
Dr. Sidransky's business address is Johns Hopkins University - Cancer Research
Building II, 1550 Orleans Street, Suite 503, Baltimore, MD 21231.
Icahn Partners, Icahn Master, Icahn Master II, Icahn Master III and High
River (collectively, the "Icahn Parties") are entities controlled by Mr. Icahn.
Dr. Denner and Mr. Sris. are employees and/or officers and directors of the
Icahn Parties and various other entities controlled by Mr. Icahn who may also
participate in soliciting proxies from Biogen Stockholders. Dr. Ende and Mr.
Meckler are consultants hired by the Icahn Parties. Dr. Denner, Mr. Sris, Dr.
Ende and Mr. Meckler do not own beneficially any interest in securities of
Biogen. Neither Dr. Denner nor Mr. Sris will receive any special compensation in
connection with the solicitation of proxies. In connection with his employment
by Mr. Icahn and his affiliated companies, Dr. Denner, among other employees,
has a participatory interest in the profits and fees derived by Mr. Icahn and/or
his affiliated entities from Icahn Partners, Icahn Master, Icahn Master II and
Icahn Master III (collectively, the "Funds"). Because only a portion of such
profit interests are distributed and because of their other investments in the
Funds, Dr. Denner also has capital accounts in the Funds. Generally, in the
aggregate, Dr. Denner's profit interests and capital accounts in the Funds
entitle him to less than 2% of the profits generated by the Funds. Dr. Ende and
Mr. Meckler are independent consultants retained by the Icahn Parties to solicit
proxies and provide consulting services relating to this solicitation, and
another solicitation of proxies by the Icahn Parties, as well as general
consulting services relating to other investments by the Icahn Parties. Assuming
the Annual Meeting of Biogen and the annual meeting relating to the other
solicitation are each held in May and further assuming each contest is
successful, the consulting agreements referenced herein may provide for payments
to Dr. Ende and Mr. Meckler of up to approximately $325,000 in the aggregate.
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 Stockholders pursuant
to a Nominee Agreement among each of Dr. Richard C. Mulligan, Dr. Thomas Deuel
and Dr. David Sidransky and the Icahn Parties, pursuant to which the Icahn
Parties have agreed to pay each of Dr. Richard C. Mulligan, Dr. Thomas Deuel and
Dr. David Sidransky a fee of $25,000.
Barberry is the sole member of Hopper, which is the general partner of High
River. Beckton is the sole stockholder of Icahn Enterprises GP, which is the
general partner of Icahn Holdings. Icahn Holdings is the sole member of IPH,
which is the general partner of Icahn Capital. Icahn Capital is the general
partner of each of Icahn Onshore LP and Icahn Offshore. Icahn Onshore is the
general partner of Icahn Partners. Icahn Offshore is the general partner of each
of Icahn Master, Icahn Master II and Icahn Master III. Each of Barberry and
Beckton is 100 percent owned by Carl C. Icahn. As such, Mr. Icahn is in a
position indirectly to determine the investment and voting decisions made by
each of the Icahn Parties.
As of 5:00 p.m. Eastern Standard Time on May 11, 2009, the Icahn Parties
may be deemed to beneficially own, in the aggregate, 16,075,256 shares of common
stock, par value $.0005 per share, issued by Biogen (the "Shares"), representing
approximately 5.57% of the Corporation's outstanding Shares (based upon the
288,541,467 Shares stated to be outstanding as of April 6, 2009 by the
Corporation in the Corporation's Proxy Statement filed with the Securities and
Exchange Commission on April 27, 2009).
High River has sole voting power and sole dispositive power with regard to
3,215,051 Shares. Each of Hopper, Barberry and Mr. Icahn has shared voting power
and shared dispositive power with regard to such Shares. Icahn Partners has sole
voting power and sole dispositive power with regard to 4,532,847 Shares. Each of
Icahn Onshore, Icahn Capital, IPH, Icahn Enterprises Holdings, Icahn Enterprises
GP, Beckton and Mr. Icahn has shared voting power and shared dispositive power
with regard to such Shares. Icahn Master has sole voting power and sole
dispositive power with regard to 5,888,807 Shares. Each of Icahn Offshore, Icahn
Capital, IPH, Icahn Enterprises Holdings, Icahn Enterprises GP, Beckton and Mr.
Icahn has shared voting power and shared dispositive power with regard to such
Shares. Icahn Master II has sole voting power and sole dispositive power with
regard to 1,761,077 Shares. Each of Icahn Offshore, Icahn Capital, IPH, Icahn
Enterprises Holdings, Icahn Enterprises GP, Beckton and Mr. Icahn has shared
voting power and shared dispositive power with regard to such Shares. Icahn
Master III has sole voting power and sole dispositive power with regard to
677,474 Shares. Each of Icahn Offshore, Icahn Capital, IPH, Icahn Enterprises
Holdings, Icahn Enterprises GP, Beckton and Mr. Icahn has shared voting power
and shared dispositive power with regard to such Shares.
Each of Hopper, Barberry and Mr. Icahn, by virtue of their relationships to
High River, are deemed to beneficially own the Shares which High River directly
beneficially owns. Each of Icahn Onshore, Icahn Capital, IPH, Icahn Enterprises
Holdings, Icahn Enterprises GP, Beckton and Mr. Icahn, by virtue of their
relationships to Icahn Partners, are deemed to beneficially own the Shares which
Icahn Partners directly beneficially owns. Each of Icahn Offshore, Icahn
Capital, IPH, Icahn Enterprises Holdings, Icahn Enterprises GP, Beckton and Mr.
Icahn, by virtue of their relationships to Icahn Master, Icahn Master II and
Icahn Master III, are deemed to beneficially own the Shares which Icahn Master,
Icahn Master II and Icahn Master III directly beneficially own.
EXHIBIT I
Biogen Idec
Investor Presentation
May 2009
2
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 not independently verified any such information.
We have not sought, nor have we received, permission from any third-party to include their information in
this presentation.
Many of the statements in this presentation reflect our subjective belief. Although we have reviewed and
analyzed the information that has informed our opinions, we do not guarantee the accuracy of any such
beliefs.
Sections of this presentation refer to the experience of our nominees for director at Biogen Idec Inc.
during their tenure as directors of ImClone Systems Inc. We believe their experience at ImClone was a
success and resulted in an increase in shareholder value that benefited all shareholders. However, their
success at ImClone is not necessarily indicative of future results at Biogen Idec if our nominees were to
be elected to the Biogen Idec Board of Directors.
All stockholders of Biogen Idec are advised to read the definitive proxy statement, the gold proxy card
and other documents related to the solicitation of proxies by the Participants from the stockholders of the
Company for use at the 2009 annual meeting of stockholders of the Company because they contain
important information. The definitive proxy statement and form of proxy along with other relevant
documents, are available at no charge on the SEC’s website at http://www.sec.gov or by contacting D.F.
King & Co., Inc. by telephone toll free at 1-800-769-4414 or by visiting their website at
http://www.dfking.com/BIIB. In addition, the Participants will provide copies of the definitive proxy
statement without charge upon request.
3
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
4
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
Promising pipeline (BG-12, Lixivaptan, ADENTRI, etc.) and biologics manufacturing facilities
Board and management have failed to achieve the full potential of Biogen Idec
Biogen – IDEC merger has not created much value
Management has failed shareholders strategically and operationally
Weak business development and research & development efforts inhibit company’s prospects
Quality of board and management especially crucial today
R&D organization needs to be reinvigorated; Strategic review of pipeline needs to be conducted
Cost structure needs to be examined and partner relations need to be revitalized
Product sales growth likely to slow
Board needs to evaluate possibility of separating assets in order to enhance value
Management not aligned with shareholder interests
Electing our directors could maximize shareholder value
Our slate will press hard for management accountability and will provide experienced oversight
Our nominees’ experience with ImClone Systems useful to Biogen Idec
Specifically, we recharged partner relations, optimized the cost structure and rebuilt the pipeline
Better management of Biogen Idec assets will
enhance value for all shareholders
5
We believe leadership has failed on many dimensions
6
Biogen and IDEC supposedly merged to accelerate
growth & create shareholder value
Source: Company documents
“Bringing our companies together accelerates both companies' strategic plans
and creates a biotechnology leader with the products, pipeline, infrastructure
and financial resources to grow faster and create sustainable shareholder
value beyond what either company could achieve separately.”
James Mullen, Chairman and CEO of Biogen
Strategy
Operational
Bus. Dev.
R&D
7
However, merger has failed to create much value
Note: Current price from April 2009; Change in equity value is growth from Q4 2003 to April 2009
Source: Bloomberg; Company documents
Biogen - IDEC
merger closed
Nov. 2003
Strategy
Operational
Bus. Dev.
R&D
8
Announced merger synergies never materialized
Note: 2003 operating expenses based on first nine months of 2003 annualized (pre-merger); $75M target synergies based on
$300M cumulative target for 2004-2007
Source: Company documents
Expenses
exceeded
target by
$276M
Strategy
Operational
Bus. Dev.
R&D
9
Management turnover makes consistent strategy and
execution difficult
Note: Bold & shading denotes
turnover since 2003
Source: Company documents
Lack of management continuity helps
contribute to lack of consistent strategy
Strategy
Operational
Bus. Dev.
R&D
10
We believe leadership has failed on many dimensions
Strategy
Operational
Bus. Dev.
R&D
11
AVONEX lost US market leadership to COPAXONE,
others also grew market share
Note: Data for US; Market share based on number of prescriptions
Source: Deutsche Bank
AVONEX lost 14% market share and ceded
US market leadership to COPAXONE
Strategy
Operational
Bus. Dev.
R&D
12
Biogen Idec has failed to manage Avonex product
lifecycle
Source: FDA; Company documents
?
Strategy
Operational
Bus. Dev.
R&D
13
AMEVIVE never lived up to management hype
Source: North Carolina Biotechnology Center, Feb. 2003; Company documents
After failing to achieve April 2003 projections,
management sold AMEVIVE for $60M in March 2006
Strategy
Operational
Bus. Dev.
R&D
14
TYSABRI goals also overly aggressive
Source: Reuters, Feb. 2009; Company documents
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
Strategy
Operational
Bus. Dev.
R&D
15
Five year stock performance has trailed peer group
Note: BTK represents AMEX Biotechnology Index
Source: Bloomberg; Company documents
Biogen Idec has underperformed peers
Strategy
Operational
Bus. Dev.
R&D
16
We believe leadership has failed on many dimensions
Strategy
Operational
Bus. Dev.
R&D
17
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 limits future growth prospects
Strategy
Operational
Bus. Dev.
R&D
18
Is Biogen Idec defending its MS franchise?
Source: InVivo Deals database
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
Merck Serono
Novartis
Merck Serono
Teva
Eli Lilly
Counterparty
Apitope Technology
Peptimmune
Bionomics AGM
Antisense Therapeutics
BioMS Medical
Strategy
Operational
Bus. Dev.
R&D
19
Is it defending the oncology franchise?
Source: InVivo Deals database
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
Bristol Myers
Roche
Pfizer
Merck
Sanofi Aventis
Counterparty
Exelixis
ThromboGenics
Aureon Laboratories
Celera
Dyax Corp.
Strategy
Operational
Bus. Dev.
R&D
20
Management has completed only five product in-
licensing deals in five years
Source: Company documents
Suboptimal licensing efforts over
last 5 years
Strategy
Operational
Bus. Dev.
R&D
21
We believe leadership has failed on many dimensions
Strategy
Operational
Bus. Dev.
R&D
22
Biogen Idec research and development productivity
worst in peer group
Note: 5 and 10 year charts represent cumulative gross profits and R&D spending
Source: Company documents
Strategy
Operational
Bus. Dev.
R&D
23
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
Strategy
Operational
Bus. Dev.
R&D
24
Failure to advance pipeline
Note: Bold & shading denotes
no apparent progress since 2006
Source: Company documents
Pipeline has made little progress
Strategy
Operational
Bus. Dev.
R&D
25
Biogen Idec is the only major biotech company with no
new drugs since 2004
Source: FDA
Strategy
Operational
Bus. Dev.
R&D
26
During that same period, 23 new oncology drugs have
been launched
Source: CenterWatch
Strategy
Operational
Bus. Dev.
R&D
27
Pipeline seems to lack strategic focus
Source: Company documents
Strategy
Operational
Bus. Dev.
R&D
28
PEGylation is hardly a breakthrough
Note: Enzon launched Adagen in 1990
Source: FDA
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
?
Strategy
Operational
Bus. Dev.
R&D
29
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
30
James Mullen sold ~$85M of stock since merger at
average price of ~$59 per share
Source: Company documents
*
Represents stock sales by James Mullen
31
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 to speak with Elan which may
have caused that bidder to walk away from the process
Board minutes that Biogen provided to us under court order last year show
what we consider to be a poorly designed process that lacked active Board
oversight
Same management and Board that ran the 2007 sales process
continue to run the company today. How would they treat a
bidder in 2009? Is shareholder value a priority for this Board?
32
Who is most aligned with your interests?
Source: Company documents
33
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
34
Our nominees helped deliver results at ImClone
35
ImClone shares dramatically outperformed during new
executive committee tenure
Note: Executive committee of Alex Denner and Richard Mulligan formed Oct. 2006; ImClone Systems sold to Eli Lilly in Nov.
2008
Source: Bloomberg
36
Long term focus to build ImClone shareholder value
Note: Graph represents month-end stock and index prices
Source: Bloomberg
Alex Denner
becomes
chairman of
executive
committee
ImClone receives
and rejects
takeover bid
ImClone acquired
by Eli Lilly for $70
per share
July 31, 2008
ImClone receives
$60 offer from
Bristol-Myers Squibb
Bristol-Myers
Squibb & ImClone
expand ERBITUX
development
37
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 cost structure
Rebuilt product pipeline
Changed culture
Settled litigation
38
Recharged ImClone partner relations and optimized
cost structure
Note: CRO’s = Contract Research Organizations
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 expanded Erbitux’s development with no change to ImClone economics
From 2005 to 2007, ERBITUX sales grew by 41% annually and ImClone royalty revenue
grew by 37% annually
Optimized cost structure
ImClone cost structure had not been appropriate for company needs
Executive committee reallocated costs, shifting SG&A spending by expanding sales force for
tactical reasons while reducing overhead costs
Margin expansion and capex reduction led to substantial free cash flow growth
Increased spending on R&D and salesforce was funded through savings on corporate costs
(re-negotiating with CROs, transportation costs, smarter purchasing, etc.)
39
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 candidates such as 1121B,
A12, 11F8 and others
Cancelled programs where the return on investment was poor
Pipeline cited as major strategic rationale for whole company acquisition
Changed culture
ImClone morale poor due to lack of strategic direction from prior management
Took steps to institute a new culture
Emphasis on cash flow
Investment in R&D
Gave responsibility to scientists and clinicians
Settled litigation
Settled litigation including Yeda, Abbott and Repligen
40
From 2005 to 2007, ImClone royalty revenue grew by
37% annually
Note: 2005 most recent full year prior to formation of new executive committee; 2007 most recent full year available; Collab.
reimb. represents collaborative agreement reimbursements; Manuf. represents manufacturing revenues
Source: UBS, January 2008; UBS, April 2008; Company documents
41
Tighter cost controls contributed to higher free cash
flow
Note: 2005 most recent full year prior to formation of new executive committee; 2007 most recent full year available; EBIT
excludes one-time charges; FCF represents free cash flow; Capex represents capital expenditures; FCF = EBITDA -
Capex
Source: Company documents
42
Increased R&D investment to improve pipeline and
future competitive position
Note: 2005 most recent full year prior to formation of new executive committee; 2007 most recent full year available
Source: Company documents
43
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
44
We believe ImClone and Biogen Idec situations
analogous
Electing our directors with directly relevant
experience could help Biogen Idec
45
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
46
Board should evaluate whether separating assets will
enhance value
NF Co. had $2,926M of 2008 sales
NF Co. assets include the following:
Key products include AVONEX and
TYSABRI
Related pipeline such as BG-12, Lixivaptan,
ADENTRI and other neurology and
cardiovascular product candidates
Biologics manufacturing plants in North
Carolina, Massachusetts and Denmark
Majority of existing research & development
infrastructure and sales force
Collaboration with Elan on TYSABRI
NF Co. will benefit from improved focus
on core neurology competency
Neurology-Focused Company
CF Co. had $1,172M of 2008 sales
CF Co. assets include the following:
Key products include RITUXAN and
FUMADERM
Related pipeline such as galixibam,
lumiliximab, ocrelizumab and other oncology
and autoimmune product candidates
Collaboration with Genentech in the US,
Zenyaku and Chugai in Japan and Roche in
the rest of the world
CF Co. will benefits from improved focus
on core oncology competency
Cancer-Focused Company
Separating Biogen assets will enhance shareholder value as
management focus should improve and disparate assets appeal to
different buyers
47
Separated assets have different growth profiles
Source: Goldman Sachs, March 2009; Company documents
48
Separated assets viable as standalone companies
49
Overhead spending can be reduced
Note: Peer group includes Genentech, Amgen, Gilead Sciences and Celgene
Source: Company documents
In 2008, Biogen Idec spent 23% of sales
on selling, general and administrative
expenses
Median biotech company = 21%
Best in class company = 15%
Reducing overhead spending will
improve cash flows
Applying median SG&A % of sales
generates $46M of cost savings
Applying best in class SG&A % of sales
generates $309M of cost savings
Overhead assumptions
50
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
51
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 assets will
enhance value for all shareholders
52
We have shown that
management has failed
shareholders
strategically and
operationally, resulting in
a company not well
positioned for future
challenges!