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Amylin In North Dakota? You Betcha

Monday, 2 Feb 2009 | 1:37 PM ET
Amylin
CNBC.com
Amylin

Diabetes drugmaker Amylin Pharmaceuticals is headquartered in San Diego. Like a lot of companies, though, it's incorporated in Delaware. But, if a couple of major shareholders get their way, AMLN could reincorporate in an unlikely state.

Try North Dakota. Yep, as in Fargo.

David Kliff, who writes "The Diabetic Investor," over the weekend called my attention to a quirky little nugget ina new SEC filing. Activist investors Carl Icahn and another big fund with a large stake in AMLN not only want to put a bunch of their own people on the Board of Directors, but they want the company to pick up legal stakes from Delaware and move them to the Northern Plains.

In a note to his subscribers, Kliff wrote, "It appears Eastbourne (the other investment fund) and Icahn are joining forces with the ultimate goal being the sale of the company. This is further reinforced by the request that the company reincorporate in North Dakota."

Why North Dakota, you ask? Late last year Icahn blogged about what he sees as the shareholder benefits of incorporating in ND.

Last year Icahn tried and failed to get his people of the board of Biogen Idec , but he suceeded several years ago in getting control of ImClone Systems which was recently sold to Eli Lilly . If he and Eastbourne can carry the day at Amylin, Lazard Capital Markets analyst Matthew Osbourne, in a research note to clients, says, "Unlike some companies that have a staggered board of directors (meaning that only a few members are voted for reelection each year), all of Amylin's 12-member board are voted on each year. An ability to elect at least five new members could swiftly change the direction of the company." LCM makes a market in AMLN.

Amylin shares have lost about two-thirds of their value over the past year. Investors are concerned about a looming change to the label by the FDA on the diabetes drug Byetta over reports of rare cases of pancreatitis, what that possibly means to the fate and timeline of a once-a-week version of Byetta that's in late-stage development and the potential competition soon from a one-a-day drug out of Novo Nordisk . In addition, the Street was disappointed when Amylin didn't give Byetta sales guidance for this year on its recent earnings conference call. All of that may explain why the newly disclosed strategic maneuvering by Icahn and Eastbourne isn't doing much to move the stock.

Questions? Comments? Pharma@cnbc.com

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