Times are tough, but activist investors are still finding some diamonds among the rough.

Both Carl Icahn and Eastbourne Capital have made five nominations to the board of directors of Amylin Pharmaceuticals (AMLN) in attempts to possibly sell the company to a larger biotechnology firm.

As of their latest filings, Carl Icahn owns approximately 8.3% of Amylin, and Eastbourne Capital owns approximately 12.5%.

San Diego-based Amylin Pharmaceuticals is the maker of the diabetes drug Byetta, with a joint 50-50 partnership with Eli Lilly (LLY), thus making Lilly the most likely candidate to buy Amylin.

According to the American Diabetes Association, a new diagnosis of diabetes occurs every 21 seconds, making diabetes is the fastest-growing disease in American, and the fifth-deadliest.

Byetta, which was launched and approved in 2005, is the first GLP-1, or glucagon-like peptide, drug designed to stimulate timely releases of insulin in diabetic patients when glucose levels become too high.

Since the drug was approved, Byetta sales went from just under $100 million dollars in 2005 to more than $650 million dollars in 2007, with investors still waiting on full-year 2008 data. However, recent concerns surrounding possible Byetta side effects, most notably the possible risk of pancreatitis, or inflammation of the pancreas, have sent shares of Amylin down 60% over the last several months.

According to Eastbourne Capital portfolio manager Rick Barry, “Amylin is at a critical juncture and if the Board does not take action, shareholders will be left to bear unacceptable risks." Barry said that if the board fails "to seek positive change on its own, we are committed to pursuing the election of our five highly qualified director nominees.”


In other activist news, Mill Road Capital sent a letter to R.G. Barry (DFZ) offering to purchase the company at a cash price of $7 to $7.75 per share, saying: “Despite R.G. Barry’s many strengths, we think that the public markets does not accord a high valuation to R.G. Barry because it is a small company in a very low growth market.”

And on Jan. 28, Carl Icahn announced his intention to nominate three board of directors to the board of Enzon Pharmaceuticals (ENZN).

That same day, Enzon issued a press release detailing how it supports and is now nominating Icahn’s three board candidates for election at the 2009 annual meeting.

This move by Enzon also comes on the heels of Della Camera Capital’s nonbinding stockholder proposal for consideration at Enzon’s 2009 annual shareholder meeting.

Della Camera is proposing that Enzon’s board of directors form a special committee consisting “exclusively of independent directors for the purpose of evaluating strategic and financial alternatives to enhance shareholder value.”

Posted on Feb. 3, 2009