WASHINGTON (dpa-AFX) - Forest Laboratories Inc. (FRX) said Monday it has hired search firm Spencer Stuart to help find a replacement for its CEO Howard Solomon, who has vowed not to interfere with the succession plan.
The drug maker also urged shareholders to favor all of its ten board nominees and reject four names proposed by activist investor Carl Icahn, who owns a 9.92 percent stake in the company.
Elaborating on its CEO succession plan, Forest said the process is being led by independent directors and that both internal and external candidates may be considered for the top position.
Meanwhile, CEO Solomon, in a communique to to shareholders earlier today, urged them to reject Board nominees put forth by Icahn, stating they lacked the expertise to steer the company.
Solomon assured that the company is on the path to sound performance and also elaborated on its broad pipeline of drugs.
Icahn is the second largest shareholder in Forest and has been seeking to get some sort of board control. He has been critical of the company for under-performance.
Icahn last August made a bid to instal some nominees to the Forest board, but faced an embarrassing defeat after shareholders rejected them.
One among Icahn's proposed nominees is Eric Ende, who served as president of Ende BioMedical Consulting Group and was a former biotechnology analyst at Merrill Lynch. Ende was among those nominees in Icahn's earlier bid to win seats to the Forest board.
Forest is set to hold its annual shareholders meet on August 15.
Icahn has been opposing the Forest board, holding it responsible for its lackluster performance on the stock exchange.
Forest in March lost patent protection for its anti-depressant drug Lexapro that accounted for sizable revenues. The company in early June cut its earnings outlook for fiscal 2013, citing unanticipated conditions in the Lexapro/escitalopram market.
Icahn also plans to probe the sale of over $500 million of stock at higher prices by Solomon over the past years, fearing that this may be due to the company losing its Lexapro patent and long term uncertainties.
Solomon has denied the charges, stating that he did sell Forest stock and options between 2003 and 2007, but most of the sales were at much lower prices. He said the sales of equity was partly to support charitable causes and termed Icahn's charges as baseless.
FRX closed Monday at $35.92, up $0.44 or 1.24%, on a volume of over 1.0 million shares on the NYSE.
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© 2012 AFX News
