Daniel Loeb, manger of Third Point, is one of Amgen‘s largest shareholders, and is telling it to split up the company into one that focuses on legacy drugs and another segment that places emphasis on the pipeline, according to DealPipeline. Loeb wasn’t the first one to have this idea; Analyst Geoffrey Porges of Sanford Bernstein suggested it, but Loeb has a significant share of the company and can make some noise about the proposed breakup. He believes the spin-off will remedy some complaints on Wall Street about Amgen, namely, that it wasn’t focusing enough on research and development, had flat operating margins and was delaying a buyback so it could pay $9 billion for Onyx. In addition, Loeb doesn’t think Wall Street sufficiently appreciates the potential of some of its innovative drugs, such as evolocumab, its treatment for dyslipidemia.
Loeb expects the shareholders to discuss the option of splitting up at a meeting on October 28. Loeb said CEO Bob Bradway has been open minded about the possibility for a spin-off.
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Amgen isn’t the only company Loeb wants to put through a divorce proceeding. As a shareholder if eBay, he was happy to see it split off Paypal. Loeb means business when it comes to throwing his activist weight around; he sold his shares of Sony, even though the company showed improvement, because management refused to follow his advice and spin off 15-20% of its American entertainment business. He has also tried to persuade Dow Chemical to separate its petrochemical business from its regular chemicals.
