Top 10 Holdings:
Company | Ticker | Value ($000s) | Activity |
ICAHN ENTERPRISES L P | IEP | 4,008,551 | 17% |
FEDERAL MOGUL CORP | FDML | 1,314,590 | 0% |
MOTOROLA MOBILITY HOLDINGS INC | MMI | 1,020,240 | -14% |
FOREST LABS INC | FRX | 914,487 | 0% |
AMYLIN PHARMACEUTICALS INC | AMLN | 358,973 | New |
C V R ENERGY | CVI | 336,628 | 229% |
HAIN CELESTIAL GROUP INC | HAIN | 312,390 | 0% |
NAVISTAR INTERNATIONAL CORP | NAV | 293,320 | 0% |
AMERICAN RAILCAR INDUSTRIES INC | ARII | 278,568 | 0% |
MENTOR GRAPHICS CORP | MENT | 239,547 | 0% |
Icahn’s major new addition to the portfolio is Amylin Pharmaceuticals (NASDAQ:AMLN), which is currently fielding takeover bids by big pharma companies like Bristol-Squibb Myers (NYSE:BMY), AstraZeneca (NYSE:AZN), Sanofi (SNY) and Merck (NYSE:MRK). BMY, MRK, SAN and AZN in particular are looking to add ALMN’s commercial diabetes drugs to their drug portfolios to gain solid footing in the diabetes markets. Depending on how high the bidding goes, it may be a cheap or expensive way for the ultimate buyer to get that footprint. The lure of AMLN is Bydureon, its approved type 2 diabetes drug. The global diabetes market is an extremely attractive one with a forecasted CAGR of 7% through 2017. AMLN also has Byetta in its product portfolio, which is also a drug for type 2 diabetes that has been commercially successful. Our view is that AstraZeneca is the most in need of a more robust pipeline and will stick around in the bidding process. In April, AZN announced a $1.3 billion acquisition of Ardea Biosciences and this is an extension of the company trying to find quick revenue replacements for Seroquel, Nexium, and Crestor expiries. BMY trades at 17.8x forward earnings, MRK at 10.4x, SAN at 8.6x, and AZN at 6.7x.Healthcare-focused hedge funds Visium Asset Management and Healthcor Management also had bullish positions in AMLN at the end of March.
Icahn also added to existing CVR Energy (CVI) holdings, a petroleum refiner of transportation fuels and producer of nitrogen fertilizer. Icahn and his various affiliates control 80% of outstanding shares of CVI. The remaining 20 prevents Icahn from completing a short form merger, so for now CVI will continue to trade publicly. We would take gains and exit. Carl Icahn recently initiated a 50.1 million share, 7.6% stake in Chesapeake Energy (NYSE:CHK). The company is experiencing funding problems and recently agreed to sell its pipeline assets for $4 billion to Global Infrastructure Partners (GIP). Chesapeake’s fundamental problem is its leverage and low natural gas prices. This is a very risky bet at this moment.