(Reuters) - Forest Laboratories Inc (FRX.N) won its showdown with activist investor Carl Icahn on Thursday, saying shareholders backed the company's slate of 10 board members over nominees proposed by the billionaire.

Forest was in a strong position to garner support for its entire 10-member slate after it won backing last week from influential proxy advisory firm ISS, although some company watchers had said Icahn could secure a seat for one of his four nominees.

Shortly after the annual meeting began in New York, Icahn nominee Alexander Denner congratulated Forest for winning the board vote, based on preliminary results. Forest then confirmed that the early tally showed its board had been elected.

Shares of Forest were down 3.2 percent at $33.34 in morning trading.

Icahn has built up the second-largest stake in Forest, according to Thomson Reuters data. He has criticized the company's governance practices and preparation for patent expirations for its biggest medicines.

Forest's slate included three new board members nominated after Icahn announced his challenge. Two longtime directors did not stand for reelection.

The Forest board sweep represents a new victory for Chairman and Chief Executive Officer Howard Solomon, who has led the company since 1977. Earlier this month, the U.S. government dropped plans to bar Solomon from doing business with federal healthcare programs, weakening a key plank in Icahn's argument for change.

ISS and another proxy advisor, Egan-Jones, backed Forest's entire slate. Glass Lewis recommended Icahn nominee Richard Mulligan, a Harvard Medical School genetics professor who sits on the boards of biotech companies Biogen Idec Inc (BIIB.O) and Enzon Pharmaceuticals Inc (ENZN.O).

Icahn said last week that he had increased his stake to 9.2 percent from about 7 percent when he revealed his board challenge in June. He ranks second behind Wellington Management, which has a 12.5 percent stake, according to data compiled by Thomson Reuters.

Even with the proxy fight behind it, Forest still faces challenges. Analysts expect revenue at the New York-based company to drop by about one-fourth after its Lexapro antidepressant loses patent protection early next year. Its Namenda Alzheimer's drug is set to lose patent protection in 2015.

Forest has a market value of about $10 billion. Its shares are worth less than half of what they were at their height in 2004 and about 40 percent less than peak 2007 levels.

(Reporting by Lewis Krauskopf; Editing by Michele Gershberg and Lisa Von Ahn)

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