dealReporter is an independent news and research service providing the financial services market with extensive coverage of all aspects of M&A, private equity, special situations and rumors across the European, pan-American and Asia-Pacific markets.
For further information on dealReporter and how to receive more articles like the one below please email ft@dealREPORTER.com or call:Europe: +44 (0)20 7059 6160 Americas: +1 212 686-3076 Asia-Pacific: +852 2158 9714
--------------------------------------------------------------------------------------------------------
First round bids for Biogen Idec are due next week, with a list of front-runners likely to include Pfizer, Merck and Johnson & Johnson among other large pharmaceutical buyers, people familiar with the process told dealReporter. One of the people familiar said he expects three or four bidders to move into the next round.
Another person following the situation said that UK-based AstraZeneca, which acquired Maryland-based biotechnology company, MedImmune for USD 15.6bn earlier this year could also show interest. Although market investors expressed doubt as to whether AstraZeneca would have the cash or shareholder support to make another large buy in the biotechnology sector. In its 3Q07 earnings, AstraZeneca reported that it had USD 3.4bn in cash on its books.
Still, some prospective buyers have already dropped out of the race to acquire Biogen, said the person following the situation. He explained that for what Biogen has to offer, and with a current market cap between USD 21bn to USD 22bn, this is considered expensive for that asset class. “All these assets are going for nose bleed prices,” said this person.
Biogen has three marketed products – Tysabri, a monotherapy for the treatment of patients with relapsing forms of multiple sclerosis (MS), which it shares partnership with Elan; Rituxan, a therapy that works by selectively targeting CD20+ B-Cells, shown to play an important role in non-hodgkins lymphoma and rheumatoid arthritis. Genentech shares a collaborative agreement with Biogen on Rituxan. Finally, Biogen’s third drug is Avonex, indicated to treat relapsing forms of MS, which the company does not have to profit-share with research partners.
It also has a pipeline of drugs still in clinical development, including two attractive late-stage MS drugs named daclizumab and BG-12.
The person following the process said he did not believe books would be released but that there would be a series of management meetings.
Some industry sources have suggested that the sales process was prompted by Pfizer, which is said to have initially made an offer for Biogen below USD 80 per share. This led to Carl Icahn making a counter USD 23bn proposal and forcing the company on 12 October to announce it had retained advisors, Goldman Sachs and Merrill Lynch to explore a sales process, said the sources. Carl Icahn did not return calls seeking comment. A Pfizer spokesperson was not immediately available for comment.
Biogen’s share price closed around USD 73.57 on Tuesday.
--------------------------------------------------------------------------------------------------------
dealReporter provides clients with articles such as the one above in real-time via personalized email and BlackBerry alerts and an online platform. For more information please email ft@dealREPORTER.com or call: Europe: +44 (0)20 7059 6160 Americas: +1 212 686-3076 Asia-Pacific: +852 2158 9714
