Please email ft@dealreporter.com or call:Europe: +44 (0)20 7059 6160 Americas: +1 212 686-3076 Asia-Pacific: +852 2158 9714 for further information on dealReporter and how to receive more articles like the one below.
--------------------------------------------------------------------------------------------------------
Biogen Idec’s sale books may not be out yet but people familiar with the situation speaking to dealReporter said they could expect the first round of bids due in the first 10 days of November.
Confidentiality agreements have been signed, noted people familiar with the situation, with parties readying themselves for a bidding process that could potentially end up being a two horse race between Pfizer and Novartis. Both companies have notably made public statements about their interest in improving their biologics offering.
Although one of the people commented that with books not yet sent out, advisors are finding it very difficult to appraise the situation and to put a value on indications of interest based on public information alone. “If we don’t know the color of the cat, it is difficult to buy something you don’t know,” this person said.
One source, who claimed direct access to Biogen’s management, however, said not to expect a quick sale process as was seen with MedImmune, which sold to AstraZeneca earlier this year. Talk of a definitive bidding date, he said, may still be premature.
Regardless, the first person noted that he has received some indications from possible parties and that everybody is preparing themselves to look at the situation. It is now down to Biogen’s management, which he commented needs to “press the button” in sending out books otherwise companies are not going to jump in without being comfortable with what is inside the portfolio.
Part of the hold up in the process, said the people, involves renegotiating terms with Elan over the co-marketing of the multiple sclerosis (MS) drug, Tysabri. One person said this will undoubtedly leave the Irish biopharmaceutical with a bigger slice of the pie. A second person said that currently Elan, who recently retained Lehman Brothers following Biogen’s sale announcement, does not have the resources to buy Tysabri. Nevertheless, this person described Elan as having the “king maker” role in deciding Biogen’s buyer.
The first person familiar noted that decisions pertaining to Tysabri and Rituxan, a drug targeting Non-Hodgkin’s Lymphoma which Biogen has a collaborative agreement with Genentech to market, would be crucial to determining the fate of buyers. “Those two products are quite key and I think it would be very difficult to do a deal without,” this person said.
An industry banker said in the extreme case that Elan requests to purchase its remaining stake in Tysabri and Genentech, with its remaining stake in Rituxan, there would be nothing critical left that Biogen could offer. He said that is why a Biogen acquisition is so complicated, as buyers will have to negotiate with one or both of the drug co-marketers before a deal can be announced.
An investor claiming knowledge of the situation commented that these “hindrances” will take time to work through. Both the banker and an Elan investor speculated that Genentech would likely not retain a bank to look at options for itself.
--------------------------------------------------------------------------------------------------------
This content is written, edited and published solely by dealReporter and is distributed by FT.com. All queries regarding the content should be directed to: cw@mergermarket.com
dealReporter is an independent intelligence service geared towards a client base of hedge funds, proprietary trading desks, security lending and institutional fund managers providing extensive coverage of all aspects of M&A, private equity, special situations and rumors across the European, pan-American and Asia-Pacific markets.
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
