Biogen Idec Announces It Will Remain Independent—Says No “Definitive Offers” Received, Not Even From Icahn. Shares Plummet

12/12/07Follow @bbuderi

UPDATED: 12/12/07, 4:50 p.m. and 5:40 p.m.—Was it just five or six hours ago that I advised readers not to pay too much attention to the gathering storm of rumors that Biogen Idec was about to be sold? Did I predict that nothing would happen with efforts to sell the company before the New Year? Well, I got the “no sale” part right. The company’s board of directors has just announced that it has completed a review of potential suitors and decided to remain independent. “Biogen Idec did not receive any definitive offers to purchase the Company,” the firm said in a statement late this afternoon.

In the end, even Carl Icahn, who reportedly made an initial offer for the firm, declined to participate, according to a Biogen Idec spokesperson. Although Biogen (NASDAQ: BIIB) closed today up slightly at $75.88, Biogen’s announcement sent the stock skidding in after-market trading. As of 5:19 p.m., the stock had fallen nearly $21 per share (nearly 30 percent), to $54.90.

The pioneering Cambridge biotechnology company, formed in 1978 by Nobel Laureates Phillip Sharp of MIT (an Xconomist) and Walter Gilbert of Harvard, among others, has been under a cloud of uncertainty since mid-August. That’s when activist investor Carl Icahn revealed in SEC filings for the second quarter that his group had purchased some 2.74 million Biogen shares, or roughly a 1 percent stake worth approximately $160 million. Later that month, Icahn was given approval by U.S. antitrust authorities to buy additional shares in the company, a move that helped drive up Biogen’s stock to a one-year high. And on October 12, acknowledging pressure from Icahn, Biogen announced it would field offers to buy the company.

That announcement pushed Biogen’s stock past $80 per share, but the share price has since slipped to as low as $67.53 on November 27—even as Icahn upped his stake to 3 percent (8.8 million shares) and the list of potential bidders grew to include the likes of Pfizer, Johnson & Johnson, and Merck.

In its October 12 announcement, Biogen reported that it had received several “expressions of interest,” including one from Icahn. That same day, however, Icahn “indicated he would not be pursuing that expression of interest,” says Biogen Idec director of public affairs Naomi Aoki. “Later he was given another opportunity to participate in the process and he declined,” she added.

According to the announcement, which was issued at around 4:15 this afternoon:

“The Board emphasized that Biogen Idec’s business strategy is working and generating strong operating and financial performance. The Board noted that it is confident that continued execution of the Company’s business plan will result in attractive value for stockholders. As previously announced, Biogen Idec’s business plan is focused on achieving a series of goals by year-end 2010:

—100,000 patients on TYSABRI® (natalizumab);
—More than 40% of the Company’s revenue coming from its International business;
—Four new products and/or existing products launched in new indications;
—Six programs in late-stage clinical development; and,
—Generating revenue growth at a 15% compound annual growth rate (CAGR) and non-GAAP EPS at a 20% CAGR from 2007 through 2010.”

Bob is Xconomy's founder and editor in chief. You can e-mail him at bbuderi@xconomy.com, call him at 617.500.5926. Follow @bbuderi

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