Facet Rejects Biogen Again - Analyst Blog

Facet Biotech Corp. (FACT) once again rejected Biogen Idec Inc.’s (BIIB) intention to acquire all the outstanding shares of Facet common stock stating that the revised offer is inadequate and not in the best interests of Facet Biotech’s stockholders.

Earlier this month, Biogen had come back with a revised offer of $17.50 per share (up from the previous offer of $14.50) and said that this is its “best and final” offer. The offer represents a 21% premium over the previous offer and a premium of approximately 98% over the closing price of Facet’s common stock on September 3, 2009, the day before Biogen announced its proposal to acquire all the outstanding shares of Facet. The offer is scheduled to expire at 12:00 midnight, New York City time, on Dec 16, 2009.

As a reminder, Biogen launched a hostile bid in September to acquire Facet by taking its offer directly to Facet’s shareholders. Biogen had initially approached Facet with an offer of $15 per share on August 17, 2009. However, Facet did not accept the offer as the company doubted its benefit for its shareholders. Soon thereafter, Facet entered into collaboration with Trubion Pharmaceuticals (TRBN), a move that was criticized by Biogen.

According to Biogen, the Trubion deal led to a reduction in Facet’s value with the company’s stock price reducing by 22% since the announcement of the deal. Based on Facet’s reduced value, Biogen came back with a reduced offer price of $14.50 per share.

Biogen and Facet have been working together since 2005 on the development of daclizumab for the treatment of relapsing multiple sclerosis and volociximab (M200) aimed at solid tumors. Besides these two candidates, Facet has three other candidates in its pipeline, one of which is being developed in collaboration with Bristol-Myers Squibb (BMY).

The acquisition of Facet would help Biogen boost its pipeline. Moreover, the company would not be required to make any milestone payments related to the development of daclizumab and volociximab. Under the terms of the collaborative agreement, Biogen is required to make certain development and commercialization milestone payments upon the achievement of certain program objectives totaling up to $660 million over the life of the agreement.

The proposed acquisition of Facet is the second major deal announced by Biogen in 2009. Earlier this year, the company signed a licensing deal with Acorda Therapeutics (ACOR) for a multiple sclerosis candidate.