Biogen News: Back to Reality

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Biogen News: Back to Reality

Postby NHE » Fri Dec 14, 2007 5:36 am

UPDATE: Biogen Shares Fall 28% After It Admits It Has No Buyers
December 13, 2007: 12:03 AM EST

Shares of Biogen Idec Inc. plunged as much as 28% in late trading Wednesday after the biotechnology giant said a search for potential buyers failed to turn up suitors.

Biogen's (BIIB) board of directors said Wednesday that it will continue to be an independent company after it did not receive "any definitive offers to purchase the company." The Cambridge, Mass.-based drugmaker said in October that it planned to solicit potential bidders as part of a strategic review intended to "maximize shareholder value."

"At the conclusion of this process, Biogen Idec did not receive any definitive offers," the company said in a statement. Biogen was represented by financial advisers Goldman Sachs & Co. and Merrill Lynch & Co.

At the time Biogen announced it was up for sale, it noted that activist investor Carl Icahn had also expressed interest in making a bid for the company. Icahn had been buying up shares of the drugmaker, best known for its multiple sclerosis drug Avonex, since last summer.

Wednesday's news crushed shares of Biogen in after-hours trading, with shares plunging to 28% to $54.80.

Biogen shares have been on an upswing since Icahn revealed he had purchased a stake in the company in August. The company's relatively high stock price has also been viewed as a significant hurdle to the negotiation of a takeover deal.

Although quite profitable, many industry watchers have also questioned in recent months Biogen's long-term growth prospects. Biogen's top line is heavily dependent on Avonex, which has been on the market for several years, and an oncology drug marketed with Genentech Inc. called Rituxan.

Biogen's chief competitors for its lead drug Avonex are the drug Rebif, which is marketed by German drugmaker Merck KGaA and Pfizer Inc. (PFE) Betaseron, which is marketed by Bayer AG; and Copaxone, which is sold by Israeli drugmaker Teva Pharmaceutical Industries Ltd. (TEVA) Of these competitors, only Pfizer, the world's largest drugmaker, had been mentioned as a leading bidder.

Biogen's shares took a severe hit in 2005 when it was forced to pull its latest MS drug Tysabri from the market over safety concerns. The drug, which was co-developed with Irish drugmaker Elan Corp. (ELN), was later returned to the market in the summer of 2006, but with tight prescribing restrictions.

In the days following the recall, Biogen's stock plunged from around $70 a share to the $35 range. Since Tysabri's reintroduction to the market, though, the shares have been rebounding.

Once hailed as a major breakthrough in the treatment of that debilitating disease, some analysts had predicted Tysabri could eventually have sales upwards of up to $6 billion. However, those numbers have since been revised downwards, due largely to the prescribing restrictions.

Still, Biogen has been hopeful about Tysabri's prospects. On Wednesday, the company reiterated that it sees having 100,000 patients on the drug by the end of 2010. Tysabri brought in total sales of $72 million for the second quarter, with Biogen's take being $48 million.

In October, analysts at Cowen & Co. said they see Tysabri taking in annual sales of around $1 billion by 2010.
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Re: Biogen News: Back to Reality

Postby HarryZ » Fri Dec 14, 2007 7:55 am

Big pharma operating at its very best!

Biogen announced they were up for sale and over the past few months, in anticipation of another drug company purchasing them, the stocks took off. But it was obvious that what perspective buyers saw, they didn't like and in the end, no firm offers were made. There were comments that top execs made more than a few dollars in stock options which usually happens in these situations.

The past few months also saw Biogen staff wondering who was going to buy them, guessing at whether they would still have a job and if not, how much of a package they would get. In the end, very disruptive to the work force.

It will be interesting to see what happens now that nobody wants to buy them.

Harry
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Re: Biogen News: Back to Reality

Postby NHE » Fri Dec 14, 2007 3:57 pm

HarryZ wrote:Biogen announced they were up for sale and over the past few months, in anticipation of another drug company purchasing them, the stocks took off. But it was obvious that what perspective buyers saw, they didn't like and in the end, no firm offers were made. There were comments that top execs made more than a few dollars in stock options which usually happens in these situations.

Biogen Idec Execs Accelerated Stock Sales
12/14/2007 6:11 AM EST

Biogen Idec (BIIB) executives with pre-arranged stock trading programs saw accelerated sales of their company stock options and other restricted shares within days of an Oct. 12 announcement that the biotech firm would seek a buyer, according to an independent report analyzing insider stock sales that was obtained by TheStreet.com.

Biogen Idec shares surged as high as $84.75 from $69 in the days following the disclosure that the company was putting itself up for sale.

Within that time period, six Biogen Idec executives sold just under 351,000 shares of stock, the largest block of insider selling at the company since May, according to 3DAdvisors, an independent equity-research firm that examines and analyzes insider sales activity.

The 3DAdvisors report does not specify the profit made by these executives, but if the 351,000 shares were sold at $80 a share, for example, the executives would have grossed $28 million.

All six Biogen Idec executives had so-called 10b5-1 stock-trading plans in place, which are planned stock sales agreements that specify in advance the number of shares an executive can sell, or the timing of those sales, on a regular basis.

The Securities and Exchange Commission allowed for the creation of 10b5-1 plans in 2000 so that executives could be protected against accusations of selling stock based on confidential, or inside, information.

More recently, academic studies have shown that executives who sell stock through pre-arranged plans do better than those who do not. And allegations of abuse and manipulation of 10b5-1 plans by companies and their executives have prompted the SEC to re-examine the issue and consider tightening the rules.

Biogen Idec executives have not been accused of any wrongdoing in connection to their 10b5-1 plans. Biogen Idec spokeswoman Naomi Aoki says insider sales following the Oct. 12 announcement were likely triggered because the stock hit a prearranged price target.

Preplanned or not, the stock sales by Biogen Idec executives were well timed, because on Dec. 12, the company announced that it was remaining independent after failing to draw bidders for the company. The news sent Biogen Idec shares tumbling.

The 3DAdvisors report finds that this was not the first time that Biogen Idec executives with prearranged stock-sale plans have managed to sell shares after a rally in the stock.
      · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · ·
* Mark Wiggins, executive vice president, corporate and business development; on Oct. 15, Wiggins sold 90,000 shares, his largest sale of Biogen Idec stock since he became a registered insider in 2004. In all of 2007, Wiggins sold 99% of his Biogen stock available for sale under his trading plans.

* Hans Peter Hasler, executive vice president, global neurology; Hassler sold 11,000 shares under a trading plan in the first half of the year, but then he unloaded 174,000 shares, or 96% of his available holdings, between July 25 and Oct. 15. Hasler sold 108,750 shares, his largest block of stock, on Oct. 15, the day Biogen Idec shares soared following the announcement it was seeking a buyer for the company.

* Burt Adelman, executive vice president, portfolio strategy; Adelman sold 60,500 shares at $82 on Oct. 15.

* Lynn Schenk, director; on Oct. 15, Schenk sold 63,000 Biogen Idec shares, accounting for 61% of her holdings. This was only the second sale of Biogen Idec stock in the past 10 years. Her ownership is now at its lowest level since 1999.
      · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · ·

Looking at Biogen Idec's insider sales activity, the 3DAdvisor report concluded, "We have not found 10b5-1 trade timing with stronger correlation to news-related rallies since the inception of the rule in 2000. Given this, the notion that these 10b5-1 trades are simply routine selling for diversification needs should be considered highly suspect."


There's more of the story at the link above...
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Postby gwa » Fri Dec 14, 2007 4:13 pm

If these bigwigs don't buy back the stock, it may indicate that some of their products are starting to kill more people.

The large sales are very troubling and if I were on one of their drugs, I would be concerned.

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Re: Biogen News: Back to Reality

Postby HarryZ » Fri Dec 14, 2007 5:19 pm

Looking at Biogen Idec's insider sales activity, the 3DAdvisor report concluded, "We have not found 10b5-1 trade timing with stronger correlation to news-related rallies since the inception of the rule in 2000. Given this, the notion that these 10b5-1 trades are simply routine selling for diversification needs should be considered highly suspect."


And some people don't understand why I have never had a liking for this company and its execs!!

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