Biogen News: Back to Reality
Posted: Fri Dec 14, 2007 4:36 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.
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.