Biogen Idec On The Block

Another biotech company with antibody expertise is on the selling block. Biogen Idec said late last Friday that it is looking for suitors that could provide "a better value for its stockholders" than it is able to achieve as a stand-alone company.

Yet analysts believe the Cambridge, Mass.-based company is a risky asset. Biogen Idec's primary product, the multiple sclerosis treatment Avonex, has modest growth potential, which could be stunted if biogeneric versions make their way onto the market. The other two key drugs in its portfolio, the arthritis drug Rituxan and the multiple sclerosis treatment Tysabri, are tied up in comarketing deals with Genentech and Elan Pharmaceuticals, respectively. Furthermore, Biogen Idec's share of Rituxan profits is scheduled to shrink to 25% from the current 40%, if a follow-up drug being developed by the companies is approved.

On the upside, Biogen Idec may interest a pharma partner merely looking to strengthen its biologics capabilities. The company offers "one of the last opportunities to gain scale in both protein and antibody manufacturing," notes Morgan Stanley analyst Steven Harr. In addition, it boasts a sizable biologics pipeline and has the commercial infrastructure to sell those drugs.

Given the many variables at work, putting a price tag on the company is "an impossible task," says S. G. Cowen analyst Eric Schmidt.

Biogen Idec says it has already received "expressions of interest," including one from billionaire corporate raider Carl Icahn. But analysts doubt that a financial buyer like Icahn will win in the end, given the current challenging financing environment.

Biogen Idec joins a growing list of biotech companies with antibody expertise looking for a partner after pipeline challenges or product setbacks. ImClone has put itself on and off the block in the past year, while PDL BioPharma earlier this month announced it was for sale. This summer, AstraZeneca completed its $15.6 billion purchase of MedImmune.