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Abbott Takes On Facet

Big pharma firm wins bid for a promising pipeline of multiple sclerosis, oncology drugs

by Lisa M. Jarvis
March 15, 2010 | A version of this story appeared in Volume 88, Issue 11

Abbott Laboratories has beat out Biogen Idec in the bid for Facet Biotech, a Cambridge, Mass.-based antibody development firm with a multiple sclerosis (MS) drug, daclizumab, about to enter Phase III studies. Abbott will pay $27.00 per share, valuing Facet at $450 million after taking into account its cash holdings of $272 million.

Biogen and Facet have a partnership to develop daclizumab, which Biogen clearly wanted to bring into its fold. It had been gunning for Facet since August, when it made an unsolicited offer to buy the biotech firm for $15.00 per share. When Facet rebuffed the bid as undervaluing the company, Biogen came back with an even lower offer that, unsurprisingly, was also rejected.

In December, Biogen upped its bid to $17.50 per share and tried to convince shareholders to offer their shares for sale. Facet fended off the attack by allowing the Baupost Group, a Boston-based investment firm, to increase its holdings from 15% to 20% on the condition that the group refuse Biogen’s offer.

Along with daclizumab, Abbott will get three cancer drugs in early-phase studies for its burgeoning oncology portfolio.

“We were surprised that Abbott, a company that is less established in the MS/neurology space, decided to take out Facet,” BMO Capital Markets stock analyst Jason Zhang wrote in a note to investors. “Clearly, Abbott also saw significant value in Facet’s oncology pipeline … and technology platform.”

Michael King, an analyst with Merriman, Curhan, Ford, says the deal “makes tremendous sense for Abbott,” because daclizumab will fit nicely into its immunology portfolio. Furthermore, “Facet brings an antibody-engineering capability that is difficult to come by in this industry.”


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