Despite having a $14.50 per share bid rejected by the Facet Biotech board, Biogen Idec has begun a tender offer to acquire its development partner.
Relations between the two companies have worsened since August when Biogen had a $15 per share bid rejected. Facet then linked up with Trubion Pharmaceuticals to develop the latter’s TRU-016, which is in Phase I for chronic lymphocytic leukaemia.
The Trubion deal lowers the value of Facet, Biogen had claimed, and came in with the $14.50 bid which was also rejected by the board at the Redwood City, California-based company. The latter suggested that the lower offer “represents only the cash on our balance sheet and fails to attribute any value to daclizumab”, a late-stage multiple sclerosis drug being developed with Biogen, “or to the rest of our existing R&D pipeline and platform”.
However, launching the hostile offer, Biogen chief executive James Mullen insists that the acquisition would mean that the MS and “solid tumour clinical programmes that the companies have been working on in collaboration for nearly four years” have “the best chance of reaching the market”. In a letter to Facet’s chief executive Faheem Hasnain, he says the offer is fair give its partner’s cash burn rate of $8 million per month for the remainder of 2009 and the $30 million in cash spent as part of the Trubion collaboration, plus future development costs. Facet also has lease obligations of some $208 million.
Analysts expect further negotiations to take place between the two firms, leading to an offer higher than $14.50. For the timebeing, Facet has urged stockholders not to take any action in response to the offer, which expires on October 19, until the board states its position within the next fortnight.
