Biogen Idec has upped its bid to acquire Facet Biotech Corp from $14.50 to $17.50 per share and is confident a takeover can now take place.

The increased offer, 21% higher than the previous one, comes after Facet’s board repeatedly spurned earlier bids, saying they under-valued its pipeline, including daclizumab, a late-stage multiple sclerosis drug being developed with Biogen. The US biotech major had a $15 per share bid rejected in August but 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 made the hostile $14.50 bid in September.

Now Biogen has made a “best and final” offer, which represents a premium on Facet’s closing share price of $8.82 on September 3, the day before the hostile offer was launched. Chief executive James Mullen says that “over the past three months we have had conversations with certain Facet stockholders which lead us to believe there is strong sentiment to bring this process to a conclusion”.

In a letter, Mr Mullen said that although Facet’s board rejected the earlier all-cash bid, its board “has not provided a superior alternative or a compelling argument for continuing to operate as a stand-alone enterprise”. He added that taking into account its monthly cash burn rate and “significant lease obligations, Facet does not have the cash to fund its operations beyond 2012, well before completion of the daclizumab clinical programme, without obtaining additional financing, which we believe will be dilutive”.

Biogen’s new offer expires at midnight New York City time on December 16, and Mr Mullen said “it will be the last opportunity” for stockholders to tender their shares and send the board “a message that should not be ignored”.

Facet’s directors responded by saying they will review Biogen’s new bid and recommended that shareholders “take no action at this time”.