Not surprisingly, the board at Facet Biotech have rejected Biogen Idec's hostile $14.50 per share takeover bid, saying it is “inadequate and not in the best interests” of its stockholders.

At the end of last week, Biogen made the offer, a couple of weeks after it had a $15 per share bid rejected. The higher offer had been made before Facet 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 claims, but this is a view that is not shared by the Redwood City, California-based company. Chief executive Faheem Hasnain said that the $14.50 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."

He added that “it does not appear to be a coincidence” that Biogen made its proposal “within weeks of our joint decision to begin a Phase III trial” of daclizumab and “at a time when the significance of this positive development has not been fully appreciated by the investment community”. Mr Hasnain said that Biogen's enthusiasm for daclizumab “is evident from the sizeable investment being made”, including a $30 million milestone due to Facet upon the enrollment of the first patient in the late-stage trial, which is expected in the first half of 2010.

In a letter to Biogen chief executive James Mullen, Mr Hasnain claimed that the offer values the firm at $371.1 million “and thus places no value on the operating and other assets of the company”. It also does not take into consideration five additional programmes (four clinical and one preclinical), its “protein engineering technologies or its scientific capabilities”.

Mr Hasnain concluded by saying that the proposal “does not reflect the value of the strategic fit…or the substantial synergies that Biogen, or any number of potential acquirers, could attain from an acquisition of Facet”. The board has also adopted a stockholder rights plan, with a one-year term, “to guard against a potential takeover” by Biogen “or any other entity without paying all stockholders full and fair value," he added.

However, Biogen has stood by its offer. Mullen said: “We continue to believe that Biogen Idec’s $14.50 per share, all-cash offer represents an extremely attractive opportunity for Facet’s shareholders to realise today the future value of their company. The price we are offering ascribes meaningful and appropriate value to the company’s clinical programs while taking into account Facet’s significant building lease and other obligations, and recently announced collaboration agreement with Trubion. As such, we were disappointed to learn that Facet’s Board of Directors rejected our proposal without discussing its merits with us and our advisors."

Mullen said the company was reviewing its options.