The Facet Biotech Buyout Saga (FACT, BIIB, ABT, PDLI)
Facet Biotech Corporation (NASDAQ: FACT) is a buyout saga that seemed as though it would never end in 2009. The company is now finally being acquired, but not by Biogen Idec (NASDAQ: BIIB). Abbott Laboratories (NYSE: ABT) announced last night that it entered into a definitive agreement for $27.00 per share in a cash buyout. The deal is valued at $722 million, but that includes about $272 million in cash and equivalents.
The net cost will be about $450 million. In late-2009, Facet turned down a second unsolicited offer from Biogen Idec of $17.50 a share after having rejected a lower offer before that.
Facet has discovery and development partnerships with Biogen Idec for MS, and it also has partnerships with PDL BioPharma (NASDAQ: PDLI) and Roche.
Facet shares are up 66% at $26.96 this morning after last night’s deal. Its prior 52-week trading range was $5.86 to $18.35.
JON C. OGG
More Biotech Buyout or M&A Targets (OSIP, VRTX, AUXL, ITMN, HGSI, CELG, DNDN, ENZN, FACT, PBE, XBI)
After today’s hostile Astellas offer for OSI Pharmaceuticals (NASDAQ: OSIP), we have investors and traders alike looking for ‘the next takeover target’ in biotech. Buy now you know that there are many pitfalls in simply looking for biotech stocks to buy because they will be taken over. We have taken a look through our own recent stocks noted as takeover candidates and even gone through some sites of our partners looking through potential takeover candidates in the space.
Morningstar just last week had a short video with some key potential buyout targets in the biotech space. It noted Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX), Auxilium Pharmaceuticals Inc. (NASDAQ: AUXL), and InterMune Inc. (NASDAQ: ITMN). Those are all names that have come up as takeout targets before.
But two that are on Morningstar’s list for buyouts are Human Genome Sciences Inc. (NASDAQ: HGSI) and Celgene Corporation (NASDAQ: CELG) for its REVLIMID franchise. The problem with Human Genome is that it is in the same boat we have addressed on multiple occasions: its size got away from the potential realm of buyers. And Celgene has just become too big at a $28 billion market cap for most potential buyers to consider it and the sales growth from $2.689 billion in 2009 is expected to go to $3.26 billion in 2010 and $3.75 billion in 2011 per Thomson Reuters estimates.
After looking around elsewhere, we went back to some Dendreon Corp. (NASDAQ: DNDN) rumors from last month we covered. This was based somewhat on options trading, and we think this company may have to wait for a suitor. Taking the risk of buying the company out before the FDA approves PROVENGE for advanced prostate cancer is something companies are seeming to shy away from.
Enzon Pharmaceuticals, Inc. (NASDAQ: ENZN) is another name that comes up routinely in the rumor mill. We noted this one hitting 52-week highs in January on fresh rumors.
Facet Biotech Corporation (NASDAQ: FACT) has also fought off attempts from Biogen Idec (NASDAQ: BIIB) as a new add-on for its MS franchise. Biogen has been rebuffed and it supposedly will not have an interest anymore.
ETF investors are chasing up names in the sector as well. PowerShares Dynamic Biotech & Genome (NYSE: PBE) is up 4% at $18.48 and the SPDR S&P Biotech (NYSE: XBI) is up 4.7% at $58.98.
Jon C. Ogg
Biogen Idec Has To Look Beyond Facet (FACT, BIIB)
Facet Biotech Corporation (NASDAQ: FACT) is outright rejecting the buyout offer from Biogen Idec Inc. (NASDAQ: BIIB). The company issued a press release stating that the stockholders rejected Biogen Idec’s unsolicited tender offer for $17.50 per share. Furthermore, it noted that Biogen Idec has terminated its tender offer after the company recently raised its offer as a “last and final offer.”
Facet management also called the Biogen Idec $17.50 offer as being “inadequate and did not fairly value our company and its prospects.” The company further noted that it will continue pursuing opportunities. Furthermore, it also noted that the company has requested that its financial advisor, Centerview Partners, solicit additional third parties that may have an interest in a transaction that our board would find in our stockholders’ best interests.
The company did note that it offers Biogen Idec the opportunity to conduct due diligence discussions to see if a materially increased offer could be made. Facet has a pipeline of five clinical-stage products and is seeking to identify and develop new oncology drugs and applying its proprietary protein engineering technologies to potentially improve the clinical performance of protein therapeutics. Its main targets are in oncology for cancers, which could have opened a new pipeline up for Biogen Idec. Facet’s market cap is $417 million, and Biogen noted that it was offering to pay $493 million for it when it raised its tender offer to $17.50 from $14.50.
Facet shares are finding the price down 2% at $16.00 in pre-market trading, and the 52-week trading range is $5.86 to $18.35. One problem Facet had was that it came public in late 2008 when the markets were in serious question. That is when it hit as high as $18.00, but shares were down under $10.00 in early September when Biogen Idec made its first offer.
Facet may want to hold out for money. It may get it, and it may not. As for Biogen Idec and its desire to buy a new drug pipeline that diversifies its dependence on MS drugs, it has already signaled that it is willing to pay almost $500 million for a company with very low revenues (Thomson Reuters estimate is $82+ million in revenues for all of 2010 for Facet).
JON C. OGG
Trubion Pharmaceuticals (TRBN) Up Over 60%
Trubion Pharmaceuticals (TRBN) is up 63% to $6.43, a 52-week high. The move may be a little much for the microcap.
The company and Facet Biotech (FACT) announced an agreement for the joint worldwide development and commercialization of TRU-016, a product candidate in phase 1 clinical development for chronic lymphocytic leukemia (CLL).
Not very substantial news for such a big run
Douglas A. McIntyre
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