Biogen Idec Puts Itself On The Block

(RTTNews) - Biotechnology firm Biogen Idec Inc. (BIIB | charts | news | PowerRating) said Friday that its board of directors has authorized management to evaluate whether third parties would have an interest in buying the company at a price and on terms that would represent better value for its shareholders than having the company continue as a stand-alone entity.

The Cambridge, Massachusetts-based company revealed that it has received expressions of interest from potential buyers, including one from billionaire investor Carl Icahn who recently purchased a small stake in the company.

Of course, the company cautioned that there was no guarantee that a deal would materialize.

Biogen Idec, which has hired Goldman Sachs & Co. and Merrill Lynch & Co. as financial advisors to help in the evaluation process, said it would not disclose further information on the status of its evaluation until the process has been completed.

On the other hand, the company stressed that its current strategy is working and the board is confident that its business outlook will create attractive value for shareholders. On September 6, the company had reiterated its full year outlook and outlined its long term goal of generating revenue growth at a 15% compound annual growth rate and non-GAAP earnings per share at a 20% compound annual growth rate from 2007 through 2010.

Biogen Idec, formed as a result of the 2003 merger of Biogen Inc. and IDEC Pharmaceitical Corp., currently has a market capitalization of nearly $20 billion and has about 287.93 million shares outstanding, according to the latest quarterly report.

The company, which makes multiple sclerosis drugs Avonex, Tysabri and non-Hodgkin's lymphoma drug Rituxan, employs about 3,900 people worldwide.

For the full year 2006, the company reported GAAP net income of $218 million on revenue of $2.68 billion. For the first six months of the current fiscal year, the company reported net income of $317.6 million on revenue of $1.00 billion.

The company will reports its third quarter financial results on October 23.

Biogen Idec suffered a major setback in February 2005 when the company abruptly withdrew its newer multiple sclerosis drug Tysabri from the markets because of safety concerns. Tysabri had been seen as a potential blockbuster for Biogen Idec and Irish partner Elan Corp. before it was withdrawn after two clinical trial patients died of a rare brain disorder known as PML.

U.S. and European authorities approved Tysabri's reintroduction in June 2006, but with restrictions to monitor patients for symptoms of the brain disease.

Activist investor Icahn's interest in Biogen Idec was evident from the time when he revealed in a regulatory filing in mid-August that he had acquired 2.74 million shares of the company during the second quarter.

Icahn has made several recent investments in the biotechnology and pharmaceutical sectors, most notably in ImClone Systems Inc.(IMCL | charts | news | PowerRating) , where he was named chairman last fall after a protracted battle with the board. He has also acquired a small stake in Enzon Pharmaceuticals Inc. (ENZN | charts | news | PowerRating).

Biogen Idec shares closed Friday's regular trading session at a new 52-week high of $69.43, up $2.31 or 3.44% and gained an additional $11.97 or 17.24% in after hours trading.

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