Ahead of the Bell: Biogen Idec jumps

NEW YORK, Oct 15, 2007 (AP via COMTEX) -- BIIB | charts | news | PowerRating -- Shares of Biogen Idec Inc. surged in premarket electronic trading Monday, and were on pace to open at an all-time high after the company said it may sell itself and has attracted some interest from potential buyers.

The stock climbed $13.92, or 20.1 percent, to $83.35 premarket. Shares closed at a five-year high of $69.43 Friday.

After trading ended Friday, Biogen said its board of directors authorized management to explore a sale. Carl Icahn, among others, expressed interest in buying the Cambridge, Mass.-based company, the company said.

Analysts said Monday that a sale could happen, but issues including safety concerns about Biogen's multiple sclerosis drug Tysabri will keep the company from getting a large premium.

Jefferies & Co. analyst Adam Walsh kept a "Hold" rating on the stock, but raised his price target to $73 per share from $52. Walsh said growing competition for multiple sclerosis drugs and decreasing royalties from rheumatoid arthritis drug Rituxan reduce the company's value.

"While we do not see Biogen Idec as an ideal take-out candidate at this point, large-cap pharma's need to fill its pipeline and drive top and bottom-line growth will likely make a deal achievable, in our view," he said.

He said a fair price for Biogen would be $70 to $80 per share.

Walsh said a buyout in late 2008 would make more sense, as doctors will be able to see more data on Tysabri's safety.

Lehman Brothers analyst Jim Birchenough said the company could be bought for between $75 and $88 per share.

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