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Biogen Idec chief takes counterjab at Icahn

There were no bids for firm, Mullen says

Email|Print| Text size + By Todd Wallack
Globe Staff / February 7, 2008

Biogen Idec Inc. chief executive Jim Mullen fired back at billionaire investor Carl Icahn yesterday, dismissing Ichan's complaints that the company didn't do enough to find a buyer last year as "Monday morning quarterbacking."

For the second time in a month, Mullen said Biogen Idec did a thorough review to see if any major drug companies were interested in making a serious bid to buy the Cambridge biotech last year but didn't find any serious suitors. And Mullen said the company has no interest in repeating the process.

"Despite the Monday morning quarterbacking going on," he said in a conference call with analysts, "the basic fact remains that no company has put a bid on the table."

Though Mullen didn't specifically invoke Icahn's name, his comments came just a week after Icahn publicly blasted last year's efforts as "flawed." Icahn, who owns more than 4 percent of Biogen Idec's stock, last month nominated three people to sit on the company's board, as part of his continuing efforts to pressure it to find a buyer. On Friday, Icahn told CNBC that he continues to believe Biogen Idec should be sold to a major pharmaceuticals company.

"I think a lot of these biotechs have to merge with Big Pharma," he said on the cable television network. "This [Biogen Idec] is one of them"

Mullen said Biogen Idec didn't draw any solid offers because of worries about its multiple sclerosis drug, Tysabri, not because of problems with the sale process. Biogen Idec temporarily pulled the promising drug off the market in 2005 after it was linked to a rare brain disease. Tysabri was reintroduced in 2006 with stricter guidance on how to use it to minimize safety problems.

"I think it's clear that for those few major pharmas who could afford acquisition of our size, the perceived risk profile of Tysabri at this time is simply too great," he said.

Mullen said the company would be open to considering takeover offers, but he said it needs to "get back" to running its business. "I don't think the right way to run the business, for anyone's sake, is to have a permanent 'for sale' sign out on the front lawn," he said.

In addition, Mullen dismissed reports that Biogen Idec is on the verge of making a major acquisition. He suggested the company could dip into its nearly $2 billion in savings to buy a smaller company, but isn't interested in taking on debt or issuing stock to make a bigger deal.

"There aren't big targets out there that are both interesting and attractive in valuation," he said.

Last week, Icahn vowed to use any means possible to block Biogen Idec from making a "toxic" acquisition that could complicate a sale of the company.

Specifically, Icahn cited media reports that Biogen Idec was interested in buying Genmab A/S, a Danish biotech company worth close to $3 billion.

Also, Biogen Idec yesterday reported better-than-expected fourth-quarter earnings of $201 million, up 85 percent from the same period a year ago. Excluding one-time items, Biogen Idec earned 89 cents a share, better than the 80 cents a share Wall Street analysts predicted.

Revenue rose 26 percent to $893 million, beating analysts' predictions of $836 million. Company shares were unchanged yesterdayat $60.52.

In addition to Tysabri, Biogen Idec has two other major drugs - another MS treatment called Avonex, and Rituxan, a treatment for non-Hodgkins lymphoma and rheumatoid arthritis.

Todd Wallack can be reached at twallack@globe.com.

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