West Coast Editor

Biogen Idec Inc.'s confirmation of months-long buzz that the company is talking with potential buyers boosted the stock and started onlookers speculating about advantages, drawbacks and hurdles - as well as the timing of a potential deal, given worries that still linger over Tysabri, and given Biogen's possibly value-stimulating pipeline news in the year ahead.

Shares of the firm (NASDAQ:BIIB) closed Monday at $82.51, up $13.08, or 19 percent.

Among those sniffing around Cambridge, Mass.-based Biogen is billionaire Carl Icahn, who already owns a 1 percent stake. Reports surfaced Monday that Icahn has made a bid for the firm, but big pharma seems just as likely to take the company, if anyone does. Published reports said Icahn put $23 billion on the table, an 18 percent premium to Biogen's closing price last week.

"If it can happen with MedImmune, it can certainly happen with Biogen," said Christopher Raymond, analyst with Robert Baird & Co. in Chicago, referring to London-based AstraZeneca plc agreement this spring to pay a whopping $15.2 billion for MedImmune Inc., of Gaithersburg, Md., apparently after an intense bidding war. The price is a 21 percent premium to the firm's market value. (See BioWorld Today, April 24, 2007.)

"I don't see [Biogen] as a huge growth acquisition," Raymond said, adding that Icahn might have intended his move to push Biogen's worth higher and make the firm more tempting to a big pharma player. Earlier this month, an article in The Wall Street Journal explored the possibility of a buyout by New York-based Pfizer Inc.

"That's certainly top of mind," Raymond said. "Pfizer's already in the space, and it wouldn't be that big of a deal to offload the involvement" with Rebif, a formulation of interferon beta-1a sold by Geneva-based Merck Serono SA. Pfizer has a co-promotion deal in the U.S. for Rebif, which could stand in the way of a Biogen buyout.

Other possible Biogen suitors include Wyeth Pharmaceuticals, of Madison, N.J., which needs pipeline help after recent fizzles, including the Phase II non-nucleoside polymerase inhibitor HCV-796 for hepatitis C virus, partnered with Exton, Pa.-based ViroPharma Inc. (See BioWorld Today, Aug. 13, 2007.)

Stumbling blocks include clauses in contracts with marketing partners Genentech Inc., of South San Francisco, for the rheumatoid arthritis drug Rituxan (rituximab) and Dublin, Ireland-based Elan Corp. plc, for the troubled multiple sclerosis therapy Tysabri (natalizumab). Both have options to take over rights to their respective compounds if control of Biogen changes.

Elan probably would not exercise the option, since it lacks the wherewithal to market Tysabri in the U.S., but Genentech easily could take over Rituxan - a move that would put a dent in Biogen's appeal to a prospective buyer.

Biogen had separate news Monday related to Tysabri, reporting with Elan that the FDA will delay review of the compound in Crohn's disease (CD) by as long as three months, to mid-January of next year. The agency wants more time to review risk management for Tysabri. In July, an advisory panel voted 12-3 to approve the drug for CD. (See BioWorld Today, Aug. 2, 2007.)

The drug was pulled from the market in February 2005, months after gaining approval for MS, and ongoing trials in MS and CD were stopped after doctors diagnosed two patients with progressive multifocal leukoencephalopathy, a potentially fatal brain infection. Further analysis and review by the agency led to Tysabri's return to the market, with limited use in MS patients.

Biogen reported second-quarter revenues of $773 million and earnings of 70 cents per share, both beating analyst estimates. Most came from $462 million in sales of Avonex (interferon beta-1a) for MS, up 8 percent from last year, plus revenues of $231 million from Rituxan sales, up 12 percent, with both drugs' growth slowing in recent periods. Avonex faces challenges in the busy MS space from players that include Biogen's own Tysabri, which contributed about $48 million in revenues in the second quarter.

"What has kept me a little bit less than sanguine on the stock is that we've had some very aggressive long-term growth estimates for Tysabri [from Biogen], but those patients have to come from somewhere," Raymond told BioWorld Today - and they might come from Avonex's pool. Biogen has set a goal of 100,000 patients (compared to 17,000 currently) on Tysabri by 2010.

Meanwhile, beta-interferons as a class have faced pressure. More came Monday, when Cambridge, Mass.-based Genzyme Corp. reported top-line Phase II data from a three-year, 334-patient trial showing its leukemia drug Campath (alemtuzumab) beat Rebif in MS. The compound is partnered with Bayer AG, of Leverkusen, Germany. (See Clinic Roundup, page 8.)

Biogen, though, has more in its pipeline that could make the firm more tantalizing, including 15 programs that have reached or surpassed Phase II trials. Recently licensed from Philadelphia-based Cardiokine Inc. was lixivaptan, gained in a potential $220 million deal that had a $50 million up-front component. The oral vasopressin receptor antagonist is expected to enter Phase III trials this year for the electrolyte disorder hyponatremia in patients with congestive heart failure and other conditions. (See BioWorld Today, July 3, 2007.)