Facet Biotech confirms hostile bid from Biogen Idec

Facet Biotech Corp has confirmed that it is in receipt of fellow USA-based Biogen Idec's letter dated September 4, 2009 offering $14.50 per share for all of the outstanding shares of Facet, valuing the firm at around $356 million. Biogen and Facet have worked together in the development of potential treatments for multiple sclerosis and solid tumors since 2005. The companies have been jointly developing the drugs daclizumab for MS and volociximab for cancer.

The latter's shares shot up 75% to $15.75 after being halted briefly. So far this year, Facet's shares have traded as low as $6 and as high as $11, and the Biogen offer is a 64% premium to its previous day's closing price.

Last month, Facet announced a collaboration with another US firm, Trubion Pharmaceuticals, to develop the leukemia drug TRU-016, which Biogen believes reduces the value of Facet, as apparently do Facet's investors, as evidenced by the 22% reduction in the firm's stock price since announcing the Trubion collaboration."

Facet's board of directors, in consultation with its financial and legal advisors, previously rejected Biogen Idec's all-cash offer of $15 per share as not in the best interests of stockholders. Facet's board says it will respond promptly to Biogen Idec's more recent proposal and the company urges stockholders to await a further response from Facet before making any decisions.

Urging Facet to agree to its offer, Biogen chief executive, James Mullen,  said: "We believe this transaction will enable the important multiple sclerosis and solid tumor clinical programs that we have been working on in collaboration for nearly four years to have the best chance of reaching the market and improving patients' lives."

Meanwhile, the law firm of Wolf Haldenstein Adler Freeman & Herz has said it is investigating possible breaches of fiduciary duty by Facet's  board arising out of its rejection of proposals by Biogen to acquire the company at a huge premium.