Biotech firm Biogen Idec (BIIB) has put itself on the block, another victim of shareholder activist by Carl Icahn. The company said that several firms had expressed interest. According to The Wall Street Journal, “Shares of the Cambridge, Mass., company traded at $69.43, up 3.4%, in 4 p.m. Nasdaq Stock Market composite trading Friday and after the company’s announcement jumped to $81.60 in after-hours trading.”
Not a bad gain for a day. That puts the company’s market cap at over $23 billion
Mr. Icahn has suggested the best buy would me a mega-pharmaceutical company.
Biogen has forecast 2007 earnings of about $600 million. Analysts are predicting about $3.1 billion in revenue.
Biogen is growing fairly quickly, but selling biotech drugs can be a risky and competitive business. The FDA can halt trials and block sales at the drop of a hat.
The price tag, at over $82 a share, or about 8x, is, frankly, too rich. The credit environment makes the a deal even more dicey.
Mr. Icahn may want to make money, but, at these prices, a buyer won’t
Douglas A. McIntyre