Biogen Idec has raised its bid for Facet Biotech by $3 after claiming for three months that its original $14.5 per share proposal was the final one. The firm now says that the latest $17.50 per share price represents its best and final offer. The acquisition is valued at roughly $429.66 million.
While Biogen started by valuing Facet at a 64% premium over its closing price on September 3, the day before the original offer, the latest proposal has a 98% premium. Facet, however, has consistently traded above $14 per share since September 4, reaching a high of $17.84.
Facet has vehemently rejected Biogen’s takeover attempts calling them low-ball offers that were not in the best interest of its shareholders. The firm now says that it is reviewing Biogen’s $17.5 bid and has advised its stockholders to stay put until further notice.
A successful transaction would mean that Biogen would take on $176.5 million worth of Facet’s milestone obligations to Trubion Pharmaceuticals plus lease obligations. On the other hand, Biogen could also save up to $630 million in milestone fees that it owes Facet under their ongoing partnership to develop and commercialize daclizumab as a multiple sclerosis treatment. The first milestone of $30 million would be due early next year with the initiation of a Phase III study.
“Over the past three months we have had conversations with certain Facet stockholders which lead us to believe there is strong sentiment to bring this process to a conclusion,” said James C. Mullen, president and CEO, in a letter to Facet. “Taking into account its monthly cash burn rate and its significant lease obligations, Facet does not have the cash to fund its operations beyond 2012, well before completion of the daclizumab clinical program, without obtaining additional financing, which we believe will be dilutive. “We already own a 50% interest in daclizumab. We do not intend to overpay for the rest.”
Facet’s cash position as of September 30 was $331.9 million. This does not account for lease obligations held by the firm.
Biogen actually first offered to pay $15 per share for Facet on August 17, but asked the company not to enter any external deals. Facet outright snubbed Biogen’s offer and request, signing an agreement with Trubion with $20 million up front. Biogen then went public on September 4 with a $14.5 per share acquisition offer, saying that the arrangement with Trubion reduced Facet’s value; Facet signed on to develop Trubion’s Phase I lead candidate, TRU-016, in chronic lymphocytic leukemia.