-- Offers to Acquire All Outstanding Shares of Facet for $14.50 Per
Share in Cash --
CAMBRIDGE, Mass.--(BUSINESS WIRE)--Sep. 21, 2009--
Biogen Idec Inc. (NASDAQ:BIIB) announced today that FBC Acquisition
Corp., its wholly owned subsidiary, has commenced a tender offer to
acquire all of the outstanding shares of Facet Biotech Corporation
(NASDAQ:FACT) for $14.50 per share in cash, in furtherance of its
previously announced acquisition proposal. The tender offer is scheduled
to expire at 12:00 midnight, ET, on October 19, 2009, unless extended or
terminated.
The tender offer follows a written proposal made by Biogen Idec to Facet
Biotech’s Board of Directors on September 4, 2009 to acquire all of the
outstanding shares of Facet Biotech in a negotiated transaction. Biogen
Idec’s all-cash offer represented a premium of approximately 64% over
the $8.82 per share closing price of Facet Biotech’s common stock on
September 3, 2009, the last trading day before Biogen Idec publicly
announced its acquisition proposal. In light of the rejection of the
proposal by Facet Biotech’s Board of Directors on September 8, 2009 and
its refusal to discuss a business combination of the two companies on
the terms proposed, Biogen Idec has decided to present its offer
directly to Facet Biotech’s stockholders.
“We believe this proposed transaction makes compelling business sense
for both Facet Biotech and Biogen Idec and is in the best interests of
our respective stockholders,” said Biogen Idec’s President and Chief
Executive Officer James C. Mullen. “Our $14.50 per share, all-cash offer
ascribes meaningful and appropriate value to Facet Biotech and
represents an extremely attractive opportunity for Facet Biotech’s
shareholders to realize today the future value of their company. In
addition, we believe the transaction would enable the important multiple
sclerosis and solid tumor clinical programs that the companies have been
working on in collaboration for nearly four years to have the best
chance of reaching the market and improving patients’ lives.”
In commencing the tender offer, Biogen Idec today also sent a letter to
the Board of Directors of Facet Biotech addressing several statements in
Facet Biotech’s letter and press release of September 8, 2009 in which
it rejected Biogen Idec’s $14.50 per share, all-cash offer. Among other
things, Biogen Idec’s letter explains that, on the basis of Facet
Biotech’s own disclosures, Facet Biotech’s available cash is
considerably below the Biogen Idec offer price when the following
factors are included in the analysis: Facet Biotech’s cash burn rate of
$8 million per month for the remainder of 2009; the $30 million in cash
spent as part of the Trubion collaboration, as well as future
development costs and milestone payments under the terms of that
agreement; Facet Biotech’s total lease obligations of approximately $208
million on an undiscounted basis, as well as additional obligations of
nearly $19 million; and, inclusion of shares underlying Facet Biotech’s
outstanding options. Biogen Idec’s letter also points out, contrary to
Facet Biotech’s assertions, that because Facet Biotech’s net cash per
share is considerably below Biogen Idec’s offer price, the offer
ascribes meaningful value to daclizumab, which Biogen Idec is jointly
developing for the treatment of relapsing multiple sclerosis, additional
programs in its pipeline, its technology platform, related milestone
payments, and synergies. The letter sent today to Facet Biotech’s Board
of Directors follows below:
September 21, 2009
Facet Biotech Corporation
Board of Directors
c/o
Faheem Hasnain, President and Chief Executive Officer
1500
Seaport Boulevard
Redwood City, CA 94063
Dear Faheem:
Biogen Idec is today commencing a tender offer to acquire all of the
outstanding shares of Facet Biotech Corporation for $14.50 per share in
cash. As you know, we have repeatedly expressed our interest in
discussing with Facet Biotech’s Board of Directors and management team
the potential acquisition of Facet Biotech by Biogen Idec in a
negotiated transaction, but have been told that Facet Biotech has no
interest in discussing a potential transaction on the terms we proposed.
In light of the rejection of the proposal by Facet Biotech’s Board of
Directors on September 8, 2009, we are presenting our $14.50 per share,
all-cash offer directly to Facet Biotech’s stockholders.
In commencing this tender offer, we would like to address for the
record certain of the assertions you made through the September 8, 2009
letter and press release rejecting our offer, as well as in subsequent
communications to the investment community.
First, Facet Biotech has stated inaccurately that Biogen Idec’s
$14.50 per share proposal “represents only the cash on [Facet Biotech’s]
balance sheet and fails to attribute any value to daclizumab, or to the
rest of [Facet Biotech’s] R&D pipeline and platform.” Specifically,
Facet Biotech asserts that its cash balance as of June 30, 2009
represents a per share cash value of approximately $15.11. In
fact, Facet Biotech’s available cash is considerably below our offer
price of $14.50 per share when the following factors are accounted for:
-
In public statements, Facet Biotech has estimated that it will use
approximately $80 million in cash in 2009 and indicated that about $32
million had already been spent through June 30, 2009. This implies
that the monthly cash usage is about $8 million for the rest of 2009.
Each month that passes is another month in which Facet Biotech’s cash
balance decreases.
-
Facet Biotech also recently spent $30 million in cash as part of
its Trubion collaboration, in addition to committing to funding future
development costs and milestone payments, which it has since confirmed
are not included in its estimated $80 million per year cash
expenditure rate. This new collaboration obligation represents a
significant cash burden to Facet Biotech.
-
Facet Biotech also has significant lease and other obligations. As
you recently disclosed, Facet Biotech has total lease obligations on
an undiscounted basis of approximately $208 million. Facet Biotech’s
most recent Quarterly Report discloses additional obligations totaling
over $12 million related to manufacturing, post retirement benefits,
and other obligations.
-
Facet Biotech has referred to its cash per share using shares
outstanding as of July 31, 2009, but this overstates the amount
because it does not reflect the shares underlying outstanding options.
When these factors are included in the per share cash analysis, the
available cash is significantly below the reported June 30, 2009 balance.
Second, Facet Biotech claims that Biogen Idec’s proposal does not
reflect the value of daclizumab, additional programs in its pipeline,
its technology platform, related milestone payments, and synergies. However,
the fact that Facet Biotech’s net cash per share is considerably below
our offer price means that Biogen Idec’s proposal does ascribe
meaningful value for these operating assets. Further, Biogen
Idec’s $14.50 offer represents a 64% premium over the $8.82 per share
closing price of Facet Biotech on September 3, 2009.
Third, Facet Biotech suggests that “the significance of the [interim
futility analysis regarding daclizumab] has not been fully appreciated
by the investment community.” In fact, Facet Biotech’s stock
price increased approximately 13% on the day following the announcement
regarding the interim futility analysis and 27% from that day to the day
prior to the announcement of the Trubion collaboration, evidencing a
significant appreciation for the futility analysis findings in the
market.
Fourth, Facet Biotech suggests that it only entered into the Trubion
collaboration “after concluding that it was a positive for [Facet’s]
stockholders and was likely to be a positive synergistic opportunity for
Biogen Idec as well.” We believe that our view that the Trubion
collaboration is value destructive has been corroborated by the fact
that Facet Biotech’s stock price dropped 22% in the five trading days
following the announcement of the Trubion collaboration and prior to
Biogen Idec’s proposal.
Finally, Facet Biotech has disclosed that it expects its cash balance
to be completely depleted by the end of 2012, despite the fact that the
company will have significant remaining obligations and the need to
continue funding its clinical programs, including importantly, the
clinical programs in which it is partnered with Biogen Idec.
Biogen Idec’s proposal represents an extremely attractive opportunity
for Facet Biotech’s shareholders to receive today the future value of
the company. We continue to urge you to engage in discussions
with us so that we may reach a definitive merger agreement.
Sincerely,
/s/ James C. Mullen
President and Chief Executive Officer
Biogen Idec’s tender offer is not subject to any financing condition or
approval by Biogen Idec stockholders. The offer is conditioned upon
Facet Biotech’s stockholders having validly tendered and not properly
withdrawn prior to the expiration of the offer a number of shares
representing, together with the shares owned by Biogen Idec, at least a
majority of the total voting power of all of the outstanding shares of
Facet Biotech entitled to vote generally in the election of directors or
with respect to a merger, calculated on a fully diluted basis, among
other conditions. The complete terms and conditions of the tender offer
are described in the Offer to Purchase and related Letter of Transmittal
that Biogen Idec will file today with the U.S. Securities and Exchange
Commission (SEC). Facet Biotech stockholders may obtain copies of these
documents free of charge at the SEC’s website (www.sec.gov)
or by directing a request to Innisfree M&A Incorporated, the Information
Agent for the offer at (877) 800-5186.
Biogen Idec has engaged Leerink Swann LLC as financial advisor and
Wachtell, Lipton, Rosen & Katz as legal counsel in connection with the
proposed transaction.
About Biogen Idec
Biogen Idec creates new standards of care in therapeutic areas with high
unmet medical needs. Biogen Idec is a global leader in the discovery,
development, manufacturing, and commercialization of innovative
therapies. Patients in more than 90 countries benefit from Biogen Idec's
significant products that address diseases such as lymphoma, multiple
sclerosis, and rheumatoid arthritis. For product labeling, press
releases and additional information about the company, please visit www.biogenidec.com.
Statement on Cautionary Factors
Any statements made in this press release that are not statements of
historical fact, including statements about Biogen Idec’s beliefs and
expectations, including Biogen Idec’s proposed acquisition of Facet, are
forward-looking statements and should be evaluated as such.
Forward-looking statements include statements that may relate to our
plans, objectives, strategies, goals, future events, future revenues or
performance, and other information that is not historical information.
These forward-looking statements may be identified by words such as
"anticipate," "expect," "suggest," "plan," "believe," "intend,"
"estimate," "target," "project," "could," "should," "may," "will,"
"would," "continue," "forecast," and other similar expressions.
Although Biogen Idec believes that these forward-looking statements and
projections are based on reasonable assumptions at the time they are
made, you should be aware that many factors could cause actual results
or events to differ materially from those expressed in the
forward-looking statements and projections. Factors that may materially
affect such forward-looking statements include: Biogen Idec’s ability to
successfully complete the tender offer for Facet shares or realize the
anticipated benefits of the transaction; delays in obtaining any
approvals required for the transaction, or an inability to obtain them
on the terms proposed or on the anticipated schedule; the failure of any
of the conditions to Biogen Idec’s tender offer to be satisfied; and
other factors described generally in Biogen Idec’s periodic reports
filed with the Securities and Exchange Commission. Forward-looking
statements, like all statements in this press release, speak only as of
the date of this press release (unless another date is indicated).
Unless required by law, we do not undertake any obligation to publicly
update any forward-looking statements, whether as a result of new
information, future events, or otherwise.
Important Additional Information
The information in this press release is provided for informational
purposes only and is neither an offer to purchase nor a solicitation of
an offer to sell any securities of Facet. The description of the tender
offer contained in this press release is not intended to be a full or
detailed description of the terms or conditions of the tender offer.
Facet stockholders are urged to read the disclosure documents that will
be filed later today with the SEC, including the tender offer statement,
regarding the tender offer because they will contain important
information. Stockholders may obtain the disclosure documents (when they
are available), and any other documents relating to the tender offer
that are filed with the SEC, at no charge at the SEC’s website at www.sec.gov
or by directing a request to Innisfree M&A Incorporated, the information
agent for the tender offer.
Source: Biogen Idec Inc.
For More Information:
Biogen Idec Media:
Jennifer
Neiman, 617-914-6524
Senior Manager, Public Affairs
or
Biogen
Idec Investor Relations:
Eric Hoffman, 617-679-2812
Director,
Investor Relations
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