CAMBRIDGE, Mass.--(BUSINESS WIRE)--Oct. 16, 2009--
Biogen Idec Inc. (NASDAQ:BIIB) announced today that it has extended the
tender offer by its wholly owned subsidiary, FBC Acquisition Corp., to
purchase all of the outstanding shares of Facet Biotech Corporation
(NASDAQ: FACT) to 12:00 midnight New York City time on December 16,
2009, unless otherwise extended. The tender offer was previously set to
expire at 12:00 midnight New York City time on October 19, 2009.
“Our offer price remains unchanged at $14.50 per share in cash, which is
a substantial premium to where Facet Biotech’s stock was trading prior
to our offer,” said Biogen Idec’s President and Chief Executive Officer
James C. Mullen. “We continue to believe our offer reflects a full and
fair price and provides Facet Biotech stockholders the opportunity to
realize the value today of Facet’s development stage pipeline. Biogen
Idec views the acquisition of Facet as desirable but not a ‘must have’.
We already own a 50% interest in daclizumab, the drug Biogen Idec is
jointly developing with Facet Biotech for the treatment of relapsing
multiple sclerosis. We do not intend to overpay for the rest.”
In extending its tender offer, Biogen Idec today also sent an open
letter to the stockholders of Facet Biotech, the full text of which
appears below:
October 16, 2009
Dear Facet Biotech Stockholder:
Biogen Idec announced today that it has extended the tender offer by
its wholly owned subsidiary, FBC Acquisition Corp., to purchase all of
the outstanding shares of Facet Biotech Corporation to 12:00 midnight
New York City time on December 16, 2009. Our offer price remains
unchanged at $14.50 in cash, which represents a 64% premium to Facet’s
closing price on September 3, 2009, the day before we announced our
proposal to acquire all of the outstanding shares of Facet common stock.
We continue to believe our offer reflects a full and fair price and
provides Facet stockholders the opportunity to realize today the value
of Facet’s risk-adjusted pipeline, potential milestone payments,
technology platform, and synergies. Biogen Idec views the
acquisition of Facet as desirable but not a “must have.” We
already own a 50% interest in daclizumab, the drug Biogen Idec is
jointly developing with Facet for the treatment of relapsing multiple
sclerosis (MS). We do not intend to overpay for the rest. If
Facet stockholders choose not to accept our offer, they will bear 50% of
the risks associated with the development of daclizumab, 100% of the
risks associated with Facet’s interest in other development stage drugs
and will own a company with a declining cash position. We discuss
these risks in further detail below.
Potential of Daclizumab
In Facet’s letter to stockholders dated October 1, 2009, Facet makes
a number of claims regarding the potential of daclizumab. Facet’s
discussion focuses solely on the positive aspects of our joint decision
to advance daclizumab to a Phase 3 trial. While Biogen Idec
clearly sees value in daclizumab and is hopeful that it will be a
successful drug which reaches the market and improves patients’ lives,
there remain significant risks to its development, among them:
-
To date, Facet and Biogen Idec have only the results of the Phase 2
CHOICE trial against a background of beta interferon therapy – there
is no placebo-controlled data.
-
Based on an independent review, we believe that the Phase 2 SELECT
trial is not futile; nevertheless, the SELECT trial remains blinded
and we do not expect to see data from it until 2011.
-
FDA approval will require an additional Phase 3 trial with
significantly more patients and longer treatment exposure than the
earlier trials. Phase 3 MS trials typically take 18-24 months to
enroll patients and then require a two year treatment period, which
would mean that data from the Phase 3 trial would not be available
until 2014.
-
Daclizumab’s commercial prospects are predicated on yet unknown
clinical results and a highly dynamic and competitive commercial
landscape.
-
The cost of clinical development to be completed before daclizumab
could reach the market is significant and beyond the financial
capability of Facet to fund from its current cash position.
Valuing Facet’s Pipeline
Facet also indicates in its letter to stockholders that the other
products in its pipeline have “considerable value.” In fact,
Facet’s other pipeline products are at early stages of development with
significant clinical and regulatory risk and long development timelines
requiring significant funding. In addition, in the conversation
between Jim Mullen and Faheem Hasnain on August 17, Biogen Idec offered
to purchase Facet’s rights to daclizumab outright. Facet’s
unwillingness to even entertain such an offer suggests that Facet may
not be as confident in the other products in its pipeline as it has
otherwise indicated.
Facet’s Cash Burn and Significant Lease Obligations
Facet’s letter to stockholders understates the value of Biogen Idec’s
offer by referencing Facet’s historical cash balance with no
consideration of Facet’s cash “burn” rate and liabilities. In
fact, Facet’s net cash balance per share on a fully diluted basis is
considerably below our offer price of $14.50 per share. Among
other items we have publicly discussed in the past, Facet continues to
fail to highlight its monthly cash “burn” rate of approximately $8
million through 2009 (exclusive of the costs related to the Trubion
collaboration) and its total undiscounted lease obligations of
approximately $208 million.
In its letter to stockholders, Facet states that it is optimistic
that a “significant reduction” of its lease obligations “can be achieved
through one or more subleases over time.” Based on our
understanding of the current leasing market in California, we are not as
confident that Facet will be able to achieve such reductions. The
fact is that Facet has been trying to sublease a portion of its property
since prior to its spin-off from PDL BioPharma on December 18, 2008 and
has already recognized a $23 million lease restructuring liability
charge representing the present value of the lease costs that Facet
expects to pay even if a sublease tenant is found. It is
important to note this charge relates to only a portion of Facet’s
leased facilities.
Additionally, Facet acknowledges in its letter to stockholders that
its cash balance is not sufficient to fund operations beyond 2012, well
before the completion of the daclizumab clinical program. With no
consistent revenue source, or the potential for one in the near-term,
Facet’s current inability to fund its own business through the
development of daclizumab poses a significant risk to Facet stockholders.
Timing of Biogen Idec’s Offer
In its letter to stockholders, Facet characterizes the date of Biogen
Idec’s offer as “opportunistically timed to acquire value not reflected
in Facet’s stock price.” Our offer was first extended after the
public announcement of the decision to advance daclizumab into a Phase 3
trial. Facet’s stock reflected this positive news in the 27%
increase in the stock price between August 3, 2009 and August 27, 2009.
It was only after the announcement of the Trubion collaboration that
Facet’s stock price fell 22%, negating nearly the entire price
appreciation that followed the announcement of the decision to proceed
with planning for a daclizumab Phase 3 trial.
Valuing the Collaboration with Trubion
Facet continues to claim that Biogen Idec should ascribe positive
value to the Facet-Trubion collaboration. Biogen Idec was
generally aware of the Trubion opportunity prior to Facet’s announcement
of the collaboration and chose not to pursue it because we believe that:
-
There is not a large market for new drugs treating chronic
lymphocytic leukemia (CLL); the current market is significantly
fragmented.
-
Other products which Biogen Idec is developing, alone or with its
partners, may be closer to commercialization than Trubion’s TRU-016.
In short, we believe Facet’s Trubion collaboration does not enhance
value – either to Biogen Idec if we acquire Facet, or to Facet
stockholders if Facet remains a standalone company.
Our Offer Fully Values Synergies and NOLs
Finally, our offer fully incorporates the value of potential
synergies and net operating losses available as the result of a
combination of the two companies as well as change of control and
severance liabilities, which Facet recently significantly increased and
which reduce the synergy and net operating loss value contribution.
As we have stated before, we continue to believe that our $14.50 per
share offer represents a full and fair price.
Sincerely,
James C. Mullen
President and Chief Executive Officer
Approximately 28,336 shares of Facet Biotech stock have been tendered as
of 5:00 p.m. New York City time on October 15, 2009.
The complete terms and conditions of the tender offer are described in
the Offer to Purchase and related Letter of Transmittal that Biogen Idec
has filed 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.
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
This announcement is neither an offer to purchase nor a solicitation of
an offer to sell securities of Facet Biotech. The offer to purchase or
solicitation of offers to sell is being made pursuant to a Tender Offer
Statement on Schedule TO (including the Offer to Purchase, Letter of
Transmittal and other related offer documents) filed by Biogen Idec and
FBC Acquisition Corp. with the SEC on September 21, 2009. Before making
any decision with respect to the tender offer, stockholders are advised
to read these documents, as they may be amended or supplemented from
time to time, and any other documents relating to the tender offer that
are filed with the SEC carefully and in their entirety because they
contain important information, including the terms and conditions of the
offer. These documents may be obtained free of charge at the SEC Web
site (www.sec.gov)
or by directing a request to Innisfree M&A Incorporated, the Information
Agent for the offer at (877) 800-5186.
No assurance can be given that the proposed transaction described in
this press release will be successfully completed, or completed on the
terms proposed or any particular schedule, that the proposed transaction
will not incur delays in obtaining any approvals required for a
transaction or that we will realize the anticipated benefits of any
proposed transaction.
Any statements made in this press release that are not statements of
historical fact, including statements about our beliefs and
expectations, including the proposed acquisition of Facet, are
forward-looking statements within the meaning of the federal securities
laws 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 we believe 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: our ability to
successfully complete any proposed transaction or realize the
anticipated benefits of a 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; and other factors
described generally in Biogen Idec’s periodic reports filed with the
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.
Source: Biogen Idec Inc.
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
View printer-friendly version
