Biogen's not for sale, sources say--but if it were, who could afford it?


The industry is abuzz with a potential Biogen ($BIIB) takeover from buyout-inclined Allergan ($AGN) or Merck & Co. ($MRK). But Biogen’s not necessarily into the idea.

The Massachusetts biotech isn’t soliciting offers, sources tell Reuters--and any interest it has received hasn’t been formal. Other drugmakers have approached individual Biogen directors in the past, but none of them has submitted concrete proposals for the board’s consideration.

One reason? Biogen’s got a portfolio of neurology drugs that it values highly, including a Phase III Alzheimer's candidate that targets beta amyloid--meaning it would expect a hefty premium, the news service reports.

And Leerink Partners analyst Geoffrey Porges agrees. He expects the company--which boasts a market cap of $70.4 billion--to go for somewhere in the $380- to $405-per-share range, which would value the company at between $83 billion and $88 billion.

Credit Suisse’s Vamil Divan, for one, just doesn’t see Allergan shelling out that kind of money--even with the $40.5 billion in cash it nabbed from Teva ($TEVA) in exchange for its generics unit, a deal that closed this week.

“With the cash that they will be receiving following today’s close of the sale of their generics business to Teva, we have expected Allergan to repurchase shares, pay down its debt and pursue smaller 'stepping stone' deals that would improve their top and bottom line growth outlook and boost their pipeline, without needing to take on significantly more debt,” Divan wrote in a note to clients.

And the way he sees it, Merck isn’t trying to make that big a splash in the M&A market, either. “Our sense from recent management commentary is that they are more focused on smaller acquisitions,” he wrote.

Of course, that doesn’t mean there aren't any takers willing to pony up for Biogen. Porges, for one, sees Gilead Sciences ($GILD), Pfizer ($PFE) and Novartis ($NVS) as other possibilities, noting that the latter two drugmakers “need to muscle their way into the amyloid antibody category for strategic or tactical reasons.”

- get more from Reuters

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