Although one of the people commented that with Biogen books not yet sent out, advisors are finding it very difficult to appraise the situation and to put a value on indications of interest based on public information alone. â€œIf we donâ€™t know the color of the cat, it is difficult to buy something you donâ€™t know,â€ one wag told the paper. Another source who claimed direct access to Biogenâ€™s management, however, said not to expect a quick sale process as was seen with MedImmune, which was sold to AstraZeneca earlier this year. Talk of a definitive bidding date, he says, may still be premature.
Regardless, the first source tells the FT that he has received some indications from possible parties and that everybody is preparing themselves to take a look. But Biogenâ€™s management needs to â€œpress the buttonâ€ and send out the books, otherwise companies aren't going to jump in without being comfortable with what is inside the portfolio.
Part of the hold up in the process, said the people, involves renegotiating terms with Elan over the co-marketing of the Tysabri multiple sclerosis drug. One source tells the paper this will undoubtedly leave the Irish biopharmaceutical with a bigger slice of the pie. A second person said that currently Elan, who recently retained Lehman Brothers following Biogenâ€™s sale announcement, doesn't have the resources to buy Tysabri. Nevertheless, this person described Elan as having the â€œking makerâ€ role in deciding Biogenâ€™s buyer.
The first person familiar noted that decisions pertaining to Tysabri and Rituxan, a drug targeting Non-Hodgkinâ€™s Lymphoma which Biogen has a collaborative agreement with Genentech to market, would be crucial to determining the fate of buyers. â€œThose two products are quite key and I think it would be very difficult to do a deal without,â€ this person said.
An industry banker said in the extreme case that Elan requests to purchase its remaining stake in Tysabri and Genentech, with its remaining stake in Rituxan, there would be nothing critical left that Biogen could offer. He said that is why a Biogen acquisition is so complicated, as buyers will have to negotiate with one or both of the drug co-marketers before a deal can be announced.
An investor claiming knowledge of the situation commented that these â€œhindrancesâ€ will take time to work through. Both the banker and an Elan investor speculated that Genentech would likely not retain a bank to look at options for itself.
Source: The Financial Times