Abbott to Buy Facet for $27/Share, Topping Biogen Bid
Facet Biotech has agreed to be acquired by Abbott Laboratories for $27 a share, topping a hostile offer of $17.50 a share made last year by Biogen Idec. Shares of Facet rose 67% after the announcement.
Abbott and Facet said on Tuesday that the cash deal will have a net cost of about $450 million, including a purchase price of about $722 million less Facet's cash and securities of around $272 million.
"It's not the very last dollar wrung out of the buyer, but it's 95% of the way there," said Merriman Curhan Ford & Co analyst Mike King. "It more than compensates existing shareholders for the risk of taking daclizumuab all the way to the market."
Facet, based in Redwood City, Calif., is jointly developing multiple sclerosis drug daclizumab with Biogen, which terminated its takeover offer in December after Facet shareholders rejected it. Pivotal-stage trials of the drug are slated to start in the second quarter of this year.
The companies also are developing voliciximab as a treatment for solid tumors and Facet has collaboration deals for other cancer drug candidates.
"The acquisition brings access to biologics in two key therapeutic areas, immunology and oncology," Abbott said in a statement.
The deal is the latest in a string of takeovers involving biotech companies that develop antibody-based drugs, including Astellas Pharma's recent hostile $3.5 billion bid for OSI Pharmaceuticals. OSI's main product, the Tarceva cancer drug, is sold in a partnership with Roche Holding.
Antibody technology specialist Medarex was acquired last year by Bristol-Myers Squibb at a 90% premium.
"I don't think anybody's going to say Abbott's an idiot for paying this much," King said.
Abbott, headquartered in Abbott Park, Ill., said the Facet transaction is expected to close in the second quarter of this year and will not affect its 2010 earnings outlook.
"This acquisition will further strengthen Abbott's biologics capabilities and pharmaceutical pipeline," John Leonard, Abbott's senior vice president, global pharmaceutical research and development, said in a statement.
