Biogen Not Pursuing an Acquisition, Says Source
August 4, 2016
By Mark Terry, BioSpace.com Breaking News Staff
Successful companies whose stock has dropped recently, or whose flagship products’ sales are weakening or facing patent expiration, are often the target of acquisition rumors—often with good reason. For several months, at the very least, Cambridge, Massachusetts-based Biogen has been at the heart of rumors that it’s either going to buy something to bolster softening sales of its multiple sclerosis (MS) franchise, or will be acquired by other companies. Earlier this week, the Wall Street Journal reported that both Merck & Co. and Allergan have been in preliminary talks with Biogen over a sale.
But today, Reuters cites an inside source claiming that there have been no formal acquisition inquiries and that Biogen isn’t actively looking for any. However, some people in the industry, what Reuters dubs “Biogen’s peers,” have apparently spoken with individual board members about possible interest, but nothing formal.
But investors and analysts are certainly pushing for an acquisition or some move that will drive the company’s price back up. The company’s high was on March 20, 2015, when shares traded for $475.98. Since then shares have been down considerably, hitting a low of $229.02 on June 24, 2016. Share prices have been climbing recently as rumors of a possible acquisition have resurfaced, currently trading for $318.45.
Reuters’ source indicates that the reason Biogen isn’t interested in a sale is because of its confidence in its neurological pipeline. Top of that list is aducanumab, an experimental drug for Alzheimer’s disease. In early trials, it showed statistically significant improvement in two measures of cognition over placebo. This was so promising that it was streamlined past Phase II trials and directly into a Phase III trial. Early data is expected later this year, with more definitive data expected in 2017.
Geoffrey Porges, an analyst at Leerink Partners, told Bloomberg, “There isn’t a pharmaceutical company on the planet that wouldn’t like to have a leading Alzheimer’s disease program.”
Earlier this week, on Aug. 1, Biogen and Ionis Pharmaceuticals announced that nusinersen, a drug for spinal muscular atrophy (SMA), met the primary endpoint for its Phase III trial. Infants receiving the drug showed a statistically significant improvement in motor milestones over those receiving placebo.
SMA is noted for a loss of motor neurons in the spinal cord and lower brain stem. The disease results in severe and progressive muscular atrophy and weakness. At its most severe, patients are paralyzed and have difficulty breathing and swallowing. There is currently no treatment.
It is also these neurological programs that might interest other companies. Vamil Divan, an analyst with Credit Suisse, however, doesn’t think either Merck or Allergan would be interested in Biogen. Regarding Allergan, he told Barrons, “With the cash they will be receiving following yesterday’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.”
Of Merck, Divan said, “Merck’s key areas of focus include diabetes, oncology, vaccines and acute hospital care/infectious disease, which would suggest very little in terms of research and development and Selling, General and Administrative expenses synergies from a combination with Biogen. … Merck is doing research in neuroscience, but their only late-stage asset is verubecestat (a BACE inhibitor), which Biogen has as well in their portfolio.”
That doesn’t mean other companies won’t be interested, and Leerink’s Geoffrey Porges offers up Novartis , Pfizer and Gilead as possible buyers as well.