SAN FRANCISCO - Biogen Idec Inc. is building a pipeline of drugs for multiple sclerosis, a disease that stumped scientists for years, making it attractive to billionaire investor Carl Icahn and competitors led by Pfizer Inc.
Driven by the success of its injectable treatment Tysabri, which may generate $2.8 billion in 2010 sales, Biogen is testing five experimental MS therapies. Each fights the nerve disorder in a unique way and may add annual sales of $1 billion apiece, said Jason Kantor, an RBC Capital Markets analyst in San Francisco.
Biogen's value jumped 50 percent this year, and analysts see it as a takeover target by companies in need of new products, including Pfizer and Sanofi-Aventis SA. The purchase price may reach $90 a share, a 21.6 percent premium from Wednesday, as acquirers assess next year's earnings potential and Biogen's research pipeline, according to Geoffrey Porges, an analyst at Sanford Bernstein & Co. in New York.
"If you're a large drug company, and you don't have a significant biotech portfolio, this is an intriguing opportunity," Porges said. He sets the company's possible purchase price at $80 to $90 a share.
Cambridge-based Biogen has a price-to-earnings ratio of almost 32, the second-highest after Celgene Corp. among biotechnology companies with a market value of at least $10 billion. Analysts say the surge has been justified, with 19 of 27 surveyed by Bloomberg recommending investors hold the stock. Summit, N.J.-based Celgene has a P/E of 72.
Biogen fell 7 cents to $73.93 in Nasdaq Stock Market composite trading.
Biogen isn't commenting on the acquisition process until it is complete, spokeswoman Amy Reilly said.
