Biogen/Idec Throws in the Towel
The Wall Street Journal reported late Wednesday that after weeks of exploring a possible sale to a larger pharmaceutical concern, Biogen Idec Inc. reported it had received no serious offers, prompting a 27% drop in the company's stock price.
In after-hours trading, Biogen's stock plunged $20.38 to $55.50, erasing $6 billion in market value. Before the announcement, the shares ended regular trading on the Nasdaq Stock Market at $75.88, up 49 cents according to the journal. Within a few minutes of the announcement, Biogen lost nine months of gains fueled mainly by buyout rumors. Acquisition candidates may have been dissuaded by Biogen's high stock price and market valuation -- its market value had grown to $25 billion after the company announced its intention to sell a couple of months ago.
In a previous post, I suggested that it would be unlikely that Biogen Idec would be able to induce a pharmaceutical suitor to take the “bait”. There simply was “too much hair” on the deal to warrant serious consideration by pharmaceutical suitors.
This will likely to be a serious and damaging blow to the Company. I am not sure what the future holds for Biogen Idec but I suspect it is not a bright one—whatever the outcome. Don’t be surprised if words like reorganization, strategic reallocation of resources or creative staffing solutions begin to appear in the media. The company needs to sweeten the deal in order to get a real bite!
Until next time…
Good Luck and Good Job Hunting (try Biogen/Idec, all of the”smart” people are dusting off their resumes)!!!!!
