Biogen Idec Inc. (NASDAQ:BIIB) announced today that FBC
Acquisition Corp., its wholly owned subsidiary, has commenced a
tender offer to acquire all of the outstanding shares of Facet
Biotech Corporation (NASDAQ:FACT) for $14.50 per share in cash, in
furtherance of its previously announced acquisition proposal. The
tender offer is scheduled to expire at 12:00 midnight, ET, on
October 19, 2009, unless extended or terminated.
The tender offer follows a written proposal made by Biogen Idec
to Facet Biotech’s Board of Directors on September 4, 2009 to
acquire all of the outstanding shares of Facet Biotech in a
negotiated transaction. Biogen Idec’s all-cash offer represented a
premium of approximately 64% over the $8.82 per share closing price
of Facet Biotech’s common stock on September 3, 2009, the last
trading day before Biogen Idec publicly announced its acquisition
proposal. In light of the rejection of the proposal by Facet
Biotech’s Board of Directors on September 8, 2009 and its refusal
to discuss a business combination of the two companies on the terms
proposed, Biogen Idec has decided to present its offer directly to
Facet Biotech’s stockholders.
“We believe this proposed transaction makes compelling business
sense for both Facet Biotech and Biogen Idec and is in the best
interests of our respective stockholders,” said Biogen Idec’s
President and Chief Executive Officer James C. Mullen. “Our $14.50
per share, all-cash offer ascribes meaningful and appropriate value
to Facet Biotech and represents an extremely attractive opportunity
for Facet Biotech’s shareholders to realize today the future value
of their company. In addition, we believe the transaction would
enable the important multiple sclerosis and solid tumor clinical
programs that the companies have been working on in collaboration
for nearly four years to have the best chance of reaching the
market and improving patients’ lives.”
In commencing the tender offer, Biogen Idec today also sent a
letter to the Board of Directors of Facet Biotech addressing
several statements in Facet Biotech’s letter and press release of
September 8, 2009 in which it rejected Biogen Idec’s $14.50 per
share, all-cash offer. Among other things, Biogen Idec’s letter
explains that, on the basis of Facet Biotech’s own disclosures,
Facet Biotech’s available cash is considerably below the Biogen
Idec offer price when the following factors are included in the
analysis: Facet Biotech’s cash burn rate of $8 million per month
for the remainder of 2009; the $30 million in cash spent as part of
the Trubion collaboration, as well as future development costs and
milestone payments under the terms of that agreement; Facet
Biotech’s total lease obligations of approximately $208 million on
an undiscounted basis, as well as additional obligations of nearly
$19 million; and, inclusion of shares underlying Facet Biotech’s
outstanding options. Biogen Idec’s letter also points out, contrary
to Facet Biotech’s assertions, that because Facet Biotech’s net
cash per share is considerably below Biogen Idec’s offer price, the
offer ascribes meaningful value to daclizumab, which Biogen Idec is
jointly developing for the treatment of relapsing multiple
sclerosis, additional programs in its pipeline, its technology
platform, related milestone payments, and synergies. The letter
sent today to Facet Biotech’s Board of Directors follows below:
September 21, 2009
Facet Biotech CorporationBoard of Directorsc/o Faheem Hasnain,
President and Chief Executive Officer1500 Seaport BoulevardRedwood
City, CA 94063
Dear Faheem:
Biogen Idec is today commencing a tender offer to acquire all of
the outstanding shares of Facet Biotech Corporation for $14.50 per
share in cash. As you know, we have repeatedly expressed our
interest in discussing with Facet Biotech’s Board of Directors and
management team the potential acquisition of Facet Biotech by
Biogen Idec in a negotiated transaction, but have been told that
Facet Biotech has no interest in discussing a potential transaction
on the terms we proposed. In light of the rejection of the proposal
by Facet Biotech’s Board of Directors on September 8, 2009, we are
presenting our $14.50 per share, all-cash offer directly to Facet
Biotech’s stockholders.
In commencing this tender offer, we would like to address for
the record certain of the assertions you made through the September
8, 2009 letter and press release rejecting our offer, as well as in
subsequent communications to the investment community.
First, Facet Biotech has stated inaccurately that Biogen Idec’s
$14.50 per share proposal “represents only the cash on [Facet
Biotech’s] balance sheet and fails to attribute any value to
daclizumab, or to the rest of [Facet Biotech’s] R&D pipeline
and platform.” Specifically, Facet Biotech asserts that its cash
balance as of June 30, 2009 represents a per share cash value of
approximately $15.11. In fact, Facet Biotech’s available cash is
considerably below our offer price of $14.50 per share when the
following factors are accounted for:
- In public statements, Facet
Biotech has estimated that it will use approximately $80 million in
cash in 2009 and indicated that about $32 million had already been
spent through June 30, 2009. This implies that the monthly cash
usage is about $8 million for the rest of 2009. Each month that
passes is another month in which Facet Biotech’s cash balance
decreases.
- Facet Biotech also recently
spent $30 million in cash as part of its Trubion collaboration, in
addition to committing to funding future development costs and
milestone payments, which it has since confirmed are not included
in its estimated $80 million per year cash expenditure rate. This
new collaboration obligation represents a significant cash burden
to Facet Biotech.
- Facet Biotech also has
significant lease and other obligations. As you recently disclosed,
Facet Biotech has total lease obligations on an undiscounted basis
of approximately $208 million. Facet Biotech’s most recent
Quarterly Report discloses additional obligations totaling over $12
million related to manufacturing, post retirement benefits, and
other obligations.
- Facet Biotech has referred to
its cash per share using shares outstanding as of July 31, 2009,
but this overstates the amount because it does not reflect the
shares underlying outstanding options.
When these factors are included in the per share cash analysis,
the available cash is significantly below the reported June 30,
2009 balance.
Second, Facet Biotech claims that Biogen Idec’s proposal does
not reflect the value of daclizumab, additional programs in its
pipeline, its technology platform, related milestone payments, and
synergies. However, the fact that Facet Biotech’s net cash per
share is considerably below our offer price means that Biogen
Idec’s proposal does ascribe meaningful value for these operating
assets. Further, Biogen Idec’s $14.50 offer represents a 64%
premium over the $8.82 per share closing price of Facet Biotech on
September 3, 2009.
Third, Facet Biotech suggests that “the significance of the
[interim futility analysis regarding daclizumab] has not been fully
appreciated by the investment community.” In fact, Facet Biotech’s
stock price increased approximately 13% on the day following the
announcement regarding the interim futility analysis and 27% from
that day to the day prior to the announcement of the Trubion
collaboration, evidencing a significant appreciation for the
futility analysis findings in the market.
Fourth, Facet Biotech suggests that it only entered into the
Trubion collaboration “after concluding that it was a positive for
[Facet’s] stockholders and was likely to be a positive synergistic
opportunity for Biogen Idec as well.” We believe that our view that
the Trubion collaboration is value destructive has been
corroborated by the fact that Facet Biotech’s stock price dropped
22% in the five trading days following the announcement of the
Trubion collaboration and prior to Biogen Idec’s proposal.
Finally, Facet Biotech has disclosed that it expects its cash
balance to be completely depleted by the end of 2012, despite the
fact that the company will have significant remaining obligations
and the need to continue funding its clinical programs, including
importantly, the clinical programs in which it is partnered with
Biogen Idec.
Biogen Idec’s proposal represents an extremely attractive
opportunity for Facet Biotech’s shareholders to receive today the
future value of the company. We continue to urge you to engage in
discussions with us so that we may reach a definitive merger
agreement.
Sincerely,
/s/ James C. MullenPresident and Chief Executive Officer
Biogen Idec’s tender offer is not subject to any financing
condition or approval by Biogen Idec stockholders. The offer is
conditioned upon Facet Biotech’s stockholders having validly
tendered and not properly withdrawn prior to the expiration of the
offer a number of shares representing, together with the shares
owned by Biogen Idec, at least a majority of the total voting power
of all of the outstanding shares of Facet Biotech entitled to vote
generally in the election of directors or with respect to a merger,
calculated on a fully diluted basis, among other conditions. The
complete terms and conditions of the tender offer are described in
the Offer to Purchase and related Letter of Transmittal that Biogen
Idec will file today with the U.S. Securities and Exchange
Commission (SEC). Facet Biotech stockholders may obtain copies of
these documents free of charge at the SEC’s website (www.sec.gov)
or by directing a request to Innisfree M&A Incorporated, the
Information Agent for the offer at (877) 800-5186.
Biogen Idec has engaged Leerink Swann LLC as financial advisor
and Wachtell, Lipton, Rosen & Katz as legal counsel in
connection with the proposed transaction.
About Biogen Idec
Biogen Idec creates new standards of care in therapeutic areas
with high unmet medical needs. Biogen Idec is a global leader in
the discovery, development, manufacturing, and commercialization of
innovative therapies. Patients in more than 90 countries benefit
from Biogen Idec's significant products that address diseases such
as lymphoma, multiple sclerosis, and rheumatoid arthritis. For
product labeling, press releases and additional information about
the company, please visit www.biogenidec.com.
Statement on Cautionary Factors
Any statements made in this press release that are not
statements of historical fact, including statements about Biogen
Idec’s beliefs and expectations, including Biogen Idec’s proposed
acquisition of Facet, are forward-looking statements and should be
evaluated as such. Forward-looking statements include statements
that may relate to our plans, objectives, strategies, goals, future
events, future revenues or performance, and other information that
is not historical information. These forward-looking statements may
be identified by words such as "anticipate," "expect," "suggest,"
"plan," "believe," "intend," "estimate," "target," "project,"
"could," "should," "may," "will," "would," "continue," "forecast,"
and other similar expressions.
Although Biogen Idec believes that these forward-looking
statements and projections are based on reasonable assumptions at
the time they are made, you should be aware that many factors could
cause actual results or events to differ materially from those
expressed in the forward-looking statements and projections.
Factors that may materially affect such forward-looking statements
include: Biogen Idec’s ability to successfully complete the tender
offer for Facet shares or realize the anticipated benefits of the
transaction; delays in obtaining any approvals required for the
transaction, or an inability to obtain them on the terms proposed
or on the anticipated schedule; the failure of any of the
conditions to Biogen Idec’s tender offer to be satisfied; and other
factors described generally in Biogen Idec’s periodic reports filed
with the Securities and Exchange Commission. Forward-looking
statements, like all statements in this press release, speak only
as of the date of this press release (unless another date is
indicated). Unless required by law, we do not undertake any
obligation to publicly update any forward-looking statements,
whether as a result of new information, future events, or
otherwise.
Important Additional Information
The information in this press release is provided for
informational purposes only and is neither an offer to purchase nor
a solicitation of an offer to sell any securities of Facet. The
description of the tender offer contained in this press release is
not intended to be a full or detailed description of the terms or
conditions of the tender offer. Facet stockholders are urged to
read the disclosure documents that will be filed later today with
the SEC, including the tender offer statement, regarding the tender
offer because they will contain important information. Stockholders
may obtain the disclosure documents (when they are available), and
any other documents relating to the tender offer that are filed
with the SEC, at no charge at the SEC’s website at www.sec.gov or
by directing a request to Innisfree M&A Incorporated, the
information agent for the tender offer.
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