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   Biotech / MedicalBiogen


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From: mopgcw5/14/2009 11:44:41 AM
   of 1684
 
What was the point of the merger in the first place if this is the new goal... (edit -- i mean how on earth does CI believe that de-merging will ADD value -- other than to the lawyers that is)...

UPDATE: Icahn Suggests Biogen Split As Proxy War Continues
By Thomas Gryta
Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)--Billionaire investor Carl Icahn wants Biogen Idec Inc. (BIIB) to consider splitting into two companies, one focusing on neurology and the other on cancer, as he wages his second proxy fight with the biotech company in as many years.

Icahn continued to criticize the Cambridge, Mass., company's effort to sell itself in late 2007, contends that management isn't focused on shareholder value, and made numerous references to his successful turnaround of ImClone Systems Inc. in a filing with the Securities and Exchange Commission.

The Icahn group, which holds a 5.6% stake, is seeking four seats on Biogen's 13-seat board, a move that Biogen is opposing. The company's shareholder meeting is set for June 3.

"This seems like nothing more than an 11th hour tactic in order to win votes," said Biogen spokeswoman Naomi Aoki, who noted that the filing is the first time the company has heard of a plan to split the company.

Officials from Icahn's group were unavailable for comment.

Shares of Biogen recently traded down 1% to $48.70, but are down 23% in the last 12 months, compared to a 15% drop in the Amex Biotech Index.

Last month, Icahn's group began criticizing the $6.4 billion merger of Biogen with Idec Pharmaceuticals in 2003 that created the current company on the grounds that it never lived up to the projected synergies.

His proposal to split the company seems to effectively reverse that merger. The neurology-focused company would have reported $2.9 billion in sales in 2008, while a cancer-focused company would have reported $1.2 billion in sales. Biogen Idec's 2008 total revenue was $4.1 billion.

Icahn said the move would improve management's focus and the appeal of those assets to outside buyers.

Morgan Stanley analyst Steven Harr expects investors to have a "difficult time" with the Icahn plan, because it may trigger change-in-control provisions in Biogen's drug partnerships that could cause it to lose its shares in the drugs.

Biogen sells multiple-sclerosis treatment Tysabri with Elan PLC (ELN) and cancer/arthritis drug Rituxan is sold with Genentech Inc., a unit of Roche Holding AG (RHHBY).

Harr also noted that a separation could also trigger a downgrade of the individual companies' debt because of concentrated risk and reduced cash holdings.

In Tuesday's filing, Icahn proposed that he could reach similar results in turning around Biogen that he had with ImClone Systems. Icahn took control of ImClone in 2006, when its stock price was at $31, and sold the company to Eli Lilly & Co. (LLY) last summer for $4.5 billion, or $70 a share.

As with ImClone, Icahn hopes to "recharge" partner relations with Genentech and Elan, shift the cost structure, and boost research and development in order to change the culture and bolster the company's pipeline.

The billionaire first became involved in Biogen in 2007, when he prompted a sale process that failed to attract any bidders. He attempted to put three people on the board last year but obtained only 19% of shareholders' votes.

Icahn has consistently disapproved of that sales process, claiming the company put up barriers in the auction process that discouraged companies from bidding the $20 billion to $25 billion needed to complete the deal. He subsequently filed a successful lawsuit seeking documents related to the sale attempt.

Biogen has contended that bidders were wary of the high price tag in relation to the risk related to Tysabri, which was withdrawn from the market for a period because it was suspected to cause a rare but often deadly brain disease.

-By Thomas Gryta, Dow Jones Newswires; 201-938-2053; thomas.gryta@dowjones.com

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To: mopgcw who wrote (1648)5/14/2009 1:03:03 PM
From: kenhott
   of 1684
 
Mr. CI is in it for himself. Maybe with big pharmas narrowing their business focuses, splitting the company in two will get more bidders than the entire company as a whole??

------------------------
OT-not Biogen- Killing two birds with one stone... <reply>

I don't really follow the company. But the drug is a pretty good one and it is pretty crazy that the law firm screwed up the filing. I would guess that the generics are using paragraph III to get to market, and as far as I know there is no way to tell which company has filed till after action by the FDA.

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To: tuck who wrote (1647)6/29/2009 9:19:41 AM
From: tuck
   of 1684
 
We're now up to 10 PML cases post-relaunch? I missed the other 3 . . . and that's since April? I just had my prior count wrong?

notablecalls.blogspot.com

Cheers, Tuck

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To: tuck who wrote (1650)6/29/2009 2:02:29 PM
From: mopgcw
   of 1684
 
CS: Biogen Idec. Inc. (BIIB) NEUTRAL [V] M. Aberman
CP: US$ 50.07 TP: US$ 54 CAP: US$ 14.4b

Is PML Risk Dependent on Tysabri Duration?

• Conclusion: One of the major risks to Tysabri is the potential that longer duration of therapy increases the risk of PML. This
would limit duration of therapy and slow (if not stop) growth as patients cycle off drug - think about filling a bath tub with the
drain open. As recently as the 2009 AAN meeting in April, Biogen presented data to the academic community trying to
minimize the risk of duration as an increased risk by showing that the PML cases up to that point did not to show increased
risk with longer duration. However, since AAN there have been four new cases, all in patients on >24 months of therapy.
With 6 PML cases in the 6,800 patient on Tysabri for >24 months, the incidence of PML is approaching the 1/1000 assumed
at launch. Further, with 4 cases at >30 months of therapy, the incidence at >30 months is likely greater than 1/1000. While
the number of PML cases is still low and there is an unexplained imbalance between the US and EU (particularly Germany),
these new cases increase our caution regarding PML risk increasing with longer duration of therapy.

• What's New? Biogen reported its tenth case of PML since re-launch of Tysabri. The patient was in the EU, developed PML
after 30 months of Tysabri treatment, and was not in a clinical trial.

• Implication: On the positive side, since AAN, we have become less concerned about the competitive threats of oral MS agents
given toxicity associated with FTY720 and regulatory risk for cladribine. However, our cautious stance on Biogen has also
been driven by the risk of PML increasing with duration of Tysabri. In the near term, we believe the PML risk will be of greater
concern, and as such, we remain Neutral rated with a $54 Price Target and expect the stock to continue to be weak on this
news.

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From: mopgcw7/18/2009 10:58:21 AM
   of 1684
 
CS: Biogen Idec. Inc. (BIIB) NEUTRAL [V] M. Aberman
CP: US$ 47.10 TP: US$ 54 CAP: US$ 13.6b
Good Quarter; Still Worried About PML, Revising Estimates

• Conclusion: There was a lot to like in Biogen's quarter with a top-line beat driven by reacceleration of Tysabri and Avonex
sales benefiting from a hefty price increase in the US and the weak US dollar. On the operating expense side, R&D was hit
by the Acorda deal but both SG&A and cost of goods came in below expectations leading to higher than expected EPS (ex-
Acorda). Despite the good quarter, we can not help but remain cautious over the recent cluster of PML cases, particularly as
they could portend a relationship between Tysabri duration and risk. We also wonder how long Biogen can continue to raise
prices at high double digit rates annually to maintain Avonex growth. While caution is winning the day for now we do envision
a day where we get over our Tysabri concern and pipeline catalysts are closer to being realized.

• What's New? Excluding the upfront payment of $110 M to Acorda, Biogen reported non-GAAP EPS of $1.07 vs. our estimate
of $1.03 and consensus of $1.02. The better than expected results were driven by higher product revenues with lower SG&A
and COGS. Guidance was updated for 2009 to incorporate the Acorda upfront payment.

• Implication: Remain Neutral with a $54 Price Target. We have adjusted our model to account for a near term Tysabri
reacceleration and Acorda payment. Our '09 EPS incl options comes down to $3.85 from $4.12 while our '10 EPS comes up
slightly to $4.15 from $4.13. We move our valuation to 13x our 2010 EPS estimate of $4.15 (including options). While we
prefer to sit on the sidelines while we wait to see if the current PML cluster is the "tip of the iceberg," we do think the valuation
is relatively attractive in the mid-$40s. That said, we believe the stock will remain range bound up to the low to mid-$50s until
investors gain confidence that PML cases will no accelerate and lead to another hit to sales. In the near term, we will look to
the next two weeks of PML updates and then again in September at the ECTRIMS meeting.

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From: mopgcw8/26/2009 7:49:28 PM
   of 1684
 
DB: ***FDA approved a branded generic form of Bayers Betaseron, beta-interferon,
for multiple sclerosis: launch expected for fall'09. While generic
betaseron could have a modest impact to Avonex revenues, we believe
ultimately near term pricing pressure forces will be mostly offset by greater
convenience and better tolerability for Avonex. Every $100M of Avonex
represents $0.22 in BIIB EPS.***

*Generic betaseron already available in EU. Novartis conducted trials in
2000 patients to attain approval of their generic betaseron, branded as Extavia.
The drug is available in 12 countries in the EU, at a 20% discount to
Betseron. We note that manufacturing issues/supply constraints have limited
the uptake of the drug in the EU.

*Avonex most expensive ABCR but also most convenient. Avonex,
Betaseron, Copaxone, Rebif & Tysabri price/patient/year is $30K, $23-25K,
$28K, $27-28K, $29K. Dosing for the ABCR's is as follows: Avonex: 1x/
week, Betaseron: every-other day, Copaxone: 1x/day, Rebif: 3 days/week .
Additionally we note that physicians consider Betaseron to be less tolerable
than Avonex. Thus while pricing pressure is a concern, greater convenience
and better tolerability for Avonex should provide a buffer to large scale pricing
and volume erosion.

*We model some limited impact from Extavia. Our current 2009 US
Avonex estimate of $1.45B takes into consideration 9.5% price increase
and stabilizing demand. We forecast limited 2%, 0%, -5% growth rate in
2010, 2011, 2012 given the presence of Extavia. We forecast greater declines
post 2013 (-10% and -15% every year there-after) when Avonex's
patent expires.

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From: mopgcw10/9/2009 7:14:24 PM
   of 1684
 
CS: CP: US$ 48.60 TP: US$ CAP: US$ 14b
Briefing Docs Raise Questions on Fampridine

• Action/Event: The FDA briefing documents for the Fampridine-SR Advisory Committee Panel were released today. FDA
raised concerns on both the safety and efficacy of Fampridine. Ultimately, we believe Fampridine will get through the panel
and NDA process, but not without significant risk.

• Investment Case: While both Phase III trials hit primary endpoints, secondary endpoints such as walking speed did not
confirm efficacy, leading FDA to question whether the data were sufficiently robust. In addition, while reviewers acknowledge
there was no true increase in risk of seizure at 10 mg bid dose, they are concerned about therapeutic window with 10-fold
increase in seizure risk at 20 mg bid and the fact that in this trial patients were pre-screened with EEG to rule out seizure risk,
confounding the comparison of seizure risk with a historical control in the open label extension. The bottom line is these
panels are notoriously unpredictable and this panel will not be straightforward, either. However, given the widespread use of
compounded 4-aminopyridine and the presence of nine neurologists on the panel who may believe the Fampridine-SR
provides better risk/benefit than the compounded version, we think the panel will have a more positive view than reflected in
the FDA briefing document.

• Catalysts: While the near term focus will be on the Fampridine-SR FDA Advisory Panel on October 14th, a more significant
catalyst for Biogen is 3Q earnings/Tysabri patient additions on October 20th.

• Valuation: Our 12-month price target of $54 for Biogen is based on a DCF analysis. For our DCF analysis, we use cost of
equity of 10.2%, and assume 4.0% annual cash flow growth rate in 2013-2016 and a terminal growth rate of 2.0% in 2016.

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From: mopgcw10/23/2009 7:18:26 PM
   of 1684
 
citi: Biogen Idec Inc (BIIB)
More PML Cases Than Expected – True Rate Still Unclear

? Conclusion(s) — EMEA's decision to review risks/benefits of Tysabri is not
surprising, but the large number of PML cases that were not previously
disclosed (23 cases in total vs. street expectations of 13-17 cases and BIIB's
last update of 11 cases in late July) was unexpected. We believe this is an
incremental negative for Biogen Idec, and will likely lead to a label update in
the US/EU underscoring the higher risk of PML with longer treatment duration.
More so, this raises the potential for docs to institute treatment holidays.
Finally, EMEA may institute more stringent risk mgt program such more similar
to the TOUCH in the US. Currently, there is no risk mgt program in Europe for
Tysabri, possibly explaining why there are more PML cases in Europe than in
the U.S. We would remain on the sidelines. Our top ideas for remainder of the
year are Celgene (Buy) and Gilead (Buy).

? Figuring out the Rate of PML — While there is no information currently on how
long these pts have been on therapy, assuming that they all have been on
Tysabri for >12 mos (all previous 11 cases were in pts with >12 mos exposure)
the rate is 0.668/1,000. If all new cases were in pts with >24 mos exposure (7
previously reported and 12 new cases) the rate would be an alarming
1.42/1000, which is above current label rates. To remain within the 1/1000
rate, a maximum of 6 out of the 12 new cases could have been in pts with >24
mos exposure.

? Impact on Biogen Idec — It is unclear at the moment if EMEA will take action
on Tysabri based on these new disclosed PML rates. We believe the risk/reward
for Tysabri may still be deemed to be positive based on physicians' comments.
However, if the rate creeps substantially above 1/1000, it is possible that
regulatory agencies may consider more severe measures. We do expect,
however, both the EU and U.S. label to be revised to include this new
information and some language stating that the risk of PML increases with
Tysabri exposure.

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From: mopgcw10/24/2009 11:16:18 AM
   of 1684
 
CS: Biogen Idec. Inc. (BIIB) NEUTRAL [V] M. Aberman
CP: US$ 47.23 TP: US$ 54 CAP: US$ 13.6b
PML Cases Suggest Higher Risk

• Action/Event: The CHMP of EU started a review of Tysabri in view of 23 cases of PML since the re-launch. The last official
update provided by Biogen listed 11 confirmed cases on July 24th. During ECTRIMS in September another 2 cases were
reported, suggesting 10 more cases have emerged since mid-September. Based on these cases and the number of Tysabri
patients who have been on therapy for longer than 24 months, we estimate the risk of PML could be as high as 1.4 in 1,000,
which is greater than 1 in 1,000 currently on the label.

• Investment Case: As previously communicated by the company on its 3Q conference call, Biogen is discussing label changes
with regulatory authorities. During the call, we found it curious that Biogen had changed their tune and agreed that the risk of
PML increased with duration of therapy. With this news, we now understand why. We expect the new label will highlight the
increased PML risk associated with longer duration of therapy. In addition, we think EU will institute a stricter risk
management program for Tysabri similar to the TOUCH program in US. Ultimately, we see a slowdown in new patient
additions and more drug holidays or switch to other therapies after a certain time of period. The bottom line is we will see a
deceleration in Tysabri growth worldwide. Given the declining Avonex and Rituxan revenues coupled with the slowing growth
of Tysabri, we remain cautious on Biogen shares.

• Catalysts: The next catalyst for Biogen Idec will be the ocrelizumab Phase II data in MS.

• Valuation: Our 12-month price target of $54 for Biogen is based primarily on a P/E analysis, where we apply a 12.5x multiple
on our 2010E EPS of $4.26 (including stock options) to derive a $54 fair value.

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From: mopgcw11/3/2009 4:30:43 PM
   of 1684
 
Barrons; Biogen's a Buy Jefferies & Co. sees nearly 20% upside from current levels.


Biogen Idec (BIIB: Nasdaq)
By Jefferies & Company ($42.13, Nov. 2, 2009)

WE ARE UPGRADING Biogen to Buy from Hold on valuation; maintaining our price target of $50, about 19% upside to current share price.


We view current valuation largely priced in for Tysabri concerns, posing limited downside; we are upgrading to buy. While we acknowledge that Biogen lacks apparent major positive catalysts near term, we believe its current valuation as attractive for (1) inexpensive valuation (trading at about 10x our estimated 2010 earnings versus peer average of about 13 times); (2) strong free-cash-flow yield (about 8%-10% versus peer median of about 6%); and (3) potential share-price appreciation from proposed share buyback (about 8% of outstanding shares).

Strong free cash flow (FCF) enables Biogen to return value to shareholders through share repurchases or dividends. Despite its high research and development spending as a percentage of total revenue (about 30% vs. about 23% for peers), Biogen's FCF is the second highest among peers, with about 10% FCF yield in 2010 by our estimate (versus peer median of about 6%).

At current depressed valuation, we expect the recently announced share repurchase of up to $1 billion is likely to accelerate in near-term. This represents about 8% of BIIB's current outstanding shares. BIIB has about $3 billion in cash/investments, with its long-term debt-to-capitalization ratio of about 14%.

Unpredictability of additional progressive multifocal leukoencephalopathy (PML) from Tysabri long-term therapy continues to be a concern; however, Tysabri withdrawal from the market is highly unlikely (according to regulatory consultant). Currently, ongoing label change discussions will likely include the increased duration of Tysabri therapy as a risk factor for PML. Experts commented that Tysabri label changes might curtail some use in greater than 24-month treatment, but this could be potentially offset by increased use in short-duration treatment. While experts do not see the risk of Tysabri being pulled off the market (unless PML incidence reaches 1/50), they note that a higher incidence than about 1/500 PML cases at greater than 24-month duration of therapy could make them more cautious.

Our valuation analysis indicates limited downside to Biogen shares. We estimate a pure-base value of Biogen at about $38/share (without Tysabri), about $44 if Tysabri sales decline by 50% from our current assumptions, about $49 if Tysabri sales decline by 25%.

Our $50 price target is 15 times our 2010 estimated earnings per share of $4.34, discounted back at a 30% annual rate. The price-to-earnings ratio is roughly in-line with the 2009 P/E multiple for the peer group. Risks include, but are not limited to: (1) higher-than-expected current PML rates, negatively impacting Tysabri sales growth; (2) growing competition in oral multiple sclerosis drug development; and (3) potential generic Interferon (IFN) beta impact in EU sales.

-- Eun K. Yang, Ph.D.
-- Kimberly Smith
-- Lunan Ji
-- Marko Kozul, M.D

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