Monday, October 29, 2007

Paperstand (BIIB)

The WSJ discusses Biogen Idec (BIIB), whose mkt cap has surged from $15bn to €22bn in about a year, mainly b/c acquisition rumors. Although Carl Icahn has indicated interest in buying the biotech concern, he says shareholders could make more by selling to a large pharma. As Mr. Icahn sees it, biotechs have robust development pipelines that traditional drug co's need in an era when many of their top products will soon lose patent protection. But some analysts who follow the co aren't so sure about its pipeline. They also say the co's existing products might face sales pressure b/c of growing competition in multiple-sclerosis treatment and a looming decrease in Biogen's share of the profits on drugs it co-mkts with Genentech. Skeptics argue that while Biogen may hit its forecast of about $4.8bn in rev in 2010, its future after that point is cloudy. Biogen, like the big pharma co's, will face its own rev pressure, said Caroline Stewart of Piper Jaffray, who recently downgraded the shares to Underperform and says a buyout at current prices is "questionable." A Biogen purchase, she says, "doesn't really help them." Ms. Stewart thinks Biogen is worth about $65 a share without cuts, based on her ests of future rev. But she considers a much higher bid from a motivated buyer unlikely. When Biogen "was $42 a share, yeah, it was cheap," she said. "It's not so cheap now."
The WSJ reprots that Blackstone Group is expected to announce today that it has lured Christopher Nassetta, the CEO of Host Hotels & Resorts (HST), to lead recently acquired Hilton Hotels as it pursues an ambitious growth strategy and plans to boost the hotelier's standing in the luxury mkt. Mr. Nassetta will leave his position as CEO of Host Hotels and become president and CEO of Hilton, after a 4-6wk transition period.

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