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Los Angelas, CA -- (SBWIRE) -- 02/06/2013 -- Biogen Idec Inc. (NASDAQ:BIIB) is a global biotechnology company. The Company discovers, develops, manufactures and markets therapies for the treatment of neurodegenerative diseases, hemophilia and autoimmune disorders. The Company’s products include AVONEX, TYSABRI, FAMPYRA, FUMADERM and RITUXAN.
Shares of Biogen Idec jumped Wednesday after the company said that it’s buying partner Elan’s (NYSE:ELN) interest in the multiple sclerosis drug Tysabri for $3.25 billion.
Biogen will pay cash and agreed to additional royalty payments (up to 25%) on the drug’s sales to gain the 50% of profit that Elan now collects from Tysabri. Biogen says the purchase will add as much $.30 to earnings per share in 2013.
Biogen’s stock rose more than 3% in late morning trading to $162.70 after jumping 6% earlier Wednesday. The stock is up by a third over the past 12 months. The US shares of Irish drug maker Elan dropped 8% to $9.60. That stock is down by 30% over the past year.
While Biogen appears to be the winner in this deal, the transaction may seem like a head scratcher to some investors. Wall Street analysts see Biogen’s near- and long-term future tied to an experimental pill for multiple sclerosis, Tecfidera, that will be more convenient than injected treatments like Tysabri. Approved in the US in 2004, Tysabri was a drug plagued by safety concerns early in its launch. And Biogen is paying a full price for an older drug in a competitive therapy area.
Still, Biogen CEO George Scangos calls the move “a natural next step for us.” On a call with analysts Wednesday morning, Scangos says he sees future growth from the drug and Biogen will benefit from full ownership. Tysabri is a highly effective treatment for multiple sclerosis and Scangos hopes to broaden its use in patients with the disease. He also sees potential for testing the drug for other conditions, including stroke. Admitting the “early challenges” for Tysabri, Scangos called the product a very important therapy in a critical treatment area for Biogen.
Tysabri was taken off the market in 2005 because of its link to a rare and fatal brain disease. It was allowed back on the market the following year under a restricted distribution agreement with the US government. Last year, the Food and Drug Administration approved a test that screens for risk of the rare brain infection and allowed the Tysabri label to warn people testing positive for such a risk not to use the drug.
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