Icahn Playing Marriage Broker Between Biogen and Pfizer

Well, Carl Icahn has been buying large boatloads of Biogen stock over the last few months, and as those of you who follow the biotech industry are aware, he’s got the company putting itself on the block. That’s one of the normal sequels to an Icahn buying spree, and it looks like it’s going to work out well for him again (see Medimmune for another recent example).

Will it work out for Biogen, though? Looking over the potential buyers, it should also come as no surprise that the serious prospects make a pretty short list. Let’s see... huge, but with little presence in biologicals. Loaded with cash, but with serious pipeline problems and some nasty patent expirations coming on. Not averse to doing great big acquisitions to pump up their numbers. Gosh, who does that leave? Yep, Carl Icahn is playing marriage broker between Biogen and Pfizer.

There are also rumors of Pfizer buying Genzyme, for the exact same reasons. (That deal would at least have the desirable side effect of not further enriching Carl Ichan). If Amgen were doing better, we’d be hearing about Pfizer buying them, too, no doubt, but for now takeover rumors are one of the few things they probably don’t have to worry about. (Although you can make a case that they're the value play in the market. . .)

Does a Pfizer deal make sense? Well, they apparently considered a run at Biogen a few years ago, but backed down. And now Biogen is a lot more expensive, so you’d think that would answer the question. But you have to remember that Pfizer’s more desperate than it was back then, too. The disastrous loss of what could have been the biggest drug ever, the CETP inhibitor torcetrapib, changed things most unpleasantly (witness the closure of the Ann Arbor research site). And the market failure of the expensively developed inhaled insulin Exubera isn’t helping, either.

Oh, I wouldn’t want to run Pfizer, even if you paid me... well, what people get paid to run Pfizer. Honestly, it wouldn’t surprise me to see them up and buy Biogen, even if they are already in the multiple sclerosis market. They have a bunch of people who know how to manage takeovers, just like the Mongols had, and they could use the revenue, which will be pretty safe until the FDA gets its act together on biogenerics. Pfizer’s used to buying wasting assets, since that’s what you get when you buy a drug company for its big selling productss and ditch most everything else, and biologicals are wasting more slowly than small molecules do. God knows the investment bankers are motivated to see something like this go through at these prices.

But it would be a shame for Biogen. It was a shame when it happened to Warner-Lambert, and Pharmacia-Upjohn, and Affymax, and Sugen. A lot of people would lose their jobs, and a lot of good research would get crippled or lost in the clouds of dust. And Pfizer would hold itself together until the time came to feed again.