UPDATE 3-Facet rejects bid by Biogen as inadequate

* Facet rejects $14.50-a-share bid; Biogen sticks to guns

* Facet says offer does not properly value assets

* Facet shares rise 5 pct, further above bid price (Adds Biogen reiterating bid, closing shares)

By Toni Clarke

BOSTON, Sept 8 (Reuters) - Facet Biotech Corp FACT.O said on Tuesday it had rejected an unsolicited bid by Biogen Idec Inc (BIIB.O) to acquire Facet for $14.50 a share, saying the offer was inadequate and not in the best interests of shareholders.

Facet shares, which rose above the Biogen offer price on Friday, climbed another 5 percent Tuesday to close at $16.15, a sign that investors expect Biogen to sweeten its offer. Biogen shares rose 0.3 percent to $51.18, also on the Nasdaq.

"We think Biogen is well-funded and likely to materially raise its initial offer, which would have been largely offset by Facet's current cash on hand," S&P analyst Steven Silver said in a research note.

But Biogen stuck to its guns on Tuesday, reaffirming the same $14.50-per-share offer, saying it "represents an extremely attractive opportunity for Facet's shareholders to realize the future value of their company."

Facet, which is based in Redwood City, California, and Biogen are co-developing daclizumab, a drug for multiple sclerosis, and volociximab, for solid tumors.

Facet said Biogen's offer, worth about $355 million, values the company at roughly the value of its cash, marketable securities and restricted cash, which stood at $371.1 million as of June 30, or the equivalent of about $15.11 a share.

"It thus places no value on the operating and other assets of the company," Facet said in a statement.

Biogen, which is based in Cambridge, Massachusetts, and makes the multiple sclerosis drugs Avonex and Tysabri, made its offer in a letter last week to Facet's board.

Biogen's offer was lower than a previous offer it had made on Aug. 17, of $15.00 a share.

Biogen said it reduced its offer to $14.50 a share after Facet announced a collaboration with Trubion Pharmaceuticals Inc TRBN.O.

Biogen said the Trubion deal reduced the value of Facet in its eyes. Facet shares have fallen more than 20 percent since the Trubion deal was announced.

Geoffrey Meacham, an analyst at J.P. Morgan, said last week that given Facet's cash position, Biogen "would seem to effectively be paying less than $50 million" for Facet.

On Friday, Facet's shares rose 74 percent to close at $15.38 on Nasdaq. (Reporting by Toni Clarke; Additional reporting by Bill Berkrot and Ransdell Pierson; Editing by Gerald E. McCormick, Ted Kerr, Gary Hill)