UPDATE 2-Biogen ups offer for Facet Biotech to $17.50/share

* Offer values Facet at $438.7 million

* Biogen new offer is "best and final"
(Adds statements from Biogen open letter to Facet
shareholders, adds share reaction)

By Toni Clarke

BOSTON, Dec 3 (Reuters) - Biogen Idec Inc (BIIB.O) said on
Thursday it raised its offer to buy Facet Biotech Corp FACT.O
to $17.50 a share from $14.50, saying the new bid represents
its "best and final" offer.

The offer represents a premium of 3.1 percent over the
company's closing share price on Thursday of $16.97, and about
98 percent over the closing price of Facet's stock on Sept. 3,
the day before Biogen's initial offer.

Facet's shares fell 3.4 percent to $16.65 in post-market
trading.

Facet's board rejected the initial bid, which valued the
company at around $355 million. The new offer would value Facet
at around $438.7 million, based on the total number of shares
outstanding as of Oct. 27.

Biogen and Facet are jointly developing a drug to treat
multiple sclerosis called daclizumab and a treatment for solid
tumors, volociximab.

Cambridge, Massachusetts-based Biogen already makes the
multiple sclerosis drugs Tysabri and Avonex.

Officials from Redwood City, California-based Facet were
not immediately available for comment.

Biogen said in an open letter to Facet shareholders that if
they do not accept the all-cash offer by midnight New York City
time on Dec. 16, the offer will expire.

"Over the past three months we have had conversations with
certain Facet stockholders which lead us to believe there is
strong sentiment to bring this process to a conclusion," Biogen
said, without naming the shareholders. "Tendering your shares
into this offer will send an unambiguous message to the Facet
Board: that you, the owners of Facet, want to accept our
offer."

In a previous interview, Facet's chief executive, Faheem
Hasnain, said safety concerns plaguing Tysabri, which has been
associated with a potentially deadly brain infection known as
PML, gives daclizumab the potential to enjoy a "very sizeable
market opportunity."

Biogen said it already owns a 50 percent interest in
daclizumab, and "we do not intend to overpay for the rest."

"Facet does not have the cash to fund its operations beyond
2012, well before completion of the daclizumab clinical
program, without obtaining additional financing, which we
believe will be dilutive," Biogen told Facet investors. "

In August, Facet signed a deal with Trubion Pharmaceuticals
Inc TRBN.O to jointly develop and market Trubion's
experimental drug for a type of blood cancer. Facet agreed to
pay Trubion $20 million up front, and up to $176.5 million more
on reaching certain milestones.
(Reporting by Toni Clarke, editing by Leslie Gevirtz and
Matthew Lewis)
((toni.clarke@thomsonreuters.com; + 617 856-4340; reuters
messaging: toni.clarke.reuters.com@reuters.net))