DEALTALK-Biogen braces for onslaught from Icahn

By Toni Clarke

BOSTON, Feb 5 (Reuters) - Billionaire investor Carl Icahn sees something in Biogen Idec Inc (BIIB.O: Quote, Profile, Research, Stock Buzz), one of the world's largest biotechnology companies, that many do not -- value as a takeover candidate.

Icahn is seeking three seats on its board in the hope of extracting value from a company some believe has lost its momentum and identity.

"The options are to sell it straight off, or take some time, fix the business, and sell it later for a higher price," said a person familiar with Icahn's plans.

As it stands now, Cambridge, Massachusetts-based Biogen, which sells multiple sclerosis drugs Avonex and Tysabri, and cancer drug Rituxan, is not a compelling candidate for acquisition.

In a recent auction, it failed to find a buyer, and while Icahn claims Biogen sabotaged the sale, industry experts believe the issues run much deeper.

"Biogen is in the doldrums," said Michael McCully, director and senior analyst at the biotech advisory firm Recombinant Capital Inc. "They are a jack of all trades and master of none."

Avonex, Biogen's lead product and cash cow, faces slowing growth and increased competition, and Tysabri sales have been crimped by safety concerns.

"What strategic buyer would be interested in this?" said Christopher Raymond, an analyst at Robert W. Baird. "Avonex is a leader in a class of drugs that is getting long in the tooth and, as other therapies come along, it is the one most likely to get hit."