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A mutually-beneficial merger
Idec Pharmaceuticals of San Diego, California acquires Biogen of Cambridge, Massachusetts in a $5.8 billion transaction. The merged organization is headquartered in Cambridge. Called Biogen Idec, it becomes the third largest biotechnology company in the United States. The former head of Biogen, James C. Mullen, will serve as CEO. Idec chief William Rastetter becomes Executive Chairman. Rastetter is optimistic about the companies’ combined potential. “Biogen Idec," he says, "has become an incredible powerhouse.”
According to the New York Times, the strategy of the deal is straight from the “Big Pharma playbook." It is an effort to combine talent, technology, and resources to generate commercial products. Some analysts are critical of the acquisition, commenting that investors are impressed by great products, not “synergies and cost-cutting.”
Both companies have developed a billion dollar drug. Biogen's Avonex® for multiple sclerosis was released in 1996; Idec’s Rituxan® for non-Hodgkin’s lymphoma was approved in 1997. Although both firms have made commercial progress in the interim, neither has managed to duplicate the blockbuster feat. The merger brings hope that the combined company will be able to fill product pipelines with valuable new drugs for autoimmune and cancer markets.