Biogen could become the biggest biotech takeover target in years — here's why

Thomson Reuters

The biggest biotech merger in years may be upon us. 

The Wall Street Journal's Dana Mattioli, Jonathan Rockoff and Dana Cimilluca report that biotechnology company Biogen is drawing takeover interest from Merck and Allergan.

If it happens, it'd be the biggest deal since 2008 when Roche acquired Genentech.

The Cambridge, Massachusetts-based Biogen makes drugs that treat multiple sclerosis and hemophilia, and its main focus overall is on neurological and autoimmune diseases, as well as rare diseases.

Here's what makes it look like such a promising target:

• On Monday, Biogen exercised its option to globally sell a promising drug that's in development to treat spinal muscular atrophy from Ionis Pharmaceuticals. The drug, nusinersen, succeeded in a late-stage trial, the companies announced Monday. "Nusinersen could provide a growth opportunity for BIIB, and provides a bright spot after several late-stage pipeline setbacks over the past year," Jefferies analyst Dr. Brian Abrahams said in a note Monday.
• Biogen's CEO George Scangos announced he was stepping down on July 21 after about six years at the helm.
• The company's biggest drug, Tecfidera, which treats MS, has lost market share to competitors. 
• Biogen's pipeline is full of candidates: It's got everything from Alzheimer's drugs to a treatment for non-Hodgkins lymphoma.

The two companies that might be in talks with Biogen — Merck and Allergan — have been big on deals for the last few years. Take Allergan: The company was headed for a mega-merger with Pfizer, but that was quashed earlier this year. Allergan's own pipeline covers seven therapeutic area, which in part covers conditions of the central nervous system, like migraines and Alzheimer's disease.

Merck, for its part, has been hit by competition in the diabetes market, and picked up steam with its cancer immunotherapy drug Keytruda, but might be interested in picking up more along its pipeline. The company is currently developing everything from cancer to Alzheimer's to HIV drugs. 

Representatives from Merck and Biogen did not immediately respond to request for comment. Allergan declined to comment. 

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