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12:00 AM
Sep 14, 2009
 |  BioCentury  |  Finance

Ebb & Flow

Besides rejecting a $14.50 per share takeover bid from Biogen Idec Inc. (NASDAQ:BIIB) last week, Facet Biotech Corp. (NASDAQ:FACT) made a couple of other moves to strengthen its position. The board put a poison pill in place and added a new member with recent experience facilitating an acquisition.

Under a hostile takeover, the poison pill would essentially double the common shares of each Facet shareholder. The provision offers 1/1,000 of a preferred share for each common share held at Sept. 21. Each preferred share would convert into 1,000 common shares.

The poison pill would be triggered if any acquirer accumulates 15% or more of the company during the next year without board approval. The only shareholder that held more than 15%, The Baupost Group, would have been grandfathered in had it not reduced its stake on Sept. 4, a few days before the poison pill provision was put in place on Sept. 8.

Baupost had 4.4 million Facet shares (17.8%) at June 30 but reduced its holdings to 14.3% by selling 1.2 million shares at $15.39-$15.50. The stock closed up $6.56 (74%) to $15.38 on Sept. 4.

Another Facet shareholder, Biotechnology Value Fund, disclosed last week that between several different funds and the personal holdings of the firm's founder, Mark Lampert, it held 3.7 million shares (14.998%) at Sept. 8.

Last week, Facet's board also added Hoyoung Huh, president and CEO of BiPar Sciences Inc., a wholly owned subsidiary of sanofi-aventis Group (Euronext:SAN; NYSE:SNY). The pharma announced its acquisition of the cancer company for up to $500 million in April, a little more than a year after Huh joined (see BioCentury, April 20).

Facet also bought 2.2 million shares (11%) of Trubion Pharmaceuticals Inc. (NASDAQ:TRBN) worth $10 million last week, according to an SEC filing. The purchase was part of a deal announced on Aug. 28, which Biogen Idec said reduced the value of Facet.

Facet had already turned down Biogen Idec's $15 a share offer. After the Trubion news, the big biotech then came back with an unsolicited $14.50 offer (see BioCentury, Sept. 7).

On the week, Facet shares gained $0.94 to $16.32, while Trubion shed $0.10 to $5.38 and Biogen Idec lost $0.17 to $50.84.

Keeping pump primed

Now that the quiet period has expired, A.J. Kazimi, CEO of Cumberland Pharmaceuticals Inc. (NASDAQ:CPIX), provided Ebb & Flow with details of the company's $85 million IPO in August. He said one of the keys was keeping its SEC filing current with quarterly updates instead of withdrawing it.

Cumberland filed in May 2007. When the market began to turn south in late summer of that year, the company was faced with the "decision to either withdraw, price the deal at a significant discount or remain in registration," Kazimi said. Cumberland chose to remain in play.

During public market meltdown, the company strengthened its story, increasing revenue on its two marketed products by 25% in 2008 over the prior year. Cumberland had FY08 revenue of $35.1 million and $19.2 million in...

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