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BIOGEN INC. 8-K Report, Material Agreement (Feb 6, 2013)

Filed February 6, 2013For Securities:BIIB

Summary

Biogen Idec Inc. (BIIB) has announced a significant strategic move via an 8-K filing on February 6, 2013, detailing an Asset Purchase Agreement to acquire full ownership of TYSABRI® (natalizumab) from Elan Pharma International Limited and Elan Pharmaceuticals, Inc. This acquisition, expected to close subject to regulatory approvals including Hart-Scott-Rodino, involves an upfront cash payment of $3.25 billion, to be funded by existing cash reserves. This transaction represents Biogen Idec's move to consolidate control over TYSABRI, a key product, and terminate the existing ANTEGREN collaboration agreement that previously split global profits 50/50. The acquisition also includes all associated strategic, commercial, decision-making, and intellectual property rights, positioning Biogen Idec for greater control and potential upside from TYSABRI's future sales. The deal also includes a structure of contingent payments based on TYSABRI's net sales post-closing.

Key Highlights

  • 1Biogen Idec to acquire full ownership of TYSABRI® (natalizumab) from Elan.
  • 2Upfront cash payment of $3.25 billion, to be funded by existing cash reserves.
  • 3Termination of the 50/50 profit-sharing ANTEGREN Development and Marketing Collaboration Agreement with Elan.
  • 4Transaction includes all strategic, commercial, decision-making, and intellectual property rights related to TYSABRI.
  • 5Contingent payments to Elan based on future global net sales of TYSABRI, structured at 12% for the first 12 months post-closing, then 18% on annual net sales up to $2.0 billion, and 25% on sales exceeding $2.0 billion.
  • 6Completion is subject to customary regulatory conditions, including Hart-Scott-Rodino Act waiting periods.
  • 7Press release and investor presentation slides related to the transaction are attached as exhibits.

Frequently Asked Questions

The primary purpose of this 8-K filing is to announce Biogen Idec Inc.'s entry into a material definitive agreement to acquire full ownership of TYSABRI® (natalizumab) and related rights from Elan.

The upfront cash payment of $3.25 billion is expected to be funded using Biogen Idec's existing cash reserves.

The contingent payments mean that while Biogen Idec gains full control, Elan will continue to receive payments based on TYSABRI's future sales performance. The structure rewards higher sales with increased percentage payments to Elan, while Biogen Idec retains the majority of profits and takes on the commercial risk and reward.

The transaction is subject to the expiration of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, along with other customary regulatory and closing conditions.