Biogen Idec Shares Rising—But Is No News Really News?

Even as the stock market took a big swoon yesterday in the wake of a less-than-hoped-for Fed rate cut, Biogen Idec (NASDAQ: BIIB) shareholders didn’t seem to be feeling the pain. The stock rose as high as $77.85 yesterday before closing at $75.39. That was still up $1.42 on a day when the Dow tanked 294 points. Biogen shares rose more in pre-market trading today, and by mid-morning were trading at $77.87, up another $2.88 (3.8 percent). All this with no real news—which is looking like good news to stockholders hoping a buyer has emerged for the firm.

We have no inside information on this. But the rumor mill has been heating up in recent days. Pfizer, as always, seems to be on everyone’s lips. But we got a tip that it was Johnson & Johnson that was getting serious (can’t confirm it, though). Merck and an unnamed foreign buyer are also in the air.

Looking around, here’s a quick synopsis of what’s been said in the past few days:

Yesterday, reported on speculation from various experts. It said that hedge fund superstar Karen Finerman speculated that both Merck (NYSE: MRK) and Pfizer (NYSE: PFE) were eyeing Biogen. Trader Pete “Pit Boss” Najarian “mentioned he saw options traders buying December options and selling July options,” the article reported. “This action indicates to him that a deal will get done for Biogen between $85 and $90 per share.”

But the Merck speculation was quashed by a report this morning from the Wall Street Journal’s Health Blog that CEO Richard Clark had put the kibosh on buying Biogen. “Clark told the Health Blog that Merck isn’t considering a purchase of Biogen…Clark declined to elaborate on Biogen, but broadly, he said Merck might like the idea of acquiring a biotech company that has $2 billion to $5 billion in annual sales and has a research program that’s aligned with Merck’s.”

Our take, which has also been shared by other commentators at various times over the past weeks, is that nothing is likely to happen until the New Year. So Biogen stockholders waiting to collect a little Christmas bonus may have to temper their yuletide spirits.

Update 12/12 at 12:30 p.m.: We spoke to a Biogen Idec spokeswoman who confirmed that the company has no news to report. Biogen shares (as of 12:15 p.m.) had slipped but were still up $1.08, at $76.47.

Bob is Xconomy's founder and chairman. You can email him at Follow @bbuderi

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