Drama Runs in Facet Biotech's Family -- Just Ask Parent PDL BioPharma

Last Updated Oct 26, 2009 7:22 PM EDT

It's not unusual for biotech companies to have contentious negotiations with potential acquirers. Or for activist investors to demand liquidation. Or for senior execs to leave in a huff. Or for a company to suffer through product failures, or reorganizations, or even a failed attempt to sell itself.
But PDL BioPharma has to be wondering: why does everything happen to us?

PDL's latest drama is tied to Biogen Idec's attempts to acquire Facet Biotech (a company PDL spun-out last year). The two parties have traded terse words as Biogen Idec offered to buy Facet, was rebuffed, voiced its displeasure with Facet's business development strategy, tried to acquire the company at a lower price, and was rebuffed again.

The ongoing Biogen Idec squabble is not Facet's first brush with scandal. After spinning-out from PDL in December, the biotech restructured and cut about a third of its workforce in January. Then in March, shareholder Roderick Wong called for Facet to liquidate and return at least $15 per share to its investors (he later backed down).

Shareholder battles are nothing new for PDL. Back in 2007, activist hedge fund Third Point called for the termination of PDL CEO Mark McDade, a shift in board composition and potential liquidation of the company. McDade was cleared of improper personal conduct and breach of fiduciary duty, but he resigned anyway and PDL put itself up for sale.

Unfortunately no one was buying, so PDL adopted a new game plan. Much of Third Point's beef with the company had been over the squandering of its royalty stream, so PDL decided to separate that royalty stream from its biotech assets, which were spun-out as Facet.

Whew -- sprinkle in some layoffs, drug failures and a patent fight (yes, that all happened), and you've got a drama worthy of airing on TNT.

But maybe now, with the spin-out well behind it, PDL can quietly collect its revenues and leave the drama to the kids. Maybe.

  • Trista Morrison

    Trista Morrison is a staff writer at BioWorld Today, a daily newspaper that