After refusing to up its bid for Facet Biotech (Nasdaq: FACT), conceding the company to Abbott Labs (NYSE: ABT), Biogen Idec (Nasdaq: BIIB) has decided that the best use of its cash is to buy … itself. In conjunction with its first-quarter earnings, Biogen announced that it plans to repurchase and retire $1.5 billion worth of its shares.

Even after recently buying back $1 billion worth of shares, Biogen still had $2.2 billion in cash, cash equivalents, and marketable securities at the end of the first quarter.

Of course, Biogen will be able to buy more shares today than it could yesterday, since shares are down after this morning's report of rather poor performance in the first quarter. Both revenue and adjusted earnings rose year over year, but not as much as analysts were expecting. The biggest culprit is multiple sclerosis drug Tysabri, still saddled with decelerating growth.

Biogen and marketing partner Elan (NYSE: ELN) added 1,500 new Tysabri patients in the first quarter, compared to adding 2,600 patients in the fourth quarter of last year. This marks the third quarter in a row of declining patient growth.

Tysabri's label was recently changed to indicate that the longer patients remain on the drug, the greater their risk of a potentially deadly brain infection called progressive multifocal leukoencephalopathy (PML). Even though Tysabri is a more effective drug, patients are comfortable with inferior but safer options such as Teva Pharmaceutical's (Nasdaq: TEVA) Copaxone, Novartis' (NYSE: NVS) Extavia, and Rebif from Pfizer (NYSE: PFE) and EMD Serono.

There's some indication that doctors and patients may be shrugging off the data after digesting it for a while, however. Biogen said that it saw about 190 new patients start therapy in each week of March, which would work out to about 2,500 patients per quarter.

In order for Biogen and Elan to realize the full potential for Tysabri, the two companies need to identify patients who are most likely to get PML. Removing the high-risk patients will cost the company money, but it will make the low-risk patients more comfortable with using Tysabri.

The disease is caused by the JC virus, which sits dormant in many people and only reactivates if they have weakened immune systems from AIDS or a drug treatment like Tysabri. The companies are running a clinical trial on a test for the JC virus, which could help determine whether patients are likely to develop PML. Unfortunately it'll take about two years until the data is in.

Until then, Biogen may just remain cheap enough to justify buying itself.