Biogen didn't give a reason why it never found a buyer, but the biggest obstacle was probably the buyout provisions for two of its lead drugs, Rituxan and Tysabri. In the event of a change of control at Biogen, Genentech
Those provisions effectively meant that any Biogen acquirer would either get a stripped-down Biogen without its two most interesting assets or would be paying billions more above the acquisition price to get full control of Rituxan and Tysabri. The former scenario made Biogen a less attractive acquisition target, and the latter made Biogen too expensive for pretty much any drugmaker, save perhaps Pfizer
The Biogen saga began in October, when investor Carl Icahn disclosed that he had made an informal $23 billion "expression of interest" bid in the company. Then on Oct. 12, Biogen revealed that it was seeking a buyer.
Shares surged from the mid-$60 range to a high of around $84 on the news. Investors figured that biotech fever would take hold at Biogen the way it had with MedImmune and AstraZeneca
Icahn has had a mixed record in biotech. Some of his investments, such as ImClone Systems
Does this lack of a buyer mean that the biopharma buying frenzy is over among big pharmas? Probably not, considering that biologics have an important advantage -- namely, generic competitors have a harder time gaining entry in biologics than in comparable small-molecule drugs. In addition, plenty of other biopharma assets remain available at cheaper prices.
The lack of a buyer in this case meant that Biogen was apparently just too big and expensive for any takers. As for what investors should do, I mentioned it before when Biogen put itself up for sale. It's virtually a pharma and biopharma golden rule at this point: Buying shares of a drugmaker based on the proposition of a buyout is often a losing strategy.
Fool contributor Brian Lawler does not own shares of any company mentioned in this article. Pfizer is an active Inside Value pick. Biogen is an active Stock Advisor pick. The Fool has an A-plus disclosure policy.