BioGen Updates Its Spinoff Plans

BioGen (BIIB) has finally chosen a name for its upcoming hemophilia drug focused spinoff. The new company will be called Bioverativ and it will eventually trade on the Nasdaq under the ticker ‘BIVV’. Bioverativ will be a global biotech company ‘focused on the discovery, research, development and commercialization of treatments for hemophilia and other blood disorders.’ It’s growing quickly (that is the ‘exciting’ selling point) and as an independent company it will be focused on developing and commercializing its treatments for Hemophilia A and B. In the biotech space, growth and promise is a critical selling point to raising money.

The company will be led by John Cox who was formerly an EVP at Biogen. According to Mr. Cox, the name Bioverative was chosen because it ‘creates a clear connection to our Biogen heritage and biotech focus. It also conveys our commitment to actively working with patients, caregivers, health care professionals and advocacy leaders to create progress where patients need it most.’ Uhhhh sure it does. Just don’t confuse it with International Paper’s (IP) 2014 spinoff Veritiv (VRTV).

The spin is expected to be competed in early 2017, but it will be interesting to see if it actually takes place. Like an innocent gazelle roaming the vast safari, BioGen is being stalked by larger drug companies who are desperately seeking any type of growth. According to the WSJ, both Merck (MRK) and Allergan (AGN) (and possibly others) have reached out to the company about a potential buyout. Excluding the fast growing Bioverativ, BioGen has a strong position in MS drugs and is spending heavily on research in the Alzheimer’s space forming a portfolio which would enhance many larger company’s offerings. A wouldbe acquirer may want to keep Bioverativ in house instead of spinning it off to shareholders or perhaps the spin will help drop the takeover price. The WSJ does note that BIIG’s pipeline is risky, especially since Alzheimer’s treatments have struggled. Reports are conflicted as to whether or not the company is really interested in pursuing a sale, but some believe the resignation of CEO George Scangos supports the idea that the company is open to a sale.

Regardless, progress on the spinoff continues. A Form 10 for BIIV is expected to be filed shortly and – hold your breath – ‘the Bioverativ logo and visual identity’ will also be revealed soon as well. Visual Identity – this should be fun. The Form 10 is a critical milestone though and should fill in many of the critical information gaps about the company, including its financial position, its promise and possibly even its fundraising needs.

Disclosure: Author holds no position in any stock mentioned.