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Evaluating a Potential Acquisition of Biogen Idec

Evaluating a Potential Acquisition of Biogen Idec. Anna Arnold, Samina Islam, Sean Landrette, Duc Nguyen November 30 th , 2007. Pfizer Should Acquire Biogen Idec . Pfizer’s Alliance Options Biogen’s Pipeline Drugs Benefits and Risks of Acquisition Valuation and Purchase Price

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Evaluating a Potential Acquisition of Biogen Idec

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  1. Evaluating a Potential Acquisition of Biogen Idec Anna Arnold, Samina Islam, Sean Landrette, Duc Nguyen November 30th, 2007

  2. Pfizer Should Acquire Biogen Idec • Pfizer’s Alliance Options • Biogen’s Pipeline Drugs • Benefits and Risks of Acquisition • Valuation and Purchase Price • Recommendation

  3. Pfizer Present Standing Uncertainties and Setbacks • Divestiture of Exubera inhaled-insulin • - $2.8 billion charge • Lackluster share performance • - down 7% this year • Encroaching patent expirations • - includes Lipitor and Viagra • - Ranbaxy patent challenge Goals and Priorities • Maintain financial performance and generate shareholder value • Diversify portfolio and renew focus on R&D

  4. Strategic Alliance Options Acquire exclusive partnership/ rights 1 Market Superiority 2 Parity with Competitors Licensing options

  5. Strategic Alliance Recommendation Acquire exclusive partnership/ rights 1 Market Superiority 2 Parity with Competitors Licensing options • Enables Pfizer to amass the highest quality portfolio of compounds • Fulfill unmet needs of people with MS to 2010 and beyond • Places Pfizer at a competitive advantage and forefront in biologics • - minimizes threats from generic developments

  6. Biogen IDEC: Opportunity Knocks • Unrivaled leadership in MS with promising late-stage pipelines AVONEX - 11 years of strong performance with 12% growth y-to-y 40% TYSABRI - 17K patients to reach 100K milestone by 2010 RITUXAN - $811 revenue with 14% growth since 2005, including additional indications BG-12 RITUXAN 2H7 oral VLA-4 daclizumab Phase II • Unsurpassed biologics capability • Numerous intellectual properties

  7. Autoimmune Activation Migration and Amplification Demyelination and Nerve Damage Many Treatment Strategies in Multiple Sclerosis Immune Modulation Tissue Repair

  8. Biogen’s Pipeline Offers Mechanistic Diversity BIOGENCOMPETITOR MECHANISMAvonex Rebif/Betaseron Interferon,Immune ModulationRituxan/Zevalin B-cell depletion, Immune ModulationTysabri/CDP323 Anti-Migration, Immune ModulationFumaderm/BG-12 Unknown Target, Immune Modulation Daclizumab Anti-IL2, Immune Modulation Copaxone T-cell (anti-inflamatory), Immune Modulation FTY720 White Cell Egress, Immune Modulation RDP58 Anti-inflammatory,Immune Modulation Novantrone Immune Cell Depletion, Immunosuppressive Anti-Lingo/Nogo Re-Myelination, Tissue Repair

  9. The Benefits of Acquiring Biogen IDEC Risks Benefits • Demand for MS drugs will only increase with • aging population and increased life expectancy • improved diagnostic tools Possible product obsolescence with technological innovation • Pipeline drugs may never reach full market potential • halted clinical trials • lack of regulatory approvals • Prohibitive costs of commercialization Biogen has expertise in MS Pfizer’s strength in marketing can penetrate the untapped market Biogen has MS drugs in late stages of clinical trials that may have multiple indications Complexities of partnerships and merging of corporate operations Biogen’s drugs align with Medicare coverage

  10. Biogen’s Revenues and Profits Have Been Steadily Increasing

  11. Pfizer Should Bid for Biogen IDEC

  12. Questions?

  13. Biogen’s Solvency Ability and Growth Rates are High

  14. Biogen’s Revenues and Profitability Have been Steadily Growing

  15. Market Capitalization

  16. Liability, Equity, TEV, Market Cap Total Liability includes Total Debt, Minority Interest and Pref. Equity. Net Liability includes Total Liability, net of Cash and Short Term Investments. TEV includes Market Cap and Net Liability. Total Capital includes Common Equity and Total Liability.

  17. Biogen MS Product Pipeline

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