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Biogen Idec (BIIB - Analyst Report) recently announced that it has acquired a subsidiary of privately held Swiss biotech company Neurimmune. Following this deal, Biogen will acquire worldwide rights to three immunotherapy programs which are currently in the pre-clinical stage.

Terms of the Deal

Per the terms of the deal, Biogen will make an upfront payment of $32.5 million. Besides this, the company could make contingent payments of up to $395 million. The three programs that will become a part of Biogen’s portfolio are focused on the development of novel human antibodies that target central nervous system disorders.

The programs will target a wide range of neurodegenerative diseases like Parkinson’s disease, Alzheimer’s disease and amyotrophic lateral sclerosis (ALS) or Lou Gehrig’s disease. We note that Biogen already has a late-stage candidate in its pipeline for the treatment of Lou Gehrig’s disease.

While Biogen will be responsible for the development of pre-clinical candidates and the commercialization of all products, Neurimmune will be responsible for additional scientific activities related to the lead candidates. Neurimmune will also be responsible for the discovery of back-up candidates through the utilization of its Reverse Translational Medicine technology.

The deal is in line with Biogen’s intention to focus on neurology, which is its area of expertise. Biogen and Neurimmune are already into a deal, signed in 2007, for the treatment and prevention of Alzheimer’s disease. In addition to the Neurimmune agreement, Biogen has collaborations with other companies as well like Roche (RHHBY - Analyst Report), Elan , and Acorda (ACOR - Analyst Report) among others.

Biogen is a key player in the multiple sclerosis market.  We believe the company will continue to retain a leading position in the multiple sclerosis market with key products, Tysabri and Avonex, performing well.

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