Pharmaceutical company Elan has appointed Lehman Brothers to advise it on its options in relation to its multiple sclerosis treatment Tysabri.
This follows Friday's announcement from Biogen that it had received expressions of interest in buying the company. Biogen has a 50% share of Tysabri.
Elan said that under an agreement with Biogen, it had a number of options in the event of a takeover.
It could acquire the remaining 50% stake in Tysabri, sell it, or continue with the existing deal. Elan said it may also look at restructuring the agreement if another company acquired Biogen.
Today Goldman Sachs added Elan to its conviction buy list, noting there were multiple potential outcomes for Elan now that Biogen Idec had put itself up for sale.
The brokerage said Elan's options included buying 50% of Tysabri it does not own, using debt and equity or in conjunction with a partner.
Goldman Sachs has a price target of $29 per American depository receipt on the stock, which rose more than 8 percent to $24.24 in early morning trade on the New York Stock Exchange.
Biogen Idec, which has put itself up for sale, may get bids of around $25-30 billion from several of the world's top drugmakers keen to expand in the hot area of biotech medicine.
Pfizer and Johnson & Johnson could all use the U.S. company to gain scale in protein and antibody drug manufacturing, sales and research, bankers and industry analysts said today.
Roche Holding AG however, may be less interested -- despite its collaboration with Biogen on cancer drug MabThera/Rituxan - since it already has a major presence in biotech medicine production, they said.
GlaxoSmithKline, another player with a potential appetite, is also probably not in the running, as it focuses on other priorities, some industry experts said.
Roche's Swiss rival Novartis AG, meanwhile, has a competing presence in multiple sclerosis which could rule it out from buying Biogen.
Meanwhile, the US Food % Drug Administration says it needs more time to consider Tysabri drug as a treatment for the gastro-intestinal Crohn's Disease.
The FDA is extending its review period by three months, into January 2008.
Elan shares closed up 6.6%, or €1.05, to €16.85 in Dublin this evening.
