Executive Summary

As separate companies, Biogen and Idec could not support their products and at the same time leverage the value of the associated large-molecule development infrastructure to create robust pipelines, balance risk, and thus help assure their future growth. By merging, they will be able to exploit their combined capabilities in large-molecule process development and manufacturing, which will give them both the means to reap the full rewards of organic growth and also the capability and capacity to partner with smaller companies in need of their kind of development expertise. While both companies face pipeline risk, Idec's Rituxan appears certain to continue to propel that firm's growth, justifying its higher P/E. Biogen's growth is slower and less certain. Should it further decline, it will be to the detriment of Idec's investors, who will have to wait at least 5-6 years to see the partnering model develop and the pipeline deepen.