So a month after putting itself on the market, Biogen Idec has decided to take itself back off. This is, I’d say, good news for the company’s employees, since many of them stood to be redundant after a sale. That would especially apply to the company’s medicinal chemists, because even though they have some good people there, anyone buying Biogen probably isn’t interested in their small-molecule expertise.

And I think it’s good news for the biotech industry in general. I think any industry benefits from having a lot of firms competing with each other, trying different ideas and approaches, and keeping each other on their toes in the areas where they overlap. A big consolidation in the biotech field would cut down on what we might as well call its genetic diversity, at least until new companies sprang up with their own ideas.

For whom is this bad news? Well, for starters, how about people who bought into the stock at the elevated levels of the last couple of months? Somebody was holding that bag when the news broke last night, and they must have realized that this would be one of those days. BIIB had been trading at about $75 the day before. It opened at around $54, and staggered in at $58. It's now back to slightly below where it was trading before this whole thrill ride started - but at the height of the takeover talk back in October, it broke $80 for a bit. So, the first paragraph of this blog aside, there must have been a lot of Biogen employees holding company stock and options who got burned yesterday. I hope some of them sold over the past few weeks.

Today’s deflation is also bad news for anyone who stepped into some of the other speculative biotech stocks (Genzyme, for example, down today). You can be sure that the usual suitors (led by Pfizer) looked over this deal and some of the others carefully, fingered their wallets, and thought better of the whole thing. That has to make you wonder if some of the other buyout candidates should be commanding the prices that they’ve been. BIIB has the complication that its largest drugs are also tied up in outside collaborations, making the whole takeover idea more expensive, but still. . .

How about Carl Icahn? I assume that he was hedged against this sort of thing – it would be interesting to see how many put option contracts were open on the stock, for example, or what the short interest was. Icahn and his people have surely been doing this sort of thing way too long to get caught too badly when a potential deal falls through. And if he was really sure that the company was undervalued, hey, now’s the time to pick up some more shares.

So, now we wait until the next round of speculation. Many of the large companies in the industry still probably need to shore up their portfolios, and we’ll surely have a recurrence of Merger and Acquisition fever. And that brings up another set of people that are unhappy about todays’s news: the investment bankers. All those fees. . .those fees. . .they just evaporated. My condolences, guys. Right.