Feuerstein's Biotech-Stock Mailbag

I've pulled just two letters from the Biotech Mailbag this week -- on Biogen Idec(BIIB Quote) and Isis Pharmaceuticals(ISIS Quote) -- because my responses turned out to be rather lengthy. But these stocks are very newsworthy, so enjoy.

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Carl M. writes: "Longtime reader and holder of Biogen Idec. Through all the ups and downs. Are you hearing anything about Icahn's plans or any interest in the sale of the company? As you know it popped to $84 and has pulled back on no news. Just would appreciate anything you are hearing on the company."

The problem with an investment thesis that hinges on a hoped-for-but-not-yet-consummated acquisition is that you have to sweat out the volatility that comes with the rumors and speculation.

As Carl rightly points out, Biogen Idec surged above $84 after the company announced Oct. 12 that it would entertain sale offers. But nothing's happened yet, and some investors are getting antsy on chatter that the asking price might be too high, or that some prospective bidders are walking away.

The stock fell to $69 on Tuesday, then bounced back above $73 intraday Thursday. On Friday, it closed at $70.04. Like I said, volatility.

I've laid out some pricing scenarios for a Biogen Idec acquisition already. Generally, the consensus seems to be that the company could be taken out in the $80-plus price range.