UPDATE 3-Abbott to buy Facet for $27/shr, topping Biogen bid

* Deal will cost $450 million

* Adds immunology, oncology products to Abbott pipeline

* Facet shares rise 67 percent in after-hours trading
(Adds analyst comment)

By Deena Beasley

LOS ANGELES, March 9 (Reuters) - Facet Biotech Corp
(FACT.O: Quote, Profile, Research) has agreed to be acquired by Abbott Laboratories
(ABT.N: Quote, Profile, Research) for $27 a share, topping a failed hostile offer of
$17.50 a share made last year by Biogen Idec Inc (BIIB.O: Quote, Profile, Research).

Shares of Facet rose 67 percent after the announcement.

Abbott and Facet said on Tuesday that the cash deal will
cost about $450 million, including a purchase price of about
$722 million less Facet's cash and securities of around $272
million.

"It's not the very last dollar wrung out of the buyer, but
it's 95 pct of the way there," said Merriman Curhan Ford & Co
analyst Mike King. "It more than compensates existing
shareholders for the risk of taking daclizumuab all the way to
the market."

Facet, based in Redwood City, Calif., is jointly developing
multiple sclerosis drug daclizumab with Biogen, which
terminated its takeover offer in December after Facet
shareholders rejected it. Pivotal-stage trials of the MS drug
are slated to start in the second quarter of this year.

The companies also are developing voliciximab as a
treatment for solid tumors and Facet has collaboration deals
for other cancer drug candidates.

"The acquisition brings access to biologics in two key
therapeutic areas, immunology and oncology," Abbott said in a
statement.

BMO Capital Markets analyst Jason Zhang said he was
surprised that Abbott decided to take out Facet given that the
larger company is less established in the MS and neurology
space. "Clearly, Abbott saw significant value in Facet's
oncology pipeline and technology platform," he said in a
research note.

The deal is the latest in a string of takeovers involving
biotech companies, including Astellas Pharma Inc's (4503.T: Quote, Profile, Research)
recent hostile $3.5 billion bid for OSI Pharmaceuticals Inc
(OSIP.O: Quote, Profile, Research). OSI's main product, the Tarceva cancer drug, is sold
in a partnership with Roche Holding AG (ROG.VX: Quote, Profile, Research).

Antibody technology specialist Medarex Inc was acquired
last year by Bristol-Myers Squibb Co (BMY.N: Quote, Profile, Research) at a 90 percent
premium.

"I don't think anybody's going to say Abbott's an idiot for
paying this much," King said.

Abbott, headquartered in Abbott Park, Ill., said the Facet
transaction is expected to close in the second quarter of this
year and will not affect its 2010 earnings outlook.

"This acquisition will further strengthen Abbott's
biologics capabilities and pharmaceutical pipeline," John
Leonard, Abbott's senior vice president, global pharmaceutical
research and development, said in a statement.

Currently, the company's best-known biologic product is
arthritis drug Humira.

Shares of Facet, which closed at $16.21 on Nasdaq, were up
67 percent to $27.08 after hours, while shares of Abbott, which
closed at $54.80 on the New York Stock Exchange, were down a
fraction at $54.45.
(Editing by Carol Bishopric)