Biogen Idec Inc. (BIIB) went public with a $356 million unsolicited offer Friday for drug developer Facet Biotech Corp. (FACT), after claiming that the smaller company shunned earlier attempts to reach a deal.

The $14.50-a-share offer for the Redwood City, Calif., company brings a 64% premium to Thursday's closing price. But despite the price, Facet is a cash-rich biotechnology company and it seems ready to resist the overtures from Biogen.

Wall Street seems to expect an increased offer, based on Facet's recent shares price of $15.87, up 79%, after being halted for news earlier Friday. Biogen shares rose 2.1% to $50.97.

In a statement, Facet Biotech said its board will promptly respond to Biogen's offer and urged shareholders to await its response. The company confirmed that the board had rejected Biogen's previous offer after consulting with financial and legal advisers.

Notably, the offer by Biogen, a Cambridge, Mass., biotechnology company, is close to the amount of cash that Facet holds on its balance sheet, which may make it hesitate to agree such a deal.

"That is not going to get a deal done," said BMO Capital Markets analyst Jason Zhang, who has a $14 price target on the company, based mostly on its cash holdings.

"Our belief is that the price we are offering ascribes appropriate value," said Biogen spokeswoman Jennifer Neiman.

In an August letter to Biogen Chief Executive James Mullen rejecting the initial bid, Facet's Faheem Hasnain said that the offer places "negligible value" on the company when considering its cash holdings.

Hasnain stressed that the two companies recently advanced daclizumab into late-stage trials, and it has multiple products in clinical trials, along with protein-engineering technologies. Sanford Bernstein analyst Geoffrey Porges noted that Hasnain is formerly the head of Biogen's oncology and rheumatology business unit, and led Biogen's involvement for Biogen's collaboration with PDL prior to the Facet spinoff.

Aside from the cash holdings and clinical programs, Biogen said it factored Facet's obligations under a lease agreement and its recent collaboration with Trubion Pharmaceuticals Inc. (TRBN) that could pay out up to $176.5 million in milestone payments.

In April, Facet disclosed that it had "significant lease and other obligations" in responding to activist shareholders who had pushed for the liquidation of the company, citing its large cash reserves.

Facet was spun off from PDL BioPharma Inc. (PDLI) in December in order to separate the company's biotech assets from its royalty-producing assets. PDL is essentially a shell company that produces revenue from its patent portfolio and license agreements.

After the spin-off, Facet had $405 million in cash in order to fund its operations for a number of years while it attempts to develop its pipeline. It has projected spending $110 million in 2009, and as of June 30 had $371.1 million.

That amounts to $15.12 a share in cash, based on its 24.5 million shares outstanding. Under the company's collaboration deal with Trubion Pharmaceuticals, Facet will pay $20 million upfront and make a $10 million investment in Trubion.

Zhang declined to estimate how much Biogen might have to pay to close the deal for Facet, but said he believes a tie-up makes sense because of the companies' previous relationship.

The two companies have worked together since 2005 on treatments for multiple sclerosis and solid tumors.

According to Biogen, it first expressed interest in Facet in mid-August, offering $15 a share and urging it to not undertake any material transactions.

Biogen contends that Facet rejected its offer and subsequently signed the deal with Trubion.

Biogen said it believes that the Trubion agreement "reduces the value of Facet, as apparently do Facet's investors," citing a 22% drop in its stock price since the deal. It also pointed to the deal in explaining its lowered $14.50-a-share offer.

"Completion of the deal is far from certain at this point given its unsolicited nature," Porges wrote in a note to clients, noting that Facet's Trubion deal could be interpreted as an attempt to deter an acquisition.

-Thomas Gryta, Dow Jones Newswires; 212-416-2169; thomas.gryta@dowjones.com