JUNE 23–NEW YORK– Idec Pharmaceuticals Corp. says it would pay $6.4 billion in stock to acquire Biogen Inc. the biggest biotechnology deal in 18 months, merging two companies facing declining sales growth of their blockbuster drugs.

Wall Street failed to embrace the deal, sending shares of each company down 5.1 percent in active trade on the Nasdaq, according to Reuters.

Some investors are concerned Idec may be overpaying for Biogen, given that sales growth of its best-selling product is now on the decline. Others think that Biogen, by settling for only a tiny premium, indicates it is fearful about its earnings prospects.

“The companies are merging out of necessity because sales of their top-selling medicines are stagnating and they have a shortage of early-stage experimental medicines in their pipelines,” said Viren Mehta, a principal of Mehta Partners.

The Biogen-Idec combination would be the largest U.S. biotechnology deal since Amgen agreed in December 2001 to buy Immunex for $10 billion, and follows a recent string of smaller biotech mergers.

The companies are looking to diversify diseases they treat. Cambridge, Massachusetts-based Biogen sells drugs for multiple sclerosis and psoriasis, while San Diego-based Idec targets cancer.

Idec’s main product is Rituxan for non-Hodgkin’s lymphoma, whose U.S. first-quarter sales rose 32 percent to $310 million. That reflects a slowdown from growth of 39 percent in 2002 and 83 percent in 2001.

Biogen’s earnings, meanwhile, are deemed by Wall Street as too dependent on multiple sclerosis drug Avonex, whose sales growth has been hurt by U.S. introduction last year of Serono SA’s rival Rebif.

First-quarter sales of Avonex grew only 3 percent to $274 million, compared with 21 percent growth in the 2002 quarter.