Aug. 25 (Bloomberg) -- Billionaire investor Carl C. Icahn may increase his stake in Biogen Idec Inc. because he says the company is undervalued and a takeover candidate, according to a person familiar with Icahn's thinking.

The Federal Trade Commission cleared the New York investor to buy more shares in Biogen, the world's largest maker of drugs for multiple sclerosis, according to a message posted yesterday on the agency's Web site.

A big drugmaker with expiring patents on top-selling medicines may want to buy Biogen, the person said. Icahn bought shares in MedImmune Inc. before helping to force a sale of the biotechnology company in April to AstraZeneca Plc for $15 billion, double the market value a month earlier. Biogen is valued at 27 times profit, down from 48 times in February 2005, when its multiple sclerosis drug Tysabri was withdrawn because of a link to rare brain infections.

``As a matter of policy, we don't comment on the activities of specific investors,'' Biogen spokesman Tim Hunt said in a telephone interview. ``The management of Biogen is focused on building value for all the company's owners by continuing to execute its strategic plan.''

The Cambridge, Massachusetts-based company rose $2.92, or 4.9 percent, to a 52-week high of $62.89 yesterday in Nasdaq Stock Market composite trading. The stock has risen 28 percent this year and 85 percent since the temporary withdrawal of Tysabri two years ago.

MedImmune Investment

Earlier this month, Icahn reported acquiring 2.74 million shares, or almost 1 percent, of Biogen. A call to Icahn's office in New York after business hours yesterday wasn't returned.

Icahn increased his holdings of MedImmune, based in Gaithersburg, Maryland, by almost 50 percent before the company agreed to be bought by AstraZeneca. He had 2.78 million shares at the end of 2006, raising his stake to 4.13 million, or 1.7 percent, as of March 31, according to data compiled by Bloomberg.

The purchases paid off. The shares traded as low as $30.64 on March 5 then doubled in the next month to $58, when MedImmune, the maker of the FluMist nasal-spray influenza vaccine, agreed to be bought by London-based AstraZeneca.

ImClone

Besides its MS drugs, Biogen co-markets the cancer treatment Rituxan with Genentech Inc., based in South San Francisco, California. Rituxan, a treatment for non-Hodgkin's lymphoma and rheumatoid arthritis, had $2.1 billion in sales in 2006.

Biogen is the No. 5 U.S. biotech company ranked by sales, with $2.7 billion in revenue in 2006, based on data compiled by Bloomberg. It follows Amgen Inc., Genentech, Genzyme Corp. and Gilead Sciences Inc.

In October, Icahn took control of the board at another large biotech company, New York-based ImClone Systems Inc., the maker of the colorectal cancer drug Erbitux. Icahn ousted directors and ImClone's interim chief executive officer, criticizing them for failing to support research needed to expand the approved uses for Erbitux and boost its sales. ImClone shares, which fell 4 cents to $32.17 yesterday, have gained 20 percent this year.

Icahn also owns a 7.9 percent stake in Telik Inc., a biotech based in Palo Alto, California, and has 3.8 percent of Adventrx Pharmaceuticals, a drug developer in San Diego.

To contact the reporter on this story: Luke Timmerman in San Francisco at ltimmerman@bloomberg.net

Last Updated: August 25, 2007 15:48 EDT