- The Washington Times - Monday, April 23, 2007

LONDON (AP) — AstraZeneca PLC yesterday announced plans to buy Gaitherburg, Md., drug maker MedImmune Inc. for $15.6 billion and with it, a share of the lucrative global market for vaccines.

AstraZeneca, which has been looking to strengthen its pipeline of future drugs as it faces patent challenges and escalating generic competition, said it will pay $58 a share for MedImmune, a 21 percent premium to the stock’s closing price on Friday.

The deal, which AstraZeneca hopes to close in June, will increase the company’s proportion of biotechnology drugs in its pipeline from 7 percent to 27 percent, and enlarge its total pipeline by 45 projects to 163 projects.

That includes two late-stage products being developed by MedImmune, which has more than 2,300 employees in facilities across the U.S., Britain and the Netherlands.

One product is a follow-up to MedImmune’s flagship childhood respiratory drug Synagis. The second is a refrigerated formulation of its FluMist inhaled influenza vaccine, which will probably be introduced next winter.

AstraZeneca’s decision to enter the vaccine market follows Novartis AG’s purchase of U.S. vaccine maker Chiron Corp. last year. AstraZeneca’s British rival, GlaxoSmithKline PLC, and Sanofi-Aventis SA of France have large vaccine businesses.

Pharmaceutical companies are turning to vaccines to grow because the market has few producers and a reduced risk of generic competition. Interest was spurred by the emergence of the deadly strain of bird flu in Asia with no vaccine to protect against it.

AstraZeneca Chief Executive Officer David Brennan said the bidding process for MedImmune was “ferociously competitive.”

MedImmune had previously resisted calls for a sale from shareholders disappointed with the company’s share price and setbacks on drugs like FluMist. Activist investor and billionaire Carl Icahn recently revealed that he owns slightly more than 1 percent of MedImmune stock, and called the company’s management “lackluster.”

Two weeks ago, MedImmune reversed course and said it would explore a possible sale.

Wayne Hockmeyer, MedImmune’s board chairman and founder, denied that the sale was driven by shareholders.

“That clearly wasn’t a factor,” he said. “In fact, what [the sale] really shows is the management team here has done a fantastic job of creating remarkable value for the shareholders.”

Mr. Hockmeyer said the “vast majority” of MedImmune’s 2,500 employees would remain in their jobs.

AstraZeneca has struggled to regain investor confidence over the past couple of years after a challenge to its cholesterol-reducer Crestor, a clinical trial showing that its lung cancer drug Iressa did not help patients live longer and the rejection by U.S. authorities of its anticoagulant Exanta.

The situation worsened late last year when AstraZeneca dropped development of NXY-059, previously known as Cerovive, a potential blockbuster stroke drug, after it failed to show benefits over a placebo.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide