April 30, 2007

Volume 85, Number 18

p. 7

Biologics Pursuit

Pharmaceuticals: AstraZeneca acquires MedImmune

Michael McCoy

CONTINUING ITS PUSH into the business of making protein-based drugs, U.K.-based AstraZeneca has agreed to acquire MedImmune, based in Gaithersburg, Md., for about $15.6 billion.

MedImmune

AstraZeneca will gain MedImmune's labs and headquarters in Gaithersburg, Md.

Although not as well-known as leaders such as Genentech and Amgen, MedImmune is a formidable presence in the biotechnology industry, posting revenues last year of $1.3 billion and earnings of $75 million. Its main product is Synagis, a treatment for respiratory syncytial virus that had $1.1 billion in sales last year.

AstraZeneca says the acquisition "significantly accelerates" its strategy of becoming a large player in protein-based pharmaceuticals, or biologics, which are typically produced in microbial or mammalian cells. In contrast to many of its global drug company peers, AstraZeneca today only markets small-molecule compounds made via chemical synthesis.

AstraZeneca

Brennan

The company initiated the biologics push last year when it acquired fellow U.K. firm Cambridge Antibody Technology for about $1.3 billion. At the time, AstraZeneca CEO David Brennan said he was looking for more deals in the biopharma sphere. His stated goal was for a quarter of the firm's new drug candidates to be biologics by 2010.

John Patterson, AstraZeneca's executive director for development, told stock analysts in a conference call that the MedImmune deal will increase the proportion of biologics in his firm's pipeline to 27% from 7% today. "MedImmune really brings all the pieces of the biologicals jigsaw together for us overnight," he said.

In addition, Patterson noted, the purchase takes AstraZeneca into the business of vaccines, a newly attractive field in which drug companies such as Novartis and Pfizer have been increasing their presence. MedImmune's second-biggest-selling product, with sales last year of $36 million, is the inhaled flu vaccine FluMist.

MedImmune put itself into play on April 12 by announcing that it had been approached by unnamed major drug companies. AstraZeneca beat the competition by agreeing to pay $58.00 per share, a 53% premium over MedImmune's closing price on April 11.

Chemical & Engineering News

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