Friday, April 13, 2007

MedImmune is for Sale

This is from the Associated press:


MedImmune considering sale, stock up


CHEVY CHASE, Md. — Drug company MedImmune Inc. said Thursday it is willing to consider takeover offers, reversing its stand against a sale because of interest from big pharmaceutical companies and investor unhappiness with the company's performance.

MedImmune said its board of directors authorized company management to gauge interest from potential bidders. It also hired Goldman Sachs & Co. and the law firm Dewey Ballantine to help with a possible sale.

MedImmune shares jumped more than 13 percent in late afternoon trading on the Nasdaq Stock Market.

The company, based in Gaithersburg, has a market capitalization of nearly $9 billion and posted $1.28 billion in revenue last year, mostly from its childhood respiratory drug Synagis. MedImmune also makes the inhaled influenza vaccine FluMist. A company spokeswoman did not immediately return a request for comment.

But the company's recent performance has rankled some major shareholders, who said MedImmune should consider selling itself because its failure to meet some major milestones has hurt investors.

The shareholders' concerns centered on a disappointing launch of FluMist, once thought to be a blockbuster drug that fizzled when it was released four years ago because of problems with storage, price and limitations on who could use it. MedImmune also revealed in February a delayed filing for federal approval of a new version of Synagis, helping to push its stock down sharply.

In the past, MedImmune has deflected proposals that it should sell, saying it would continue with its business plan rather than find a buyer. It reaffirmed that position in February when investor Matrix Asset Advisors urged it to explore a sale. Billionaire investor Carl Icahn, who often pushes for major changes at companies he invests in, also said in February that he held 2.8 million MedImmune shares, slightly more than 1 percent of the company's stock.

David Katz, president of Matrix, which owns 1.79 million shares of MedImmune, said he was pleased MedImmune has finally agreed to consider a sale and estimated the company could be sold for between $45 to $50 per share.

Icahn's involvement likely helped convince MedImmune's board to weigh a sale, Katz said.

"Even if he wasn't terribly active behind the scenes, just the specter of him getting active probably was a good motivator," Katz said.

MedImmune said earlier this week that it expects earnings to nearly triple when it reports second quarter results in May. The company also recently released results of a study showing that a new formulation of FluMist may be more effective than the traditional shot in children, which will likely boost its chances of approval by federal regulators this year.

MedImmune said it will not provide any information on a possible sale until it has a deal or decides to go ahead as a stand-alone business. The company said in a statement that "there can be no assurance that an acquisition" will occur.

Shares of MedImmune traded up $5.13 to $42.97 in afternoon trading Thursday, well above the stock's 52-week high of $38.34.

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