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AstraZeneca to acquire MedImmune
25 Apr 2007
AstraZeneca has agreed to purchase the US biopharmaceutical company MedImmune in an all-cash transaction of US $58 per share, for a total price of US $15.6 billion. The deal is the biggest announced by AstraZeneca since its formation as a result of the merger of Astra AB and Zeneca group plc in 1999.
MedImmune has a market capitalization of nearly US $9 billion and last year posted US $1.28 billion in revenue, mostly from the paediatric respiratory drug Synagis (palivizumab). It also markets Ethyol (amifostine) for the treatment of chemotherapy-induced side-effects, and the inhaled influenza vaccine FluMist, which since its launch 4 years ago, has failed to achieve the envisaged blockbuster status. As a result, the company failed to meet some major milestones, stimulating concern from investors and a review of purchase offers.
AstraZeneca plans for MedImmune to merge with its subsidiary Cambridge Antibody Technology to create a fully-integrated biologics and vaccine business. MedImmune will bring expertise in protein engineering, an expanding biologics manufacturing capacity and its own pipeline to the deal, including 2 late stage assets; Numax (motavizumab), a next generation Synagis expected to be filed for approval later in 2007, and a refrigerated formulation of FluMist due to launch by the 2007-2008 influenza season. Upon completion, the deal will expand AstraZeneca’s pipeline by 45 projects to 163 projects, including five vaccines, producing a significant increase in the proportion of biological products in its pipeline from 7 to 27%. With the conclusion of the acquisition expected in June 2007, AstraZeneca is expecting cash earnings enhancement as early as 2009.
This acquisition represents a merger of expertise, and a mutually beneficial expansion of pipeline development capacity. Indeed, the synergistic deal looks set to give AstraZeneca a strengthened long-term position in the biopharmaceutical market.
