MedImmune Considering Possible Sale

MedImmune Inc. announced yesterday it has engaged Goldman Sachs to assist it in exploring strategic alternatives, including a possible sale. Analysts estimate the company could be sold for $11-12 billion. MedImmune shares rose 15% to close at $43.63, hitting a 52-week intraday high of $43.77. Potential purchasers could include Merck, Wyeth, Eli Lilly, Abbott, and AstraZeneca plc. MedImmune manufactures Synagis, a respiratory virus medication, and FluMist, an inhalable flu vaccine. The company's board has resisted the idea of a sale in the past, but is apparently responding to overtures by pharmaceutical companies as well as "dissatisfaction with the company's short-term stock price performance" among investors. In February, Carl Icahn's firm disclosed it holds 2.8 million shares of MedImmune, sparking rumors of an eventual sale of the company. David Katz, CIO of investor Matrix Asset Advisors Inc., believes MedImmune could command a price in the $45-50 per share range. Lazard Capital Markets analyst Joel Sendek: "MedImmune offers a mixed bag to potential acquirers..."While the company has a blockbuster franchise in Synagis, the franchise is mature...The flu vaccine franchise is not profitable and the pipeline, though promising, is in early stage development."

Sources: Wall Street Journal, Reuters, SmartMoney
Commentary: Icahn's Golden Touch: MedImmune Up 12% • Biotech Day In Review: MedImmune Puts Itself Up For Sale • Biotech Day in Review: FluMist from MedImmune Outperforms Injected Vaccine
Stocks/ETFs to watch: MedImmune, Inc. (MEDI). Competitors: Bristol-Myers Squibb Co. (BMY), Valeant Pharmaceuticals International (VRX). ETFs: SPDR S&P Biotech (XBI), Biotech HOLDRs (BBH), iShares Nasdaq Biotechnology (IBB)
Conference call transcripts: Q4 2006

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