AstraZeneca to Buy MedImmune for $15.6 Billion

British pharma AstraZeneca plc has announced it will purchase MedImmune Inc. for $15.6 billion. AstraZeneca will pay $58 per share in cash, representing a premium of approximately 53% to MedImmune's share price on April 11, the day before news broke that the U.S. biotech company was for sale. The deal is expected to close in June. In February, takeover speculation was fueled by the disclosure that activist investor Carl Icahn had purchased 2.8 million shares of MedImmune, a company known primarily for its nasal flu vaccine FluMist. Icahn had threatened to launch a proxy fight if the company did not find a purchaser. The transaction will give AstraZeneca 45 new products for its pipeline, a boost it sorely needs after a series of research setbacks. Those products include a refrigerated version of FluMist and the next-generation version of Synagis, an antiviral treatment for babies. AstraZeneca forecasts the transaction will boost earnings in 2009 and achieve $500 million in synergies by that year. It plans to combine MedImmune with recently acquired Cambridge Antibody Technology to create an integrated biologics and vaccine business.

Sources: Reuters, MarketWatch, Bloomberg
Commentary: Biotech Day In Review: MedImmune Puts Itself Up For Sale • Icahn's Golden Touch: MedImmune Up 12% • MedImmune Considering Possible Sale
Stocks/ETFs to watch: MedImmune Inc. (MEDI), AstraZeneca plc (AZN). 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: MedImmune Q4 2006

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