MedImmune hires Goldman to find buyer for company
By Jeffrey Goldfarb and Ben Hirschler
LONDON (Reuters) - Biotechnology company MedImmune Inc. MEDI.O has hired Goldman Sachs to explore a sale of the company, which industry analysts said could fetch $11 billion to $12 billion.
Confirming what sources had earlier told Reuters, the group said on Thursday it had decided to seek bids following indications of interest by big drugmakers and dissatisfaction over the stock price performance among some investors.
It added the process was well under way but there was no guarantee that a sale would be concluded.
One person familiar with the situation said a speedy disposal looked likely.
"I think a transaction will happen in the next four to five weeks," said the source, who requested anonymity because of the confidential nature of the process.
MedImmune has been the subject of takeover speculation for some time, with talk of a bid intensifying since billionaire investor Carl Icahn disclosed in February he owned 2.8 million shares of the company.
The stock had already risen 20 percent since then and gained as much as 14 percent in early trade on the Nasdaq on Wednesday to hit a five-year high of $43.18, valuing the business at just over $10 billion. Other biotech shares also rose on the news.
MedImmune, one of the larger independent biotech firms in the United States, is best known as the maker of the nasal spray flu vaccine FluMist, but it also has two other marketed products, Synagis for infectious respiratory disease and Ethyol for reducing chemotherapy side effects.
The company announced on Monday it expected first-quarter earnings to have tripled, driven by higher-than-expected sales of Synagis, which has had reimbursement problems in the past.
One person familiar with the situation said MedImmune should see good demand from bidders, since it is a relative rarity among biotech firms in already having commercial products.
That may make it attractive to a number of large drugmakers looking to bolster their portfolios.
David Katz, chief investment officer at Matrix Asset Advisors, a shareholder in MedImmune who has been pushing for the sale of the company, welcomed the move.
"It makes enormous sense in terms of maximizing shareholder value," he said.
"Goldman is expert in running strategic reviews ... The company should be sold for a healthy price, probably starting at $45," he added.
John Sonnier, an analyst with William Blair, estimated MedImmune was worth between $45 and $50 a share.
Katz noted that many big drug companies, facing a wave of patent expirations, had expressed interest in biotech as a way to build their businesses in infectious diseases, oncology and value-added vaccines, all areas where MedImmune has products.
Potential acquirers could include Merck & Co. Inc. (MRK.N), Wyeth WYE.N, Eli Lilly and Co. (LLY.N) and Abbott Laboratories Inc. (ABT.N) among U.S. pharmaceutical groups, other sources said.
In Europe, Novartis AG (NOVN.VX) is seen by some as a potential suitor, though one person familiar with the situation said the Swiss firm was not interested.
Novartis earlier on Thursday announced it was selling its Gerber baby-food business for $5.5 billion to Nestle SA (NESN.VX) to focus fully on healthcare.
AstraZeneca Plc (AZN.L), which is hungry for assets to refill a depleted new drugs pipeline, is also a possible suitor, but GlaxoSmithKline Plc (GSK.L) is considered unlikely.
Officials at these companies declined to comment or were not immediately available to respond.
MedImmune already has links with Glaxo and Merck, since it is entitled to royalties on sales of the companies' rival HPV vaccines, Cervarix and Gardasil.
France's Sanofi-Aventis SA (SASY.PA) and Australia's CSL Ltd. (CSL.AX) also have technology licensing deals with the company, while Abbott is co-promoter of Synagis.
Major holders of MedImmune stock include Goldman, with an 11 percent stake, and T. Rowe Price, with 7 percent, according to Reuters data.
(Additional reporting by Bill Berkrot in New York and Debra Sherman in Chicago)
