Scale was elusive

MedImmune Inc. is going away in what can only be called a blaze of glory - a $15.6 billion takeout by AstraZeneca plc. The deal price is about a 53% premium to MEDI's valuation on April 11, the day before it said it was on the block. But even more striking is the contrast between the aggressive moves by AZN's new management team in acquiring the pieces it believes it needs to build critical mass and MEDI's business building efforts, which have sputtered since its 2001 acquisition of Aviron.

AstraZeneca (LSE:AZN; AZN, London, U.K.) was attracted to MEDI's downstream biologics capabilities, including process development, manufacturing, and clinical and regulatory infrastructure. Ironically, those capabilities probably were underutilized at MEDI, which has a thin late-stage pipeline and an internal engine that hasn't produced an approved home-grown drug since the 1998 approval of Synagis palivizumab for RSV.

Thus, while MEDI maintains it has assembled a scalable biologics discovery and development engine in its 19 years as a standalone, a key issue has been putting targets and compounds into that infrastructure - and getting drugs out.

All this left MEDI ripe for a takeout, as lackluster stock performance had left some investors clamoring for the company to seek alternatives.

The expected launches of two potential blockbusters - CAIV-T, a refrigerator-stable formulation of MEDI's FluMist influenza vaccine, and Numax, a next-generation version of Synagis - also provided upside for potential buyers. But these upcoming launches also raised the question of whether MEDI would be better off in a combination with a company that already had global reach.

Enter AZN, which has the compounds, targets and global infrastructure, and wanted a much larger footprint in biologics.

Traction to distraction

MEDI was founded in 1988 and joined the ranks of the billion-dollar biotechs in 1997. The company got its first (and only) blockbuster on the market in 1998 with FDA approval of Synagis to prevent RSV in premature infants. Its market cap was about $2.5 billion, and at the time, some investors suspected the company was a takeout candidate.

Instead, MEDI was the acquirer, making its first big purchase in September 1999 when it bought

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