Monday, April 23, 2007

AstraZeneca buying MedImmune - a $13+ billion biotech feeding frenzy

Britain's AstraZeneca is near the purchase of MedImmune for what could be more than $13 billion in a deal that could be announced as early as Monday, according to the WSJ.

AstraZeneca is trying to replenish its pipeline after several research setbacks, The Journal reported, adding that a transaction would bring to an end a tumultuous ride for MedImmune, which is prized for its collection of drugs for respiratory viruses and influenza, but whose stock faltered during 2006 and came under pressure from investor Carl Icahn.

But. Icahn and a group of other investors proved to be right when they said the company would fetch a steep price from the world's major pharmaceutical companies, who are desperate to bring new growth into their businesses, according to the report.

MedImmune is attracting a price of about 50 times its earnings and around 10 times its annual revenue, The Journal said, adding that represents a premium of more than 15% to the company's Friday close of $48.01.

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