MedImmune to buy blood-product firm Biotech company would double in size

September 15, 1993|By Ted Shelsby | Ted Shelsby,Staff Writer

MedImmune Inc. announced yesterday a preliminary agreement to buy a New York-based blood-product company -- a $45 million deal that would double the size of the Gaithersburg-based biotech company.

The purchase of Melville Biologics, a developer, manufacturer and distributor of blood derivative products, would provide five new products and more manufacturing capacity, MedImmune said.

Melville, a 130-employee company based on Long Island, is a division of the nonprofit New York Blood Center. It handles manufacturing and commercialization of all blood derivative products and related technologies developed by the center, the nation's largest independent blood-collection organization.

"This acquisition is an excellent opportunity for MedImmune," Wayne T. Hockmeyer, chairman and chief executive officer of the 125-employee company, said in a statement. "It provides us with major new product opportunities and, through an alliance with ,, the New York Blood Center, access to one of the leading blood products and infectious disease research groups."

He said the acquisition, which is expected to be completed by the end of the year, would give MedImmune more production capacity for its Respivir and CytoGam products and should help reduce production costs.

Respivir is designed to treat respiratory syncytial virus, which can cause bronchial infection and pneumonia in infants and young children. CytoGam is used to prevent cytomegalovirus disease in kidney-transplant patients.

MedImmune also will have the first shot at licensing and developing any technology that comes out of the blood center within 10 years. The center provides blood and blood products ** for the 18 million people in the New York City metropolitan area.

David M. Mott, a vice president of MedImmune, said that no operations at the company's headquarters and research and development center would move to New York.

Under the agreement, he said, MedImmune will offer $40 million in newly issued shares of its common stock for Melville. MedImmune has agreed to reimburse the blood center up to $4 million for capital investment made in Melville before the acquisition. And MedImmune will pay the blood center $1 million in royalties for certain products that draw from technology licensed by the center.

For the 11 months that ended March 31, Melville lost $6 million, on sales of $31 million. Mr. Mott said he does not expect Melville to contribute to MedImmune's earnings until 1996, when several new drugs are expected to reach the marketing stage.

MedImmune lost $8.5 million, on sales of $13 million, in its most recent fiscal year. In the first half of 1993, the company lost $7 million, on sales of $4.4 million.

MedImmune's stock closed yesterday at $20.75, up 75 cents.

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