MedImmune stock soars on drug-sales outlook

Analysts anticipate big windfall from products in pipeline


August 20, 1999|By Mark Guidera | Mark Guidera,SUN STAFF

Shares in MedImmune Inc., perhaps Maryland's most successful biotechnology company, have been on a tear this summer, almost doubling since mid-May.

Senior executives and big institutional investors have taken advantage of the rise to sell off shares and make millions.

Shares in the company closed at a 52-week high of $108.50 Wednesday -- up more than $20 since the previous Wednesday and almost double the May 17 closing price of $55 a share.

Analysts said MedImmune's share spike last week was in part due to the company's decision to move an experimental vaccine for urinary tract infections into human trials by the end of the year.

Shares yesterday fell back, shedding $5.4062, to close at $102.7187.

Two industry analysts -- Merlin BioMed fund manager Stuart Weisbrod and Prudential Vector Healthcare Group analyst Peter F. Drake -- say they believe that MedImmune shares will reach $120 per share in the next 12 months.

Jay B. Silverman, a senior life sciences industry analyst at BancBoston Robertson Stephens, attributes the sharp rise to analysts' bullish outlook for sales of Synagis.

MedImmune's treatment for a life-threatening respiratory disease in infants, respiratory syncytial virus (RSV), was approved for U.S. sale in June 1998.

"People are very excited about Synagis. This drug is a blockbuster," said Silverman. "It's had the most successful launch of any pediatric drug ever. The second RSV season for Synagis is just coming up. That's what's been driving the stock."

The disease most often hits prematurely born and other at-risk babies between October and April. Synagis generated $117 million in U.S. sales in the first six months of this year, mostly between January and March.

Analysts also like MedImmune's plans to seek Food and Drug Administration approval late this year to begin a small trial of its urinary tract infection vaccine.

Such infections, caused by bacteria, are considered common in women, ages 18 to 40, said Dr. Scott Koenig, senior vice president for research at MedImmune. He said any approved vaccine would most likely be prescribed for women experiencing infection recurrences.

The company's spate of good news has been good for executives and investors.

A number of senior MedImmune executives and big institutional investors in the Gaithersburg concern have taken advantage of this year's rocketing share price -- and a 2-for-1 stock split in January -- to take profits.

Recent big sellers of MedImmune stock this year, according to CDA/Investment, which tracks insider stock sales, include co-founder, Chairman and Chief Executive Officer Wayne T. Hockmeyer, medical director Franklin H. Top, Senior Vice President for sales and marketing James F. Young, and Chief Financial Officer David M. Mott.

Hockmeyer, who helped found the company in 1988, has sold more than $25 million worth of shares over three separate occasions this year.

He sold 125,000 shares July 30 for $9.8 million, according to CDA/Investment. The CEO sold the shares for $78.39 each, after obtaining them for between $7.38 and $22.19 a share. His profit before taxes: more than $7 million.

"Many of these guys have been with the company since Day One, when it was just an idea," company spokesman William Roberts said. "It's very appropriate for them to divest some shares."

Silverman, the analyst, agrees. "They deserve it. It's looking more and more like this is a company that can sustain earnings."

Many of the company's large institutional investors have also either taken advantage of the share price climb to take profits, or been forced to trim back holdings so MedImmune isn't overweighted in their funds. For example, Biotech Focus SA, a Swiss investment fund based in Panama, sold $15 million worth of MedImmune stock May 28.

The company sold holdings that day for what looks now like a bargain: $63.50 a share.

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