MedImmune finishes buying U.S. Bioscience

Position desired in market for new cancer treatments

shares jump $6.25

November 25, 1999|By Mark Guidera | Mark Guidera,SUN STAFF

MedImmune Inc., the fast-growing Maryland biotechnology company, said yesterday that it has completed its purchase of U.S. Bioscience Inc. in a bid to move into the growing market for new cancer treatments.

Shareholders of U.S. Bioscience, based in West Conshohocken, Pa., received 0.15 shares of Gaithersburg-based MedImmune for each U.S. Bioscience share they held.

MedImmune, whose chief product is a drug to prevent a serious respiratory illness in infants, said the stock transaction had an equity value of $580 million.

That is based on 30.5 million fully diluted U.S. Bioscience shares and MedImmune's trading price of $126.75 per share on Nov. 22, the companies said.

Shares of MedImmune, which have gained 159 percent since December, jumped $6.25 to $128.9375 yesterday.

Lori A. Weiman, a MedImmune spokeswoman, said yesterday that the company plans to keep the U.S. Bioscience research offices outside Philadelphia in operation, where 80 are employed.

It also will continue to operate a drug-manufacturing facility in the Netherlands, she said.

Some U.S. Bioscience senior executives are expected to be offered buyout packages, though it is unclear yet which executives will depart, said Weiman.

The companies originally announced the acquisition in late September.

MedImmune decided in October to move forward with the deal despite the unexpected halt of a trial of an experimental AIDS drug that U.S. BioScience had been testing in human volunteers.

The trial was stopped after one patient died and other complications were found.

MedImmune's chief executive officer, Wayne Hockmeyer, has been looking for companies to buy or merge with to strengthen MedImmune's slim drug portfolio.

The company has three drugs approved for marketing, and one of those, an organ transplant medicine, is being phased out.

Its chief selling drug, Synagis, has been a blockbuster sales success, propeling MedImmune into the black. Analysts expect the $940-per-shot treatment for children at risk for respiratory syncytial virus to eventually generate more than $350 million in U.S. sales.

In its third quarter that ended Sept. 30, MedImmune reported a $5.1 million profit compared with an $11.1 million loss a year earlier and beating analysts' expectations. Revenue more than doubled, from $23.8 million to $48.9 million as wholesalers stocked up on Synagis before the RVS season.

Analyst Leslie Wright Marino of BancBoston Robertson Stephens believes that the companies are a good match.

The reasons: U.S. Bioscience has revenue-generating products, including two U.S.-approved cancer drugs and a treatment for a complication of AIDS.

It also has a number of experimental cancer and AIDS drugs in development.

Also, MedImmune is flush with cash for research and development, and has a group of antibody experts and scientists working on the emerging field of using antibodies to treat cancer and immune system disorders.

Pub Date: 11/25/99

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