Stock buy may bode shake-up at biotech

Icahn holds 1.2% of MedImmune

February 16, 2007|By Tricia Bishop | Tricia Bishop,Sun reporter

Billionaire investor Carl C. Icahn has bought 2.8 million shares of MedImmune Inc. stock, a 1.2 percent stake that's large enough to fuel speculation that Maryland's largest biotech company is headed for a shake-up.

New York investment group Matrix Asset Advisors, which owns about 1.7 million shares of MedImmune, or about 0.7 percent of the company, has been pushing for the Gaithersburg-based company to be sold.

In a letter sent to MedImmune's board of directors Tuesday - the third of its kind - Matrix President David A. Katz said he was concerned shareholders were suffering "because of management's inability to deliver on its guidance and proffered expectations."

Icahn has a long history of buying large stakes in companies he believes are undervalued and pressuring their boards to either sell or make changes, ranging from his takeover bids for oil giant Texaco Inc. and steelmaker USX Corp. in the 1980s to his recent move to seize control of biotech company ImClone Systems. He disclosed his stake in MedImmune in a Securities and Exchange Commission filing late Wednesday.

Icahn could not be reached yesterday, though Katz said he was happy to have him on board.

"Icahn walks softly but carries a big stick," Katz said.

MedImmune reported last week flat product sales for 2006 and has had some delays and setbacks in developing new versions of its best-known drugs: Synagis, an infant-respiratory treatment with annual sales of more than $1 billion, and FluMist, a nasally inhaled flu vaccine that hasn't fared well in the marketplace - though new data suggests it's more effective in treating children than the traditional flu shot.

"I think there has been a complete unanimity of agreement among investors that major changes are needed at this company," Sanford Bernstein analyst Geoffrey Porges told Reuters yesterday.

In an earlier interview with The Sun, Porges said MedImmune is overspending and underperforming.

The company has spent millions in recent years acquiring new drug technology along with other companies and beefing up its staff to build the business for the long term.

The company has steadfastly denied plans to sell, though it took note of the Icahn filing. "I can confirm that we've seen the filing," said MedImmune spokeswoman Jamie Lacey.

Forbes last year named Icahn the 24th-richest American, with a net worth of $9.7 billion, characterizing him as both an "obsessive corporate raider" and a "shareholder activist."

MedImmune shares closed up $1.91, or 6 percent, to $33.16 yesterday, its biggest one-day gain in 18 months, according to Bloomberg News.

tricia.bishop@baltsun.com

Sun reporter Allison Connolly contributed to this article.

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