Thursday, April 26, 2007

MedImmune expected to stay in Gaithersburg

British drugmaker AstraZeneca agrees to buy biotech for $15.6 billion

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MedImmune Inc., which has a growing presence in Frederick, will remain headquartered in Gaithersburg after the biotechnolgy company agreed this week to be acquired by AstraZeneca Plc of London for $15.6 billion.

MedImmune is Maryland’s largest biotechnology company, with $1.3 billion in revenues for 2006 and 2,500 employees, with about half in Maryland, including 216 in Frederick.

The company may be best known for its nasal flu vaccine, FluMist, but its biggest moneymaker, by far, is Synagis, which helps prevent respiratory infections in children.

After the deal closes in June, AstraZeneca will provide MedImmune employees a ‘‘one-time retention grant,” stipulating salary and other compensation, said Emily Denney, an AstraZeneca spokeswoman.

MedImmune will keep its name and remain headquartered in Gaithersburg, Denney said. The company’s recent commitment to build manufacturing plants in Frederick was a key provision of the deal with AstraZeneca.

Richard Griffin, director of the city’s Office of Economic Development, was cautiously optimistic.

‘‘I think it’s premature to know what the sale means to MedImmune’s Frederick facility,” Griffin said. ‘‘I suspect that MedImmune’s operations in Frederick will stay intact. AstraZeneca bought the company because of its vaccine production, and I don’t see why they would want to change anything.”

The company’s $250 million expansion project, which will mean 250 additional employees, ‘‘as far as I know is still on track and moving forward,” he said.

‘‘We’re looking forward to continue working with AstraZeneca on the expansion project. We’re working toward completing the construction phase,” he said. ‘‘According to the plans, MedImmune is scheduled to start production in 2009.”

Following Monday’s announcement of the deal, County Commissioner John L. ‘‘Lennie” Thompson Jr. (R) of Walkersville said the county should rescind the tax break it granted to MedImmune last year, when it extended a tax increment finance district to help accommodate its expansion. In such a district, the county uses a portion of property tax revenue from the new development to help pay off loans taken to finance infrastructure improvements.

‘‘While I stand firm on the proposition that [multi-]national, multi-billion dollar private business entities should go to the financial markets for their capital, I acknowledge that I stand alone,” Thompson wrote in an e-mail with the subject line ‘‘Corporate Welfare Alert — [MedImmune] Take Over.”

‘Retain MedImmuneemployees and culture’

Another key provision of the deal is to ‘‘retain MedImmune employees and its culture,” said Denney, who did not elaborate.

The purchase is an indication of the recent maturity of Maryland biotechs into late clinical stages of drug candidates, industry analysts said.

‘‘The value of this company is clearly invested in its intellectual property, the employees and its facilities. MedImmune’s facilities here are state-of-the-art,” said David W. Edgerley, secretary of Maryland’s Department of Business and Economic Development.

MedImmune spokeswoman Jamie Lacey called the deal ‘‘great” for the company, its stockholders and ‘‘our patients.”

The agreement calls for David M. Mott, CEO of MedImmune, to assume a ‘‘high-level position” with AstraZeneca, Denney said. Other top officials will also remain with the company, she said.

‘‘The potential to harness the combined skills and capabilities of MedImmune, AstraZeneca and [Cambridge Antibody Technology, recently purchased by AstraZeneca] and take our combined world-class biologics capabilities to the next level is very exciting and a challenge to which I am personally committed,” Mott said in a statement.

Less than five years ago, MedImmune broke ground on its 750,000-square-foot Gaithersburg headquarters it recently completed. At the time, it was given a $5 million grant from Maryland’s Sunny Day Fund and a $500,000 loan from the Montgomery County Department of Economic Development.

MedImmune has received $11.8 million in state aid since 1996, said James Henry, managing director for finance programs for DBED.

Henry said DBED is also working with a Maryland legislative committee on a $7.5 million loan for a multiphase expansion of the company’s manufacturing plant in Frederick.

Both Edgerley, formerly head of economic development in Montgomery County, and Robert Diamond, a county economic official, said they are not concerned about similarities of the impending purchase with the acquisition of Life Technologies Inc. in 2000 by Invitrogen of San Diego.

Life Technologies was one of the largest bioscience companies in Maryland and had just completed its 240,000-square-foot headquarters in Rockville as a cornerstone of the Life Sciences Center in Montgomery County.

Despite initial assurances from Invitrogen, in a little more than a year about 600 Life Technologies employees were looking for work. Invitrogen offered many workers transfers to Carlsbad, Calif., but most declined. Invitrogen still has a manufacturing plant in Frederick.

‘‘I wouldn’t draw a parallel from one company acquisition to another,” Edgerley said. ‘‘My experience is that in the range of what can happen we should focus on the upside for Maryland.” Diamond called the MedImmune deal ‘‘a positive development for the county, state and biotechnology in the region — sounds very positive. Clearly, AstraZeneca recognized the value of MedImmune and the workforce of this area where MedImmune has grown up.”

The sale comes after complaints from influential stockholders over what they perceived as MedImmune’s disappointing stock performance in the past year. The company announced April 12 that it had retained Wall Street investment banking firm Goldman Sachs & Co. to help entertain suitors.

AstraZeneca — maker of the cholesterol drug Crestor and the stomach acid treatment Nexium — reported first-quarter sales of $6.97 billion, a 13 percent increase over the same quarter in 2006. Revenues in 2006 were $26.48 billion.

The MedImmune deal is the British company’s first entry into vaccine production, Denney said. MedImmune controls a patented technology used by Merck in its new vaccine against human papillomavirus, some strains of which can cause cervical cancer.

MedImmune is recognized as a leading producer of biologics, including FluMist, and is one of the world’s top 10 biopharmaceutical companies by equity. It has 45 research and development projects, including seven monoclonal antibody-based treatments and five vaccines in development.