AstraZeneca, struggling to develop new medicines, said Monday that it agreed to buy biotechnology company MedImmune Inc. for $15.2 billion in cash to gain flu vaccines and an antiviral treatment for babies.
MedImmune investors will get $58 a share, AstraZeneca said. That's 21% more than MedImmune's Friday closing price of $48.01. MedImmune, based in Gaithersburg, Md., put itself up for sale April 12 under pressure from billionaire Carl Icahn and other shareholders.
"That's a hell of a premium and it's going to take quite some time until they make some money on their investment," said Romain Pasche, who manages about $800 million in drug stocks at Vontobel Asset Management in Zurich, Switzerland, and holds AstraZeneca shares.
"Astra really needed to plug the gap they have in their late-date pipeline, and this acquisition doesn't solve that problem," he said.
AstraZeneca needs new products after four experimental drugs failed in the last year. From MedImmune, the London-based drug maker would get the FluMist influenza vaccine, the infant lung treatment Synagis and 45 products under development.
Shares of AstraZeneca fell $3.13 to $55.91 on Monday. MedImmune shares rose $8.56 to $56.57, the stock's biggest gain since 1998. The shares have gained 50% since April 11.
Including net cash of about $340 million, the MedImmune purchase price is about $15.6 billion, AstraZeneca said. AstraZeneca Chief Financial Officer Jon Symonds said bidding was "ferociously competitive."
The company is taking on debt for the first time, Symonds said.