By Lisa Seachrist
WASHINGTON — In anticipation of a fall launch of Synagis, a monoclonal antibody to prevent respiratory syncytial virus (RSV) disease in premature infants, MedImmune Inc. will issue 1.7 million new shares of common stock to raise $66.3 million in a private placement.
MedImmune, of Gaithersburg, Md., intends to sell the shares for $39 per share to three current institutional investors to prepare for a possible product launch this fall. The placement is contingent upon filing a registration statement with the Securities and Exchange Commission.
"The logic for us was simply to strengthen the balance sheet in anticipation of launching Synagis in time for the RSV season," said Dave Mott, president and chief operating officer at MedImmune. "In this choppy and difficult market, we were in the luxurious position of having three of our largest investors interested in increasing their stake in the company."
Investors in the placement are BB Biotech, of Schaffhausen, Switzerland; Investor AB, of Stockholm, Sweden; and Invesco Funds Group, of Denver, Colo. BB Biotech will purchase 1 million of the shares, becoming the second largest stockholder in MedImmune.
"We believe MedImmune is on the edge of becoming a strong, profitable biotech company," said Anders Hove, a top manager with BB Biotech. "We see MedImmune coming to profitability in 1998 and growing strongly in 1999."
MedImmune could have easily raised the $66 million in a public offering, said analyst Peter Drake, executive vice president of Vector Securities International, in Deerfield, Ill. It is a credit to the company, he added, that it could structure the deal quickly and quietly.
"I think if you look back on my coverage of the biotechnology industry over the last 15 years, you will find that I consider [MedImmune] to be one of the best companies I have ever seen," Drake told BioWorld Today. "They are up there with the Amgens, Biogens and Genentechs in terms of really great biotech companies. I have a 'buy' recommendation on them with a target price of $67."
MedImmune's stock (NASDAQ:MEDI) closed at $40.50, up $1.25.
The company last month submitted a biologics license application to the FDA for Synagis — a humanized monoclonal antibody formerly known as MEDI-493. Like MedImmune's FDA-approved polyclonal antibody RespiGam, Synagis is targeted against RSV, which can result in fatal pneumonia in premature infants and other high-risk children.
Synagis specifically targets RSV, whereas RespiGam contains a number of other antibodies. In addition, Synagis can be given by injection rather than the infusions that RespiGam requires. The company expects most people will switch to the easier-to-administer and more effective Synagis should the FDA approve the drug. MedImmune does not, however, plan to withdraw RespiGam.
Synagis is ineligible for expedited review at the FDA, Mott said, adding that he hopes the agency will approve the drug before the RSV season begins in November. *