By Brenda Sandburg

MedImmune Inc. announced Monday that it has discontinued negotiations to acquireMelville Biologics from the New York Blood Center.

In September, MedImmune signed a letter of intent to buy the blood products company for$40 million in newly issued shares of common stock, plus $4 million in cash and milestoneand royalty payments.

MedImmune's chairman and chief executive officer, Wayne Hockmeyer, said the companydoes not believe the acquisition “is in the best interest of our shareholders at thistime.“

David Mott, the company's vice president of business development and planning, said thedrop in the company's stock since FDA's advisory panel recommended against approval ofRespiGam would dilute the impact of the acquisition. He cited the anticipated cashinvestment in Melville and the business risk as other factors behind the decision to dropthe acquisition.

On Dec. 2, when FDA's Blood Products Advisory Committee voted against recommendingRespiGam for prevention of respiratory syncytial virus (RSV) infection in certainhigh-risk infants, MedImmune's stock plunged 30 percent, or $7 a share, to close at $16.Since then it has continued to tumble, closing Monday at $11.13 a share, off 38 cents forthe day.

If the acquisition had been completed, MedImmune (NASDAQ:MEDI) would have acquired fiveMelville products: a factor VIII clotting agent, albumin, a virus-inactivated, intravenousimmune globulin and a virus-inactivated thrombin preparation for surgical wound healing.MedImmune of Gaithersburg, Md., had a previous agreement with Melville for production ofRespiGam once the product was approved by FDA. Mott said the future of this agreementdepends on what the New York Blood Center does with Melville.