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DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: Twitter: Dereklowe

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In the Pipeline

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April 24, 2007

Put Your Money Down

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Posted by Derek

As everyone will have heard by now, AstraZeneca opened up the wallet but good yesterday, offering over 15 billion dollars for MedImmune. There was pressure on both sides, from what I understand. AZ has had a rough time of it the last few years, with several major clinical disappointments (one of which, Iressa, actually managed to stagger and lurch onto the market). For its part, MedImmune's big shareholders seemed to think that they weren't getting quite the value they thought the company was worth. Yesterday's offer is about a 20% premium to the previous stock price, so maybe that should cheer them up.

This is part of what seems to be a general blurring of the small-molecule and biologic worlds. One the one side, you have deals like this (and Merck's foray into RNAi, etc.), but at the same time the big biotech players are doing more small molecule work. Genentech, after some fits and starts over the last ten or fifteen years, is ramping up their traditional drug discovery (which I know since two of my former colleagues recently got hired out there). Amgen has a pretty good-sized effort, in both California and Cambridge, but (as I was talking to some people yesterday about), no one really seems to know what they're doing yet with all that money and talent.

Did AstraZeneca overpay? I'm a fine one to ask, since to me all these deals look overpriced. They have a better idea of what MedImmune's pipeline looks like than anyone on the outside (they'd better!), so I have to assume that they were able to massage the numbers into something reasonable. But the thing about these deals is that, in the end, there's really no way of knowing whether they're going to work out or not. You can get some fuzzy idea of the odds, but there are so many confounding factors that even the best thought-out move is still a leap out of an airplane. Good luck to all concerned. . .

Comments (6) + TrackBacks (0) | Category: Business and Markets


1. Anonymous on April 24, 2007 9:27 PM writes...


Have you heard about any job cuts at Medimmune? What does "one time retention grant" mean, seems this has been offered to the employees?

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2. JSinger on April 24, 2007 10:09 PM writes...

What does "one time retention grant" mean...?"

Heh, I was wondering about that too -- it sounds like a new euphemism for firings, doesn't it? I think it's actually a good thing, though, like a signing bonus for acquired employees.

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3. Petros on April 25, 2007 1:44 AM writes...


You forget a second potential bolckbuster that (briefly) staggered on the market, at least in Europe, the thrombin inhibitor Exanta.

But the number of late satge failings is staggering- Viozan, Galida and AGI-1067 were all touted as blockbusters,

And various spoiling tactcics and the Lipobay disaster seriously damaged Crestor's prospects

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4. Derek Lowe on April 25, 2007 6:44 AM writes...

Haven't heard anything about jobs yet in this deal, but surely there will be some news later on. That sort of news tends to take weeks/months to hit, though, which doesn't make for a pleasant time at the companies involved - as I can tell you from recent experience.

Petros, you're right, I forgot Exanta, since it never even made it on the market here. I think that was a Factor Xa inhibitor, though, just upstream of thrombin, and it was indeed supposed to be big. . .

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5. Dr. Safety on April 26, 2007 11:00 AM writes...

It was big. One of the best hepatotoxins ever to even get to the FDA.

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6. Insider on April 26, 2007 1:41 PM writes...

Another AIDS drug - that's where the money is?

How about multiple drug resistant TB - that scares me!!!!!!

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