The USA’s MedImmune, which is in the process of being acquired by AstraZeneca in a cash deal worth around $15.6 billion, says that profits in the first quarter more than tripled.
The Maryland-based biotechnology firm posted net income of $160 million, or $0.66 per share, way ahead of analysts’ expectations and up from $47 million, or $0.18 per share for the corresponding period last year. Revenues rose 15.4% to $574.8 million, driven by a strong increase in sales of Synagis (palivizumab), its paediatric vaccine for respiratory syncytial virus, up 9% to $507 million.
The firm noted that sales to its international distributor Abbott were $32 million compared with $29 million in the first quarter of 2006. MedImmune also collects royalties on sales of vaccines for human papillomavirus and revenues from the latter source reached $26 million, $14 million higher than estimated when the firm issued preliminary results on April 9.
The company cancelled a conference call to discuss earnings because of the merger but AstraZeneca will have seen enough to be pleased with the performance, especially after the hard time it has endured from shareholders and analysts since the deal was announced a week ago.
Observers believe that the purchase does little to address the weakness in AstraZeneca’s Phase III pipeline and last week Merrill Lynch expressed its fears that the huge sum being paid “exhausts the company's cash pile for share buybacks and product acquisitions." However, the Anglo-Swedish drugmaker’s chief executive, David Brennan, has suggested that its spending may not be over just yet.
AstraZeneca still has billions to spend if needed
In an interview with Reuters, Mr Brennan said that the company remains on the look-out for promising pipeline opportunities, adding that the acquisition of MedImmune could make it a more attractive potential partner for some biotechnology firms. He acknowledged that the firm is not likely to "discover its way out" of its present difficulties and therefore has to bring in products from third parties.
"We feel like we have the potential to keep our credit rating in the 'A' category” and still have “billions of dollars to spend if we choose to spend it," he told Reuters. "I wouldn't envision that we would be doing a deal like MedImmune at all but I think we have the capacity to do more if the opportunity is right. It would have to be a strategic fit with our existing therapeutic categories."