MedImmune's acquisition of U.S. Bioscience will likely lead to a tighter relationship with Abbott. Abbott already co-markets MedImmune's Synagis (palivizumab) and is in the process of acquiring Alza, which co-promotes U.S. Bioscience's top product Ethyol (amifostine) in the U.S.

In addition, Abbott will gain a minor equity stake in MedImmune with the mergers. Alza bought 4.9% of U.S. Bioscience in 1997 which would translate to .33% of MedImmune.

MedImmune gains a ready-made oncology infrastructure via the acquisition of U.S. Bioscience. MedImmune currently focuses on treatments of infectious disease, transplantation medicine and autoimmune disorders.

U.S. Bioscience markets three cancer agents and has another in development. Ethyol is indicated for the reduction of cumulative kidney toxicity associated with repeated administration of cisplatin in patients with advanced ovarian cancer and non-small cell lung cancer, and for xerostomia in patients undergoing post-operative radiation for head and neck cancer.

U.S. Bioscience also markets NeuTrexin (trimetrexate glucuronate) injection for the treatment of moderate-to-severe Pneumocystis carinii pneumonia in immunocompromised patients, and Hexalen (altretamine) as second-line therapy for patients with recurrent or persistent ovarian cancer.

In addition to three oncology products, MedImmune will gain a 30-rep oncology sales force from U.S. Bioscience, a manufacturing facility in the Netherlands, and an R&D infrastructure.

MedImmune had begun building an anticancer product portfolio before the proposed U.S. Bioscience deal. The company acquired its first oncologic agent Vitaxin, a humanized anti-angiogenesis monoclonal antibody, in February through a deal with Ixsys covering three other antibody-based products. Vitaxin is currently in Phase II for leiomyosarcoma. A Phase I study in breast, lung or colon cancer is planned for the beginning of next year. MedImmune pursued its option for a second antibody, an anti-cocaine addiction product, in early September.

The combined company will have annual revenues of nearly $300 mil. For the 12 months ended June 30, MedImmune reported sales of $256 mil. while U.S. Bioscience showed revenues of about $30 mil.

In the second quarter, U.S. Bioscience reported a 23% gain in sales to $5.1 mil. and a 78% jump in revenues to $9.1 mil. that included a $3 mil. milestone payment from Schering. The company attributed the sales increase to Ethyol sales gains that "offset declines in NeuTrexin and Hexalen." NeuTrexin and Hexalen sales were negatively affected by "transitional factors relating to the assumption of full responsibility for promotion" in the U.S., the company reported. U.S. Bioscience reassumed full marketing responsibility for the two products from Alza in June.

Alza reported second-quarter Ethyol sales of $8.5 mil., up nearly 50% from the comparable 1998 period. Six-month sales of Ethyol were up 23% to $17.1 mil. U.S. Bioscience credits the distribution agreements with Alza and Schering-Plough in Europe for the Ethyol growth. The company expects the new xerostomia indication, approved by FDA in June, to significantly expand the patient population for Ethyol.

U.S. Bioscience is currently conducting studies in additional indications for Ethyol. Phase II studies for NeuTrexin in colorectal cancer and in combination with 5-FU and leucovorin are ongoing. Lodenosine is in AIDS clinicals in combination with stavudine (Bristol's Zerit) and indinavir (Merck's Crixivan).

In addition to Synagis, which replaced Respigam last year for pediatric RSV, MedImmune's product pipeline includes CytoGam (cytomegalovirus immune globulin intravenous) for the prevention of cytomegalovirus. First-half 1999 sales for Synagis, which is manufactured by Boehringer Ingelheim, were $117.5 mil., while CytoGam sales were $15.2 mil.

MedImmune's acquisition of U.S. Bioscience is an anticlimactic ending to one of the big biotech stock market stories of the early '90's. U.S. Bioscience was a Wall Street darling leading up to the first rejection of its Ethyol NDA by an FDA advisory committee in February 1992; prior to the decision, the company carried a market capitalization of well over $1 bil. The stock deal, announced Sept. 22, has an equity value of about $492 mil. and a transaction value of approximately $440 mil. Completion of the transaction is anticipated by the end of 1999 or the first quarter 2000.

MedImmune Gets Closer To Abbott With U.S. Bioscience Merger

More from Archive

More from Pink Sheet