Analysts said the deal made long-term sense and would boost AstraZeneca's presence in biological medicines and vaccines -- two of the fastest-growing areas of drug research. But they also said it had few near-term benefits.
"It does little to address the weakness in the Phase III pipeline and exhausts the company's cash pile for share buybacks and product acquisitions," Merrill Lynch analysts wrote in a research note.
A previously announced $4 billion share buyback program for 2007 remains in place but Chief Financial Officer Jon Symonds told reporters this would likely decline in 2008.
AstraZeneca shares were down 1.5% at 29.09 pounds, the second-biggest fall among UK benchmark FTSE-100 index stocks.
AstraZeneca said the deal, which was reported earlier by a source close to the situation, was expected to close in June 2007. The transaction values Gaithersburg, Maryland-based MedImmune at $15.6 billion, or $15.2 billion in terms of enterprise value after allowing for $340 million of net cash.
AstraZeneca's need for new products was highlighted again on Monday when it also announced it was dropping future development of AtheroGenics Inc.'s experimental heart drug AGI-1067 following disappointing clinical trial results. The move, widely anticipated by analysts, will result in a charge of $83 million.
For the time being, AstraZeneca continues to generate strong sales from existing medicines like Seroquel for schizophrenia, Crestor for cholesterol and top-seller Nexium for stomach acid.
But analysts say it badly needs to replenish the cupboard in the face of looming generic competition.
The group reported an 11% increase in first-quarter pretax profit to $2.27 billion, just above analysts' expectations, as sales rose 13%, helped by a weaker dollar. The average forecast of 18 industry analysts in a Reuters poll had been for pretax profits of $2.22 billion.
MedImmune, one of the larger independent biotech companies in the United States, is best known as the maker of the nasal spray flu vaccine FluMist, but it also has two other marketed products, Synagis for infectious respiratory disease and Ethyol for reducing chemotherapy side effects.
It also has two late-stage products in development -- the next-generation follow-on to blockbuster Synagis and a refrigerated formulation of FluMist.
MedImmune has been the subject of takeover speculation for some time, with talk of a bid intensifying since billionaire investor Carl Icahn disclosed in February he owned 2.8 million shares of the company.
Key shareholders have been dissatisfied with its performance and the company announced on April 12 it had hired Goldman Sachs Inc. to explore a sale.
Synergies following the acquisition are expected to total around $500 million annually by 2009, by which time the deal should be cash-earnings enhancing, AstraZeneca said.
Brennan said the deal would significantly accelerate AstraZeneca's position in biologics, or biotech medicines, and was a particularly good fit with recently acquired Cambridge Antibody Technology, a smaller, UK-based biotech firm.
With MedImmune on board, the proportion of biologics in the pipeline will increase to 27% from 7%.
MedImmune's chief executive, David Mott, and its head of research, James Young, will stay on after the takeover.