By Michael S. Rosenwald
Washington Post Staff Writer
Thursday, February 15, 2007

An institutional investor in MedImmune has sent a third letter to the firm's board pushing for a sale of the company, saying that negative Wall Street reaction to recent quarterly earnings "must be viewed as a total rejection of the management's strategy."

David A. Katz, the president of Matrix Asset Advisors, has argued that MedImmune's value to shareholders would be maximized if the company were sold to a large drugmaker willing to pay a premium for the firm's drugs and extensive pipeline to beef its offerings. The board has rejected Katz's pressure.

Katz's most recent letter comes a week after the Gaithersburg firm reported revenue results for two high-profile products that disappointed investors, sending its stock down nearly 9 percent and causing one analyst to deem the results "tragic." Katz wrote to board members that the recent missteps "have served to increase the price gap between the Company's publicly traded valuation and the value that the Company would have to a strategic buyer."

MedImmune spokeswoman Jamie Lacey said that David M. Mott, the company's chief executive and vice chairman, was traveling and unavailable for comment. Lacey read a statement saying the board welcomes the views of its shareholders and values their input.

"As we've done previously, our board of directors will review the Matrix letter and give it thorough consideration," the statement said. "MedImmune's board regularly reviews the company's business plan and the value inherent in that plan, and the board will continue to do what it believes is in the best interest of all shareholders."

Board member M. James Barrett declined to comment. Several other board members were unavailable or didn't return phone messages.

Katz's New York investment firm owns 1.7 million MedImmune shares, or 0.71 percent of the company. That is by no means a controlling stake but is probably enough to gather attention on Wall Street.

Several analysts have recently said that MedImmune was a prime buyout target. Katz noted that a Prudential analyst had suggested the recent quarterly results would increase pressure from investors. He also referenced a recent analyst note from Sanford C. Bernstein and Co. that said: "Our conversations with large institutional shareholders point to high levels of dissatisfaction and a willingness to consider more activist stances."

Shares of MedImmune closed yesterday at $31.25, down 21 cents.