CEO Says Stock Pressure Drove MedImmune Deal

David M. Mott was an investment banker before joining MedImmune on April Fools' Day 1992, and in his 15 years with the company -- he eventually became chief executive -- he has been a fierce advocate for its independence.

But things change.

The Gaithersburg firm's lead product, Synagis, is approaching its 10th birthday, meaning 30 percent sales growth may not be repeated. And that, Mott said, "has big implications for how your stock is traded in the market."

Meanwhile, MedImmune has spent heavily on researching and developing new drugs, but "we needed to bring that to a halt as an independent public company and begin to drive short-term earnings -- consistent, predictable short-term earnings growth," he said.

The situation made long-term growth untenable, so Mott went to his board of directors and recommended a strategy he never thought he would embrace: Sell the company. Six weeks later, this past April, MedImmune accepted a $15.6 billion offer from the British drug company AstraZeneca.

Mott, who had offered little comment on the deal, spoke yesterday to local technology executives at a breakfast organized by the Tech Council of Maryland/MdBio. He was questioned by the organization's chief executive, Julie Coons, but was hustled out of the room by aides shortly after the event, avoiding reporters.

Although he didn't mention it, Mott was also contending with other pressure in the months leading up the sale. In February, the activist investor Carl C. Icahn disclosed a sizable stake in MedImmune and later said he had threatened to shake up the board of directors because the firm suffered from "very lackluster management."

Mott, who made more than $145 million in the AstraZeneca deal, called MedImmune his "fifth child" and said the transition from independence to quarry was "heart wrenching and challenging."

"This isn't what we built MedImmune to do," he said. "The vision for all the entrepreneurs sitting in this room is probably not to sell your baby to a big pharmaceutical company." But he said, "The rewarding part to me, which is kind of amazing, is how good it's actually turned out."

Mott said MedImmune, which has about 3,000 employees, will essentially operate as it has, only now under AstraZeneca's umbrella. He said the drug company bought MedImmune to leap into the biotech space. "The benefit to MedImmune," Mott said, "is that they actually need us."

And him: Mott remains chief executive of MedImmune, and he is now a senior member of the executive team that runs AstraZeneca.

MedImmune has increased its staff by 300 since the deal and will escalate its hiring pace instead of slowing down, as it would have without the sale, Mott said.

"We frankly had had a tremendous grace period from shareholders for a number of years while we ramped up our R&D," Mott said.

MedImmune's research-and-development spending this year will jump from $400 million to $560 million, and R&D spending overall is projected to reach $1 billion by 2010.

As for the company's venture capital efforts, Mott called them "bigger and better." He will take a more active role in choosing companies for MedImmune to invest in.

"I really think this is going to be a tremendous transaction for MedImmune stakeholders, for AstraZeneca, and for this community," Mott said.