This is the sort of payday that will have every biotech exec in Boston drooling next week. MedImmune’s ceo will get more than $145 milllion in cash after AstraZeneca forks over the $15.6 billion its agreed to pay for the company.

Once the deal closes, David Mott will receive $133.5 million in exchange for the cancellation of already vested stock options and other options that hadn’t yet vested. The remaining millions will cover change-of-control payments for bonuses, incentives, tax gross-ups and severance payments for Mott, who will remain with the company after the takeover.

MedImmune began hunting for a buyer in early March, according to an SEC filing. And AstraZeneca in its own filing, says it was eyeing MedImmune for more than a year, and that ultimately, eight companies expressed interest. Initially, AZ offered $50 per share, but had to go up to $58 when the bidding began.

Some major shareholders, notably Carl Icahn, were unhappy with a string of poor results, including sagging early sales of Synagis this year and a delay on a new version of the drug. That pushed the company’s stock down to about $30 per share in March. MedImmune acknowledged that shareholder dissatisfaction was part of the reason it looked for a buyer.

The $58-per-share purchase price agreed to on April 22 represented a 53 percent premium over MedImmune’s stock price from just a few weeks earlier, and also significantly drove up the value of stock options held by top company officials.

James Young, who heads research and development, will make about $60 million. Wayne Hockmeyer, the board chairman who founded the company in 1988, will receive $59.7 million.

The figures include severance for the termination of the executive’s employment agreements with MedImmune because of the change in control and millions of dollars to cover taxes they will have to pay. Mott and Young will take new posts with AstraZeneca, while Hockmeyer has said he is unsure if he will have a role after the deal closes.

Meanwhile, John Patterson, AZ’s executive director of development, tells The Financial Times that investors will have to wait until the end of 2010 to judge whether the $15.6 billion purchase price is justified. “We’ve only got to produce one or two good products and it will pay for itself. And we expect a lot more. But people will want us to show and tell.”

He acknowledged that many investors “were not happy about the price” of the MedImmune deal but stressed that most accepted the logic “strategically,” but says AstraZeneca would continue to look for in-licensing deals to strengthen its pipeline. “We never said we had solved the problem. We have not stopped looking…If you’d tried to design it, you could not have done it better. It gives us the ability in 2007 to get to where we were hoping to be in 2010.”

Further reading….
The Associated Press;
The Financial Times (subscription required).

[tags]AstraZeneca, MedImmune, Mergers[/tags]