MEDIMMUNE INC /DE - 10-K Annual Report

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SECURITIES AND EXCHANGE COMMISSION 2/17/98
WASHINGTON, D. C. 20549

FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1997
Commission File Number: 0-19131

MEDIMMUNE, INC.
(Exact name of registrant as specified in its charter)

Delaware 52-1555759
State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or organization)

35 West Watkins Mill Road
Gaithersburg, Maryland 20878
(Address of principal executive office)
(Zip Code)

Registrant's telephone number, including area code: (301) 417-0770
Securities Registered pursuant to Section 12(b) of the Act: None
Securities Registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value
(Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes: X No:

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K [ ].

Aggregate market value of the 25,914,575 shares of voting stock held by non-
affiliates of the registrant based on the closing price on February 28, 1998
was $1,344,318,578 . Common Stock outstanding as of February 28, 1998:
26,325,172 shares.

Documents Incorporated by Reference:
Document Part of Form 10-K
Proxy Statement for the Annual Meeting Part III
of Stockholders to be held May 15, 1998.

MEDIMMUNE, INC.
FORM 10-K
TABLE OF CONTENTS

PART I PAGE
Item 1. Business 1
Item 2. Properties 34
Item 3. Legal Proceedings 35
Item 4. Submission of Matters to a Vote of Security Holders 35

PART II
Item 5. Market for MedImmune, Inc.'s Common Stock and Related
Shareholder Matters 35
Item 6. Selected Financial Data 36
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 36
Item 8. Financial Statements and Supplementary Data 47
Report of Independent Accountants 79
Report of Management 81
Item 9. Changes in and Disagreements with Accountants on
Accounting Financial Disclosure 82

PART III
Item 10. Directors and Executive Officers of MedImmune, Inc. 82
Item 11. Executive Compensation 83
Item 12. Security Ownership of Certain Beneficial Owners and
Management 83
Item 13. Certain Relationships and Related Transactions 83

PART IV
ITEM 14. Exhibits, Financial Statement Schedule, and
Reports on Form 8-K 84
SIGNATURES 86

Schedule I S-1
Exhibit Index E1-E6
Exhibits (Attached to this Report on Form 10-K)

CytoGam and RespiGam are registered trademarks and Synagis is a trademark of
the Company.
____________________

THE STATEMENTS IN THIS ANNUAL REPORT THAT ARE NOT DESCRIPTIONS OF
HISTORICAL FACTS MAY BE FORWARD-LOOKING STATEMENTS. SUCH STATEMENTS REFLECT
MANAGEMENT'S CURRENT VIEWS, ARE BASED ON CERTAIN ASSUMPTIONS AND ARE SUBJECT
TO RISKS AND UNCERTAINTIES, INCLUDING, BUT NOT LIMITED TO, REGULATORY
APPROVAL TIMING, PRODUCT DEMAND AND MARKET ACCEPTANCE RISKS, PATENT AND
INTELLECTUAL PROPERTY RISKS, THE EARLY STAGE OF PRODUCT DEVELOPMENT, AND
RELIANCE ON THIRD-PARTY MANUFACTURERS INCLUDING BUT NOT LIMITED TO CAPACITY
AND SUPPLY CONSTRAINTS, PRODUCTIONS YIELDS, REGULATORY APPROVAL TIMING AND
FOREIGN EXCHANGE RISKS, AS WELL AS OTHER RISKS DETAILED IN THE COMPANY'S
FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. ACTUAL RESULTS COULD
DIFFER MATERIALLY FROM THOSE CURRENTLY ANTICIPATED AS A RESULT OF THE
FOREGOING OR OTHER FACTORS.
____________________

PART I
Item 1. Business

MedImmune ("the Company") is a biotechnology company focused on developing
and marketing products for the prevention and treatment of infectious disease
and for use in transplantation medicine. Since commencing operations in 1988,
the Company has pursued a strategy of establishing an initial commercial base
using proven technologies and targeting well-understood diseases to support
longer-term product development.

The Company is currently marketing two products, CytoGam (Cytomegalovirus
Immune Globulin Intravenous (Human), CMV-IGIV) and RespiGam (Respiratory
Syncytial Virus Immune Globulin Intravenous (Human), RSV-IGIV). The Company
has filed a Biologic License Application ("BLA") requesting marketing
clearance in the United States for a third product, Synagis (palivizumab,
formerly known as MEDI-493). Additionally, the Company has five products
undergoing clinical trials and a number of product candidates and
technologies in the pipeline.

Products on the Market.
RespiGam
RespiGam was cleared by the United States Food and Drug Administration
("FDA") for marketing in the United States in January 1996. RespiGam is
indicated for the prevention of serious respiratory syncytial virus ("RSV")
disease in children under 24 months of age with a chronic lung condition
called bronchopulmonary dysplasia ("BPD") or a history of premature birth
(i.e., born at 35 weeks or less gestation). RespiGam is the only product
demonstrated to be safe and effective in reducing the incidence and duration
of RSV hospitalization and the severity of RSV illness in these high risk
infants.

RespiGam is an intravenous specialty immune globulin purified from donor
plasma screened for high levels of neutralizing antibodies against RSV. RSV
is the leading cause of pneumonia and bronchiolitis in children and results
in an estimated 90,000 hospitalizations and 4,500 deaths annually in the
United States. RSV outbreaks occur worldwide, usually during the late fall,
winter and early spring in the Northern Hemisphere. Certain populations of
infants, children and adults are at increased risk for developing severe RSV
disease. Of the more than 300,000 infants at risk, there are approximately
100,000 at extreme risk who are the most common end-users of RespiGam. These
include severely premature infants (i.e., less than or equal to 32 weeks
gestation) and infants with BPD.

The Company directly markets RespiGam to the leading 420 neonatal and
pediatric hospitals in the United States. These hospitals comprise
approximately 70% of the total potential business for RespiGam. The Company
received marketing clearance for RespiGam in Canada during 1997., however as
of December 31 the Canadian Blood Agency has not yet notified the Company as
to whether RespiGam will be reimbursed by the agency.

During 1997, RespiGam sales were $45.0 million. The majority of these sales
occurred in fourth quarter 1997 because of inherent seasonality of demand.
Sales in 1997 were limited by supply.

The Company is aware of one potential direct competitor to RespiGam, the
Company's own product candidate, Synagis. Sales of Synagis, if and when
cleared for marketing by the FDA, would largely replace RespiGam sales.
Consequently, if and when Synagis is cleared for marketing, the Company may
be compelled to record a reserve against RespiGam inventory. The magnitude
of this inventory reserve, if any, would be determined by a number of
factors, including but not limited to, the anticipated timing of Synagis
marketing clearance, the extent of RespiGam inventory on hand at that time,
the assessed market potential of Synagis and the assessed market potential of
RespiGam.

CytoGam
CytoGam is an intravenous specialty immune globulin product enriched in
antibodies against CMV and is marketed for the attenuation of primary
cytomegalovirus ("CMV") disease associated with kidney transplantation.
Approximately 75% of untreated donor-positive/recipient-negative kidney
transplant recipients are expected to develop CMV disease. Infection of a
transplant recipient with CMV by a donor organ is associated with increased
mortality and substantial morbidity including pneumonia, hepatitis,
opportunistic infections and possibly graft rejection. CytoGam has been shown
to reduce the incidence of severe CMV disease and opportunistic infections
associated with kidney transplantation. CytoGam was cleared for marketing by
the FDA in 1991 and was initially sold through an exclusive distribution
agreement with Connaught Laboratories. The Company began marketing CytoGam
through its own hospital-based sales force in 1993. Sales of CytoGam have
grown at a compounded annual rate of approximately 25% since 1993 to $20.3
million in 1997.

The Company continues to expand the opportunities for CytoGam outside the
United States. During 1997, the Company received marketing clearance for
CytoGam in Canada, Mexico and Poland and product was sold by distributors in
Turkey, the Czech Republic, Poland and Canada and on a named-patient basis in
Japan, Australia, Trinidad and Bolivia. The Company expects to submit over
the next 12 to 18 months new applications requesting marketing clearance in
certain European, Latin American and Middle Eastern countries.

The Company's orphan drug status expired in 1997 and there can be no
assurance that additional CMV intravenous specialty immune globulin products
will not be successfully commercialized by other companies. The Company is
aware of one other CMV immune globulin in development by NABI, Inc.

Products In Development
Synagis
Synagis (palivizumab; formerly known as MEDI-493) is a humanized monoclonal
antibody which has been evaluated by the Company in a number of clinical
trials and currently is being reviewed by the FDA for the prevention of
serious RSV disease in certain high-risk infants (for description of RSV
disease, see "RespiGam" above). Synagis is administered by intramuscular
injection, while RespiGam is administered by the more complex and time-
consuming process of intravenous infusion. Consequently, the Company believes
that Synagis has the potential to enhance patient care, reduce costs
associated with drug administration and improve convenience for parents,
physicians and nurses, as compared with RespiGam. Taken together, the
Company believes these benefits may provide the potential for Synagis to
reach a broader population of children than RespiGam. While RespiGam is
primarily a hospital-based drug, the Company believes a significant portion
of expanded Synagis use

will occur in pediatricians' offices.

During 1997, the Company announced the preliminary results of a double-blind
placebo-controlled Phase 3 clinical trial ("IMpact-RSV") conducted at 139
medical centers in 1,502 high-risk infants and children in the United States,
Canada and the United Kingdom. Initial analysis of these results suggested
that Synagis reduced the incidence of RSV-associated hospitalizations by 55
percent (p=0.00004; Fisher's exact test). The study included infants and
children who were either less than six months of age with a history of
prematurity (i.e., less than or equal to 35 weeks gestation) or less than
twenty-four months of age with BPD. Patients received a dose of either 15
mg/kg of Synagis (n = 1002) or placebo (n = 500) by intramuscular injection
each month for up to five doses during the RSV season, November 1996 through
April 1997. Patients were followed for one month after their last dose for
safety and efficacy endpoints. Analyses were conducted using the all-
randomized patient population. In the Company's preliminary analysis,
certain of the secondary endpoints also reached statistical significance,
including RSV hospital days, RSV ICU admissions and RSV hospital days with
increased supplemental oxygen.

The profile of adverse events and serious adverse events was similar between
the Synagis and placebo groups. Likewise, fatalities were balanced between
the treatment and placebo groups (0.4 percent (4/1002) in the group that
received Synagis and 1.0 percent (5/500) in the group that received placebo).
The fatality rates observed were consistent with those expected in these
children as a result of their severe underlying disease, and none of the
fatalities was attributed by the investigators to Synagis.

Based on these results and earlier pre-clinical and clinical studies,

the Company submitted in fourth quarter 1997 a BLA to the FDA requesting
marketing clearance of Synagis. This application was submitted with required
product manufacturing data from the Company's Gaithersburg, Maryland pilot
plant. The pilot plant is subject to FDA inspection and approval. The
Company cannot market Synagis in the United States unless and until licensed
to do so by the FDA. There can be no assurance that the FDA will grant such
clearance.

During fourth quarter 1997, the Company executed strategic agreements with
Abbott Laboratories ("Abbott") and Boehringer Ingelheim Pharma KG ("BI"),
related to the potential commercialization of Synagis. In December, the
Company and Abbott formed an exclusive worldwide marketing alliance
consisting of two separate agreements: a distribution agreement outside the
United States and a threshold-based co-promotion agreement within the United
States. Abbott is a global, diversified health care company with $11 billion
in sales in 130 countries and a strong presence in pediatrics. Outside the
United States, Abbott's international division will have the exclusive right
to market and distribute Synagis if and when cleared for marketing by
regulatory authorities. The Company and Abbott expect to submit regulatory
applications to Canadian and European authorities during 1998. Under terms
of the agreement, MedImmune received a $15 million payment in December 1997,
would receive an additional $30 million if and when Synagis receives United
States and European marketing approvals and would receive an additional $15
million upon the achievement of certain sales levels by Abbott. For sales
outside the United States, MedImmune would manufacture and sell Synagis to
Abbott at a price based on end-user sales. Within the United States,
Abbott's Ross Products division will co-promote Synagis with the Company.
The Company will be credited with all U.S. sales and Abbott will receive a
commission on sales above pre-determined thresholds. Each company is

responsible for its own selling expenses.

Additionally in December, the Company and BI, a world-leading manufacturer of
biopharmaceutical products for therapeutic use, signed an agreement to
supplement MedImmune's own production capacity for Synagis. During 1998, the
Company and BI expect to file a supplement to the Company's BLA for
additional manufacturing capacity utilizing the BI facility in Biberach,
Germany. Product manufactured at the BI facility will be required to launch
Synagis, if it is approved by regulatory authorities.

While the Company believes it has established a comprehensive development
program for Synagis and an extensive commercialization plan if cleared for
marketing, substantial risk remains: 1) no assurances can be given that the
FDA will grant Synagis marketing clearance based on the data supplied, 2) no
assurances can be given that such marketing clearance, if forthcoming, would
be granted in a timely manner, 3) no assurances can be given that BI will
successfully be able to manufacture Synagis with adequate production yields,
appropriate timeliness and lasting economic feasibility, 4) no assurances can
be given that the Company's pilot plant will be licensed by the FDA for the
manufacture of Synagis in a timely manner, 5) no assurances can be given that
the quantity of such product, if successfully manufactured, would be
appropriately matched to its demand if and when cleared for marketing, and 6)
no assurances can be given that Synagis, if cleared for marketing, would be
successfully sold in the markets targeted by the Company and Abbott.

Human Papillomavirus Vaccine
Human papillomaviruses ("HPVs") are responsible for the development of
genital warts and cervical cancer. There are currently no vaccines to

prevent these common sexually transmitted diseases that affect 24 to 40
million men and women in the United States. There are over 75 different
types of HPV associated with a variety of clinical disorders ranging from
benign lesions to potentially lethal cancers. Four types of HPV cause the
majority of genital warts and cervical cancer cases: HPV-6, HPV-11, HPV-16
and HPV-18.

The Company's first three HPV vaccine candidates, MEDI-501 (HPV-11), MEDI-503
(HPV-16) and MEDI-504 (HPV-18), each are composed of the HPV L1 capsid
protein which self assembles into virus-like particles (VLPs). The VLPs,
which are produced in vitro using recombinant DNA technology, imitate the
structure of natural papillomavirus, but are not infectious. When presented
to the immune system, VLPs may be able to elicit a similar immune response to
that seen with naturally occurring HPV. Scientists at the Company in
collaboration with a team at Georgetown University first demonstrated the
effectiveness of a VLP vaccine candidate using a dog model for papillomavirus
infection. These data, first published in "The Proceedings of the National
Academy of Sciences" in December 1995, provided the scientific rationale for
developing an analogous vaccine for humans.

The Company began a Phase 1 clinical trial with MEDI-501 in January 1997 to
evaluate its safety, tolerance, and immunogenicity. Initial data from the
trial suggested that MEDI-501 was safe and immunogenic. The Company also
expects to file Investigational New Drug (IND) applications during 1998 to
request clearance to begin clinical trials with MEDI-504 and MEDI-503. The
Company believes two or more HPV types would be necessary for a vaccine
capable of broadly preventing HPV disease of the genital tract.

In December 1997, the Company announced a strategic alliance with

SmithKline Beecham ("SB") to develop and commercialize the Company's HPV
vaccines. Under terms of the agreement, SB receives exclusive worldwide
rights to the Company's HPV vaccine technology and both companies will
collaborate on research and development activities. In January 1998, the
Company received an up-front payment of $15 million and an equity investment
of $5.0 million. Pursuant to the agreement, the Company will also receive
research funding beginning in 1998, potential developmental and sales
milestones, as well as royalties on any product sales. Total funding and
payments to the Company could total over $85 million.

Under terms of the agreement, the Company will conduct Phase 1 and Phase 2
clinical trials, manufacture clinical material for those studies and receive
funding from SB for these activities. SB is responsible for the final
development of the product, as well as regulatory, manufacturing, and
marketing activities.

MEDI-507
MEDI-507 is a humanized monoclonal antibody being developed by the Company in
collaboration with BioTransplant, Incorporated. The companies believe this
molecule has unique properties which may make it useful in one or more
applications where modulating an immune response may be desirable. These
applications may include treatment of graft-versus-host disease("GvHD"),
prevention of organ transplant rejection or in treating autoimmune diseases
such as psoriasis. MEDI-507 was derived from a rat monoclonal antibody
called BTI-322.

Both MEDI-507 and BTI-322 bind specifically to the CD2 antigen receptor found
on T cells and natural killer (NK) cells. Laboratory studies have suggested
that BTI-322 and MEDI-507 primarily inhibit the response of T cells directed
at transplant antigens while subsequently allowing

immune cells to respond normally to other antigens. The selectivity
and long lasting effects of this inhibition suggest that these molecules may
have potential utility in applications such as transplantation and autoimmune
diseases.

During 1997, the companies began the first human MEDI-507 clinical trial, a
Phase 1 open-label, dose-escalating, transplantation induction trial to
evaluate the safety and tolerance of MEDI-507 in patients receiving kidney
transplants. Also during late 1997, the Company submitted to the FDA two INDs
requesting clearance to begin a Phase 1/2 study evaluating MEDI-507 in GvHD
and to begin a Phase 1 study in psoriasis patients.

BTI-322 has been evaluated in over 60 patients in the United States and
Europe for its potential to prevent and treat organ graft rejection and GvHD.
BTI-322 was evaluated in a multi-center Phase 2 trial for treatment of acute
GvHD. Initial analysis of data from this trial suggested that BTI-322 was
well-tolerated. The average grade of GvHD improved during treatment with BTI-
322 (p=0.0005), however many patients relapsed after treatment was stopped.
In addition, preliminary analyses of data from two Phase 1/2 clinical studies
were presented in August 1996 at the XVI International Congress of the
Transplantation Society in Barcelona, Spain. BTI-322 in these studies also
appeared well-tolerated and showed initial promise in preventing and treating
kidney transplant rejection. A Phase 1/2 clinical trial evaluating BTI-322
in the treatment of acute kidney rejection is underway at the Massachusetts
General Hospital under an IND application submitted to the FDA by
BioTransplant. In initial studies, both MEDI-507 and BTI-322 appear to
possess similar biological properties. The companies expect to replace
development of BTI-322 with that of MEDI-

507 because of the potentially improved immunogenicity of a humanized
antibody such as MEDI-507 compared with a murine antibody such as BTI-322.

There are approximately 19,000 solid organ transplants and 11,000 bone marrow
transplantation procedures annually in the United States. Despite
significant improvements in the transplantation arena, life-threatening
complications such as GvHD and organ rejection remain serious medical
problems. GvHD is the most common complication of bone marrow or stem cell
transplantation. Approximately 50 percent of bone marrow transplants result
in GvHD which occurs when immune cells of the foreign graft, i.e., the donor
bone marrow, initiate an inflammatory reaction against the tissues of the
recipient. Typically, the disease is treated with steroids although
approximately 50 percent of patients fail to respond to steroid therapy.
Patients who develop moderate or severe GvHD have over a 70 percent chance of
death despite diverse treatments. Lack of understanding of the physiologic
mechanism of disease has been a major impediment to the development of more
effective treatments. Both T cells and natural killer (NK) cells may play a
role in development of GvHD. MEDI-507 which specifically inhibits both types
of cells may provide certain advantages over current therapies. The Company
is aware of a number of companies developing products to prevent and treat
GvHD.

Autoimmune diseases are of major medical importance worldwide and include
common afflictions like rheumatoid arthritis, multiple sclerosis, Crohn's
disease and psoriasis. The Company is aware of a number of companies
developing products to treat psoriasis and other autoimmune diseases.

Lyme Disease Vaccine
Lyme disease is the most common insect-borne disease in the United States.
Virtually every state within the United States has reported cases of Lyme
disease, with an annual nationwide reported incidence of 16,455 new cases in
1996, a 41 percent increase over 1995. Lyme disease is also reported in
Europe, Japan, China, Russia and Australia. The disease is caused by a
bacterium know as Borrelia burgdorferi ("B. burgdorferi") and is transmitted
through a tick, Ixodes scapularis, which is most commonly found on the white-
footed mouse or deer.

The Company is developing a B. burgdorferi protein called decorin binding
protein ("DbpA") which initial animal studies suggest may provide protection
against B. burgdorferi infection. Unlike antibodies to vaccines in
development by other companies, DbpA antibodies can be given to mice four
days after infections and still clear the bacterium from animals. This may
allow a significantly greater window of opportunity for a protective immune
response to clear infection. The Company believes that DbpA is the only
protein identified form B. burgdorferi to date for which this effect has been
demonstrated. In addition, antibodies from animals immunized with DbpA
inhibited growth of many strains of the Lyme disease-causing bacteria not
inhibited by antibodies to another vaccine candidate in development by the
Company, including some species of Lyme bacteria commonly found outside the
United States. These results suggest that DbpA may provide an improved Lyme
disease vaccine candidate or, alternately, a supplement to the vaccine
candidates currently in development.

The Company is aware of two companies, SmithKline Beecham and Pasteur Merieux
Connaught, that have submitted BLAs to the FDA for Lyme disease vaccines
based on a protein known as OspA. The Company is also aware of at least one
other company developing a Lyme disease vaccine based

on a protein known as OspC. The Company believes that given the clinical
success of OspA, it is likely that DbpA would need to be combined with OspA
to result in a vaccine that is acceptable to the marketplace.

Urinary Tract Infection Vaccine
UTIs are a significant medical problem and one of the most common disorders
prompting medical attention in otherwise healthy women and children. UTIs,
caused by the bacterium Escherichia coli (E. coli), result in 7-8 million
physician and hospital visits per year at a cost of greater than $1 billion.
It is estimated that by age 30, roughly 50 percent of women have had at least
one infection and 2-10 percent are affected by recurrent infections. Females
are generally more prone to UTIs simply because of their anatomy. Recent
studies have shown that, on average, women who are 18-40 years old get 1-2
infections over a two year period. Older adults are also at risk with the
incidence as high as 33 out of 100 people.

Currently, there are no vaccines to prevent UTIs. Most infections can be
treated with antibiotics, however, recurrence is common and emerging
antibiotic resistant bacteria create an additional threat. Earlier attempts
to use pili, the hair-like protein appendages on the surface of bacteria, as
vaccine targets were not successful in protecting against a broad range of
pathogenic bacteria, including E. coli, because of the variation in the major
component of the pili. The identification of specific proteins, or
"adhesins", at the end of pili which facilitate the attachment of E. coli to
human tissue, provided a novel target for vaccine development. The Company's
vaccine strategy is based on blocking these adhesins, preventing the disease-
causing bacteria from binding and accumulating in the bladder. The novel

target of the Company's vaccine candidate is the FimH adhesin. FimH does not
vary widely among the different strains of E. coli which cause UTIs. The
Company believes this is a requisite quality for development of a broadly
effective UTI vaccine.

During 1997, the Company published in the journal "Science" the results of
experiments which suggested that a FimH-based vaccine was able to prevent
UTIs in mice. In these studies, mice vaccinated with the Company's FimH
vaccine showed a greater than 99 percent reduction of bladder bacteria
compared to control animals. The effect persisted for 29 weeks, the entire
length of the study. Additionally, FimH antibodies were able to block the
ability of a broad range (94 percent) of E. coli strains to bind to bladder
cells in vitro.

The Company and its collaborators are currently conducting animal and primate
vaccination studies and designing clinical production and purification
protocols for its first UTI vaccine candidate. Adhesin-based vaccines may
also be an effective strategy for other diseases caused by bacteria.

Streptococcus pneumoniae Vaccine
Streptococcus pneumoniae is a major cause of pneumonia, middle-ear infections
and meningitis worldwide, especially in the very young or elderly. Pneumonia
causes more than one million deaths per year and is the most common cause of
childhood death in developing countries. In industrialized countries,
pneumococcal pneumonia is a serious problem among the elderly. Middle-ear
infections affect almost every child at least once during the first two years
of life. Vaccination against pneumococcal infections has become more urgent
in recent years due to the emergence of antibiotic-resistant strains
throughout the world.

The Company has established a research collaboration with St. Jude Children's
Research Hospital("St. Jude") to develop products for the prevention and
treatment of Streptococcus pneumoniae infection. The Company has been
granted a worldwide exclusive license from the Rockefeller University to
commercialize product candidates developed from a novel set of genes
discovered by scientists at St. Jude, formerly at Rockefeller University. In
addition, research efforts are underway by scientists at the Company and St.
Jude to identify novel conserved surface proteins for potential vaccine
applications. During 1998, promising candidate proteins are expected to be
characterized further in a number of in vitro and in vivo models to determine
their potential as vaccine candidates.

MEDI-491, B19 Parvovirus Vaccine
Discovered in 1975, B19 parvovirus has been linked to a number of serious
conditions including certain types of miscarriages in pregnant women, life-
threatening sudden reduction of red blood cells in sickle cell anemia
patients, chronic anemia in AIDS and chemotherapy patients, and persistent
arthritis in some adults. MEDI-491 is a vaccine intended to prevent human
B19 parvovirus infection. MEDI-491 utilizes virus-like-particle ("VLP")
technology. By producing two natural B19 parvovirus proteins in the correct
proportions in an insect cell recombinant protein production system, the
Company and collaborators at the National Heart, Lung, and Blood Institute
("NHLBI") are able to generate VLPs which resemble the natural B19 parvovirus
particles, but are not infectious. The Company has completed a Phase 1
clinical trial to evaluate the safety of MEDI-491. The Company believes that
a successful B19 parvovirus vaccine could be used to immunize women entering
their child-bearing years to protect them from experiencing risk of B19
parvovirus-induced miscarriages. Alternately, a successful B19 parvovirus
vaccine could be incorporated into routine childhood

immunization programs to reduce the prevalence of this virus.

Products and Product Development Programs
The following table summarizes the indications and current status of the
Company's products and product development programs.

Product Indication Status(1)
- ---------------------------------------------------------------------------
Infectious Disease Products

RespiGam Prevention of serious RSV disease Marketed
RSV Immune in infants with prematurity or lung
Globulin (IV) disease

Synagis RSV Prevention of RSV disease in BLA
Monoclonal high-risk infants Submitted
Antibody (IM)

MEDI-501 HPV-11 Prevention of genital warts Phase 1
Vaccine(2)

MEDI-491 B19 Prevention of B19 parvovirus Phase 1
Parvovirus infection
Vaccine

MEDI-504 HPV-18 Prevention of cervical cancer Pre- clinical
Vaccine(2) development

MEDI-503 HPV-16 Prevention of cervical cancer Pre-clinical
Vaccine(2) development

Second Generation Prevention of Lyme disease Pre-clinical
Lyme Disease development
Vaccine

E. coli Vaccine Prevention of urinary tract Pre-clinical
(FimH Adhesin) infections development

S. pneumoniae Prevention and treatment of Research
Vaccine streptococcus pneumoniae infection

Transplantation Products

CytoGam Attenuation of primary CMV disease Marketed
in donor positive/recipient negative
kidney transplant patients

CytoGam Prevention of CMV disease in all Product
solid organ transplant patients license appl'n
amendment
submitted

Synagis RSV Treatment of RSV disease in bone Phase 1
Monoclonal marrow transplant recipients
Antibody

MEDI-507 Prevention of kidney rejection Phase 1
Monoclonal
Antibody

MEDI-507 Treatment of graft-versus-host Phase 1/2
Monoclonal disease
Antibody

MEDI-507 Treatment of psoriasis Phase 1
Monoclonal
Antibody
_______________
(1) "Phase 1" and "Phase 2" clinical trials generally involve
administration of a product to a limited number of patients
to evaluate safety, dosage and, to some extent, efficacy.
"Phase 3" clinical trials generally examine the efficacy
and safety of a product in an expanded patient population at
multiple clinical sites.
(2) These products are being co-developed by the Company and SmithKline
Beecham. The Company is entitled to certain milestone payments and
royalties on any sales, if and when cleared for marketing by the FDA.

Marketing, Research, Development and Collaborative Agreements
The Company's internal research programs are augmented by collaborative
projects with its scientific partners. As part of its strategy, the Company
has established alliances with pharmaceutical and other biotechnology
companies, academic scientists and government laboratories. Currently, its
principal strategic alliances are the following:

Abbott Laboratories
In December 1997, the Company entered into two agreements with Abbott
Laboratories ("Abbott"). The first agreement calls for Abbott to co-promote
Synagis in the United States, if and when licensed for marketing

by the FDA. The second agreement allows Abbott to distribute Synagis outside
the United States, if and when licensed for marketing by the appropriate
regulatory authorities. Outside the U.S., the Company would manufacture and
sell Synagis to Abbott at a price based on end user sales and could receive
additional milestone payments based on meeting certain milestones and sales
thresholds. In the U.S., Abbott would receive a percentage of net sales in
excess of annual sales thresholds. Each company is responsible for its own
selling expenses.

American Home Products Corporation
The Company's strategic alliance with American Home Products ("AHP") calls
for the two companies to co-develop and co-promote RespiGam. The agreement
provided for AHP to fund a portion of the cost of the development of RespiGam
and potentially co-promote the product in the United States. AHP shares in
the profits and losses of RespiGam in the U.S. The alliance provides for the
Company to receive royalties on any sales of AHP's RSV vaccine product,
currently in Phase 2 clinical development and for AHP to receive royalties on
any sales of Synagis.

Baxter Healthcare Corporation
In June 1995, the Company entered into an exclusive, royalty-bearing license
agreement with Baxter Healthcare Corporation ("Baxter") to commercialize
RespiGam outside North America. Concurrent with the execution of the license
agreement, Baxter also purchased 826,536 shares of Common Stock for $9.5
million. Following the results from the Company's Phase 3 clinical trial of
Synagis, sales of which, if cleared for marketing, are expected to
substantially replace RespiGam, Baxter terminated this agreement and returned
to the Company all rights to commercialize RespiGam outside North America.
Baxter has no rights to Synagis.

BioTransplant, Incorporated
In October 1995, the Company and BioTransplant, Incorporated ("BTI") formed a
strategic alliance for the development of products to treat and prevent organ
transplant rejection. The alliance is based upon the development of products
derived from BTI's anti-CD2 antibody, BTI-322, the Company's anti-T cell
receptor antibody, MEDI-500, and future generations of products derived from
these two molecules (such as MEDI-507, or humanized BTI-322). Pursuant to the
alliance, the Company received an exclusive worldwide license to develop and
commercialize BTI-322 and any products based on BTI-322, with the exception
of the use of BTI-322 in kits for xenotransplantation or allotransplantation.
The Company has paid BTI $4.5 million in license fees and research support
through December 31, 1997. The Company has assumed responsibility for
clinical testing and commercialization of any resulting products. BTI maywill
receive research support and milestone payments which could total up to an
additional $11.0 million, as well as royalties on any sales of BTI-322,
MEDI-500, MEDI-507 and future generations of these products, if any.

Human Genome Sciences, Inc.
In July 1995, the Company entered into a collaborative research and
development relationship with Human Genome Sciences, Inc. ("HGS") to create
antibacterial vaccines and immunotherapeutic products based upon the genomic
sequences of bacteria. The Company and HGS have collaborative research
efforts underway to develop vaccines for non-typeable Haemophilus influenzae
and Streptococcus pneumoniae. Rights to another genomic sequence for vaccine
development, Helicobacter pylori, were out-licensed to Oravax, Inc. and
Pasteur Merieux Connaught in November 1996 for license payments as well as
milestone and royalty obligations. Pursuant to a collaboration and license
agreement between the Company and HGS, the Company will be solely responsible
for the commercialization of any products developed through the
collaboration, and HGS will be

entitled to royalties based upon the extent to which any products jointly
developed are covered by patents or license rights held by HGS.

Massachusetts Health Research Institute and Massachusetts Biologics
Laboratories
In August 1989 and April 1990, the Company entered into a series of research,
supply and license agreements with Massachusetts Health Research Institute
("MHRI") and Massachusetts Public Health Biologics Laboratories, then a
division of the Massachusetts Department of Public Health ("The State Lab"),
covering products intended for the prevention or treatment of CMV and RSV
infection and other respiratory virus infections by immune globulins or
monoclonal antibodies. The Company has agreed to pay royalties on all sales
using the licensed technology. Pursuant to the agreements, the Company paid
$13.3 million in 1997, $11.8 million in 1996 and $5.8 million in 1995, for
royalties, process development and manufacturing. MHRI has rights to receive
royalties on any future sales of Synagis, if and when approved by the FDA.
See Note 13 of Notes to Financial Statements.

SmithKline Beecham
In December 1997, the Company entered into a strategic alliance with
SmithKline Beecham PLC ("SB") to research, develop, manufacture and
commercialize therapeutic and prophylactic HPV vaccines. In exchange for
exclusive worldwide rights to the Company's HPV technology, SB has agreed to
provide the Company with an up-front payment of $15 million, future funding
and potential developmental and sales milestones which together could total
over $85 million, as well as royalties on any product sales. Under the terms
of the agreement, the companies will collaborate on research and development
activities. MedImmune will conduct Phase 1 and Phase 2 clinical trials and
manufacture clinical material for those studies. SB is responsible for the
final development of the product, as

well as regulatory, manufacturing, and marketing activities. In January
1998, the Company received the $15 million payment from SB and completed the
sale of 83,410 shares of common stock to SB resulting in net proceeds to the
Company of $5.0 million.

Other Agreements.
The Company has a number of other collaborative and business agreements with
academic institutions and business corporations, including agreements with 1)
Washington University in St. Louis covering development of pilus-based
anti-bacterial vaccines, 2) Georgetown University, the German Cancer Research
Center and the University of Rochester covering development of vaccines for
human papillomaviruses and 3) Scientists at St. JudeRockefeller University
for the discovery and commercialization of products to treat and prevent
Streptococcus pneumoniae. In addition, the Company has license agreements
with third parties foron CytoGam, RespiGam, Synagis and substantially all of
its other potential products. Under such license agreements the Company is
obligated to pay royalties on any sales of these products.

Marketing and Sales
The Company has developed a sales and marketing organization which it
believes is responsive to the increased importance of managed care and the
need of the healthcare industry to provide lower costs and higher quality
care.
The Company's first product, CytoGam, was originally marketed by a third
party as the Company's exclusive distributor. In December 1992, the Company
reacquired marketing rights to CytoGam and in January 1993, the Company
commenced marketing of CytoGam in the United States through its own sales
force (then consisting of 14 people) focused on 250 leading transplantation
hospitals. Sales outside the United States are made through regional
distributors.

The Company now has approximately 75 people devoted to sales and marketing of
the Company's two approved products. Approximately 48 sales and managed care
representatives cover approximately 500 hospitals and clinics in the United
States, which specialize in transplantation and/or pediatric/neonatal care,
for the promotion of CytoGam and RespiGam, respectively. Each sales
representative is responsible for selling both CytoGam and RespiGam.

The Company has established a collaboration with Abbott, through its Ross
Pediatrics Division, to co-promote Synagis in the U.S., if and when Synagis
is cleared for marketing by the FDA. In addition, Abbott has been selected
as the Company's exclusive distributor of Synagis outside of the U.S., if and
when Synagis is cleared for marketing by the appropriate regulatory
authorities. There can be no assurance that such approvals will be granted,
or, if granted, that approvals will occur in a timely manner. See Footnote
10 in the Notes to Financial Statements for additional information related to
the agreements with Abbott.

Manufacturing and Supply The Company has agreements with the State Lab and
MHRI pursuant to which the Company agreed to license certain technology from
the Commonwealth of Massachusetts and to collaborate on the development of
the technology. The technology relates to the two products currently being
marketed by the Company, RespiGam and CytoGam.
At the end of 1996, the Inspector General of the Commonwealth of
Massachusetts publicly issued a report alleging, among other things, that
certain present and former employees of the State Lab or MHRI were personally
receiving from MHRI, in violation of state law, a portion of the royalties
the Company was paying to MHRI on sales of RespiGam. The report also alleged
that the terms of the agreements were unfair to the Commonwealth and,
accordingly, the Commonwealth now has the right to rescind the agreements
notwithstanding the fact that the parties had operated under those agreements
for over seven years. The Inspector General has no enforcement powers.
The Company regards the allegations of the Inspector General, as they
relate to the Company, to be without merit. The Company has denied those
allegations and in early 1997 provided the Commonwealth with a detailed
rebuttal of the claims of the Inspector General pertaining to the Company.
The Company has been engaged with representatives of the Commonwealth in
negotiations to settle the matter on a mutually satisfactory basis. While
the Company believes that substantial progress has been made toward resolving
this matter in a manner generally acceptable to the Company (with no loss of
the Company's rights to technology and no interruption of operations under
the agreements, but with increased royalties), there can be no assurance that
a final resolution will, in fact, be achieved. If no settlement is reached,
the Company may be forced to litigate with the Commonwealth, and there can be
no assurance that the outcome of such a litigation would be favorable to the
Company. An unfavorable outcome could have a material adverse effect on the
Company.
The Company has entered into manufacturing, supply and purchase
agreements in order to provide a supply of human plasma and production
capability for CytoGam and RespiGam. CytoGam and RespiGam are produced from
human plasma collected from donors who have been screened to have higher
concentrations of antibodies against CMV and RSV, respectively. Human plasma
for CytoGam and RespiGam is converted to an intermediate raw material
(Fraction II+III paste) under a supply agreement with Baxter. The Company
entered into an agreement with V.I. Technologies, Inc. in 1997 to supply
additional Fraction II+III paste.

The State Lab processes the Fraction II+III paste into bulk product. The

Company has an informal arrangement with the State Lab for planned
production of bulk product for CytoGam and RespiGam. The State Lab holds the
sole product and establishment licenses for CytoGam and RespiGam. The
Company also has an agreement with Connaught Laboratories, Inc. ("Connaught")
to fill and package CytoGam and RespiGam. If the State Lab, the suppliers of
the Fraction II+III paste, or Connaught is unable to satisfy the Company's
product requirements on a timely basis or is prevented for any reason from
manufacturing CytoGam or RespiGam, the Company may be unable to secure an
alternative supplier or manufacturer without undue and materially adverse
operational disruption and increased cost. Recently, the Company has
experienced product shortages which have limited product sales without
reducing sales and marketing costs. See Footnote 13 in the Notes to
Financial Statements for additional information related to the agreements
with the State Lab.

In 1997, the Company entered into a manufacturing and supply agreement with
BI to provide supplemental production capability for Synagis, a humanized
monoclonal antibody product for which a BLA was submitted to the FDA in
December 1997. BI must scale up production to a level not previously
attempted. No assurance can be given that BI will successfully be able to
manufacture Synagis at these levels, nor that it can achieve adequate
production yield, produce product with appropriate timeliness, or at an
acceptable cost. Product manufactured at the BI facility will be required to
launch Synagis, if and when it is licensed for marketing by regulatory
authorities. During 1998, the Company is expected to file a supplemental
amendment to its BLA for Synagis for additional manufacturing capacity
utilizing the BI facility. Should BI be unable to supply Synagis to the
Company for any reason, there can be no assurance that the Company would be
able to secure an alternate manufacturer in a timely basis or without
increased

cost. Nor can there be any assurances that the Company or BI will be
licensed by the appropriate regulatory authorities to manufacture or market
the product.

The Company entered into an agreement with Chiron Corporation ("Chiron") in
1997, in which Chiron will fill and package Synagis produced at the
Gaithersburg pilot plant and Frederick manufacturing plant. The term of the
agreement is for three years or until such earlier time as the Company is
able to fulfill all of its own requirements. Filling and packaging of
Synagis at Chiron is subject to FDA approval.

In July 1996, the Company entered into an engineering, procurement,
construction and validation services agreement with Fluor Daniel, Inc.
("Fluor") to design and construct a manufacturing facility located on a 27
acre site in Frederick, Maryland. The Company has spent $49.0 million through
December 31, 1997 on construction of the facility. The facility,
construction of which is substantially complete, is a multi-use biologics
facility intended to provide production capability for the manufacture of
immune globulins and by-products from human plasma. In addition, the facility
contains a cell culture production area for the manufacture of protein-based
products, such as Synagis, MEDI-501 and MEDI-507, if and when they are
cleared for marketing by the FDA. There can be no assurance that the facility
will receive regulatory approval for its intended purposes. This facility is
subject to inspection and approval by the FDA and any resulting sales of
product from this facility would not commence for at least the next 18
months. The Company has no experience in commercial manufacturing.
Accordingly, even if the necessary approvals were obtained, the Company would
encounter new risks associated with commercial manufacturing, including
potential scale-up issues, cost overruns, product defects and environmental
problems.

Furthermore, there can be no assurance that the Company will be able to
manufacture products at a cost that is competitive with third party
manufacturing operations.

The Company produces materials for clinical trials in its pilot plant
facility in Gaithersburg, Maryland. Materials currently being used in
clinical trials for MEDI-501, MEDI-507, and MEDI-491 have been produced at
the Company's pilot plant. The Company completed an expansion of the pilot
plant facility in 1997 to support the production of materials for Phase 3
clinical trials and market entry production requirements, principally for
Synagis. There can be no assurance that appropriate regulatory approvals will
be obtained to use the facility for market entry manufacturing.

Patents, Licenses and Proprietary Rights
Products currently being developed or considered for development by the
Company are in the area of biotechnology, an area in which there are
extensive patent filings. The patent position of biotechnology firms
generally is highly uncertain and involves complex legal and factual
questions. To date, no consistent policy has emerged regarding the breadth
of claims allowed in biotechnology patents. Accordingly, there can be no
assurance that patent applications owned or licensed by the Company will
result in patents being issued or that, if issued, such patents will afford
protection against competitors with similar technology.
The Company believes that there are other patents issued to third
parties and/or patent applications filed by third parties which could have
applicability to each of the Company's products and product candidates and
could adversely affect the Company's freedom to make, have made, use or sell
such products or use certain processes for their

manufacture. The Company is unable to predict whether it will ultimately be
necessary to seek a license from such third parties or, if such a license
were necessary, whether such a license would be available on terms acceptable
to the Company. The necessity for such a license could have a material
adverse effect on the Company's business.
There has been substantial litigation regarding patent and other
intellectual property rights in the biotechnology industry. Litigation may be
necessary to enforce certain intellectual property rights of the Company.
Any such litigation could result in substantial cost to and diversion of
effort by the Company.

Government Regulation
The production and marketing of the Company's products and research and
development activities are subject to regulation for safety and efficacy by
numerous governmental authorities in the United States and other countries.
In the United States, vaccines, biologics, drugs and certain diagnostic
products are subject to FDA review and licensure. The federal Food, Drug and
Cosmetics Act, the Public Health Service Act and other federal statutes and
regulations govern or influence the testing, manufacture, safety, labeling,
storage, record keeping, licensure, advertising and promotion of such
products. No assurances can be given that any products under development will
be licensed for marketing by the FDA or, if approved, that the product would
be successfully commercialized or maintained in the marketplace.
Non-compliance with applicable requirements could result in fines, recall or
seizure of products, total or partial suspension of production, refusal of
the government to approve product license applications, restrictions on the
Company's ability to enter into supply contracts and criminal prosecution.
The FDA also has the authority to revoke product licenses and establishment
licenses previously granted.

The FDA may designate a drug as an Orphan Drug for a particular use, in which
event the developer of the drug may be entitled to a seven year marketing
exclusivity period. CytoGam and RespiGam have been designated as Orphan Drugs
for certain indications by the FDA. Accordingly, RespiGam has market
exclusivity for its currently licensed indication through January 17, 2003.
Marketing exclusivity for CytoGam's currently licensed indication expired in
1997.

The Company is also subject to regulation by the Occupational Safety and
Health Administration ("OSHA") and the Environmental Protection Agency
("EPA") and to regulation under the Toxic Substances Control Act, the
Resources Conservation and Recovery Act and other regulatory statutes, and
may in the future be subject to other federal, state or local regulations.
OSHA and/or the EPA may promulgate regulations concerning biotechnology that
may affect the Company's research and development programs. The Company is
unable to predict whether any agency will adopt any regulation which would
have a material adverse effect on the Company's operations. The Company
voluntarily attempts to comply with guidelines of the National Institutes of
Health regarding research involving recombinant DNA molecules. Such
guidelines, among other things, restrict or prohibit certain recombinant DNA
experiments and establish levels of biological and physical containment that
must be met for various types of research.

Sales of pharmaceutical and biopharmaceutical products outside the United
States are subject to foreign regulatory requirements that vary widely from
country to country. Whether or not FDA licensure has been obtained, licensure
of a product by comparable regulatory authorities of foreign countries must
be obtained prior to the commencement of marketing the product in those
countries. The time required to obtain such licensure may be longer or
shorter than that required for FDA approval, and no

assurances can be given that such approval will be obtained.

Competition
The biotechnology and pharmaceutical industries are characterized by rapidly
evolving technology and intense competition. The Company's competitors
include pharmaceutical, chemical and biotechnology companies, many of which
have financial, technical and marketing resources significantly greater than
those of the Company. In addition, many specialized biotechnology companies
have formed collaborations with large, established companies to support
research, development and commercialization of products that may be
competitive with those of the Company. Academic institutions, governmental
agencies and other public and private research organizations are also
conducting research activities and seeking patent protection and may
commercialize products on their own or through joint ventures.

The Company is aware of certain products manufactured by competitors that are
used for the prevention or treatment of certain diseases the Company has
targeted for product development, including CMV, RSV, Lyme disease, HPV
infections and organ graft rejection. In the prevention of CMV disease, the
Company's CytoGam competes with several other products including other
antiviral drugs, standard immune globulin preparations and intravenous and
oral ganciclovir, marketed by Hoffmann-La Roche Inc. The Company is aware
that a number of physicians have prescribed CytoGam in combination with
ganciclovir for the prevention of CMV disease in certain patients.

The Company believes that for the prevention of RSV disease, the Company's
RespiGam does not compete directly with any product; however, the Company is
aware of one product in the U. S., ribivirin, which is

indicated for the treatment of RSV disease. Additionally, the Company's
Synagis is currently under review by the FDA. Synagis has been evaluated in
a Phase 3 clinical trial for its ability to prevent RSV disease in a
population of infants and children similar to that for which RespiGam is
indicated. If Synagis were to be cleared for marketing in the United States,
the Company believes sales of RespiGam would be substantially adversely
affected. The existence of these products, or other products or treatments
of which the Company is not aware, or products or treatments that may be
developed in the future, may adversely affect the marketability of products
developed by the Company.

The Company expects its products to compete primarily on the basis of product
efficacy, safety, patient convenience, reliability, price and patent
position. In addition, the first product to reach the market in a therapeutic
or preventive area is often at a significant competitive advantage relative
to later entrants to the market. The Company's competitive position will also
depend on its ability to attract and retain qualified scientific and other
personnel, develop effective proprietary products, implement product and
marketing plans, obtain patent protection and secure adequate capital
resources.
EXECUTIVE OFFICERS OF THE COMPANY

Officer
Name Age Position Since
- -----------------------------------------------------------------------
Wayne T. Hockmeyer, Ph.D. 53 Chairman and Chief Executive 1988
Officer
David M. Mott 32 President and Chief Operating 1992
Officer
Franklin H. Top, Jr., 62 Executive Vice President and 1988
M.D. Medical Director

David P. Wright 50 Executive Vice President- 1990
Sales and Marketing
Bogdan Dziurzynski 49 Senior Vice President 1994
Regulatory Affairs and
Quality Assurance
James F. Young, Ph.D. 45 Senior Vice President 1989
Research and Development

Dr. Hockmeyer founded the Company in April 1988 as President and Chief
Executive Officer and was elected to the Board of Directors in May 1988. He
became Chairman of the Board of Directors in May 1993. From 1986 to 1988,
Dr. Hockmeyer served as Vice President, Research and Development, of Praxis
Biologics, Inc. ("Praxis"). From 1980 to 1986, Dr. Hockmeyer served as
Chairman, Department of Immunology, Walter Reed Army Institute of Research.
Dr. Hockmeyer is a member of the Board of Directors of Digene Corporation and
serves on the Advisory Board of the University of Maryland Biotechnology
Institute. He is also a member of the Board of Directors of the High
Technology Council of Maryland and Chairman of the Maryland BioScience
Alliance. Dr. Hockmeyer received a Bachelor of Science degree from Purdue
University and a doctorate from the University of Florida.

Mr. Mott joined the Company in April 1992 as Vice President, with
responsibility for business development, strategic planning and investor
relations. In 1994, Mr. Mott assumed additional responsibility for the
medical and regulatory groups, and in 1995 was promoted to Executive Vice
President and Chief Financial Officer. In November 1995, Mr. Mott was
promoted to the position of President and Chief Operating Officer and was
elected to the Board of Directors. Prior to joining the Company, he was a
Vice President in the Health Care Investment Banking Group at Smith Barney,
Harris Upham & Co., Inc.

At Smith Barney, where he was employed from July 1986 to April 1992, Mr.
Mott's activities included public and private equity and debt financings as
well as merger and acquisition work for biotechnology, medical services, and
medical product and device companies. He holds a bachelor of arts degree in
economics and government from Dartmouth College.

Dr. Top joined the Company in June 1988 as Executive Vice President. He was
elected to the Board of Directors in July 1988 and became the Company's
Medical Director in 1990. From 1987 to 1988, Dr. Top served as Senior Vice
President for Clinical and Regulatory Affairs at Praxis. Prior to 1987, Dr.
Top served for 22 years in the U.S. Army Medical Research and Development
Command, where he was appointed Director, Walter Reed Army Institute of
Research in 1983.

Mr. Wright, prior to joining the Company in 1990, was President of Pediatric
Pharmaceuticals, Inc. (1989-1990) and Vice President of the Gastrointestinal
Business Group at Smith, Kline and French Laboratories.

Mr. Dziurzynski, prior to joining the Company in 1994, was Vice President of
Regulatory Affairs and Quality Assurance at Immunex Corporation.

Dr. Young, prior to joining the Company in 1989, was Director, Department of
Molecular Genetics at Smith, Kline and French Laboratories.

EMPLOYEES
As of February 15, 1998, the Company had 344 full time employees. These

include 76 marketing and sales personnel, 37 clinical and regulatory affairs
personnel, 67 manufacturing facility personnel, and 103 research and
development personnel. The Company considers relations with its employees to
be good.

ITEM 2. PROPERTIES
The Company occupies, under a lease expiring in 2006, a facility in
Gaithersburg, Maryland, that contains approximately 81,000 square feet of
research, development and administrative space. In 1996, the Company
acquired a 27 acre parcel of land in Frederick, Maryland. The Company has
substantially completed construction of a 91,000 square foot multi-use
biologics facility on this site to provide for the manufacture of immune
globulins and by-products from human plasma. In addition, the facility is
designed to contain a cell culture production area for manufacture of
products such as Synagis, if and when it is licensed by the FDA.

ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any material legal proceedings.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
PART II
ITEM 5. MARKET FOR MEDIMMUNE, INC.'S COMMON STOCK
AND RELATED SHAREHOLDER MATTERS

The Company's common stock trades on The Nasdaq Stock Market under the symbol
"MEDI". At February 28, 1998, the Company had 315 common stockholders of
record. This figure does not represent the actual

number of beneficial owners of common stock because shares are
generally held in "street name" by securities dealers and others for the
benefit of individual owners who may vote the shares. The number of
beneficial shareholders as of February 28, 1998 was over 10,000.

The following table shows the range of high and low closing prices and year
end closing prices for the common stock for the two most recent fiscal years.

1997 1996
---- ----

High Low High Low
---- ---- ---- ----
First Quarter $ 17 1/2 $ 13 3/8 $ 20 1/8 $14
Second Quarter 19 3/4 11 3/8 20 15 1/2

Third Quarter 37 1/4 16 1/2 17 1/2 11 3/8
Fourth Quarter 43 1/2 31 17 3/4 14
Year End Close $ 42 7/8 $ 17

ITEM 6. SELECTED FINANCIAL DATA
(in thousands, except per share data)

RESULTS FOR THE YEAR 1997 1996 1995 1994 1993
----- ----- ---- ---- ----
Product sales $65,271 $35,782 $16,173 $12,054 $8,446
Other 15,693 5,317 11,263 6,804 6,633
------- ------- -------- ------- -------
Total revenues 80,964 41,099 27,436 18,858 15,079
Research and develop-
ment expenses 40,669 32,192 26,417 21,939 14,936
Net loss (36,895) (29,544) (22,671) (18,828) (13,217)
Basic and Diluted
Loss Per Common Share (1.59) (1.41) (1.41) (1.29) (0.96)

YEAR END POSITION
Cash and
marketable
securities
Total assets $50,326 $114,765 $38,039 $22,527 $44,424
Long term debt 170,336 163,971 57,332 44,724 61,195
Shareholders' 85,363 70,874 1,984 2,090 2,186
equity
40,536 72,865 43,779 34,194 53,021

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
This review contains management's discussion of the Company's operational
results and financial condition and should be read in conjunction with the
accompanying financial statements.

OVERVIEW
MedImmune commenced operations in April 1988 and, through 1990, revenue
was generated solely from research and development agreements and research
grants. In 1991, contract revenues rose substantially and the Company began
selling its first product, CytoGam, to an exclusive distributor. In December
1992, the Company reacquired the CytoGam marketing rights from its
distributor and launched an expanded marketing program for this product
through its own sales force.
On January 18, 1996, the Company's second product, RespiGam, was
licensed for marketing by the U.S. Food and Drug Administration ("FDA") for
the prevention of serious lower respiratory tract infection caused by RSV in
children under 24 months of age with BPD or a history of prematurity.
Because of the seasonal nature of RSV, limited sales, if any, are expected
during the second and third quarters, causing results to vary significantly
from quarter to quarter.

RESULTS OF OPERATIONS
1997 Compared to 1996
Product sales increased 82% for the year ended December 31, 1997, over
the year ended December 31, 1996, due to increased demand for RespiGam in the
first half of the product's second full season of sales, as well as a 10%
increase in CytoGam sales. RespiGam sales were $45.0 million in 1997 versus
$17.3 million in 1996, a 159% increase,

reflecting an increase in vials sold. Supply constraints limited 1997 and
1996 sales. CytoGam product sales increased to $20.3 million from $18.4
million in 1996 due primarily to a 4% increase in units sold, and two price
increases that took effect in mid-1996 and mid-1997. In 1996 CytoGam product
sales were reduced by a $0.7 million reserve for trade receivables due from a
pharmaceutical wholesaler that filed Chapter 11 bankruptcy in August 1996;
$0.1 million was recovered against this loss in 1997 as a result of a sale of
the receivables to a third party. Although the Company markets directly to
hospitals and physicians, the Company sells its products through a limited
number of pharmaceutical wholesalers. A similar event with another wholesaler
could adversely affect operating income. The level of future product sales
will be dependent on several factors, including, but not limited to, the
timing and extent of future regulatory approvals of the Company's products
and product candidates, availability of finished product inventory, approval
and commercialization of competitive products and the degree of acceptance of
the Company's products in the marketplace. The Company submitted a Biologic
License Application to the FDA in December 1997 requesting marketing
clearance for its second generation RSV product, Synagis. Marketing
clearance has not yet been obtained and there can be no assurance that such
approval will be obtained. The Company believes that if Synagis were
licensed for marketing, it would significantly adversely affect sales of
RespiGam.
Other revenues increased to $15.7 million in 1997 from $5.3 million in
1996. Other revenues in 1997 reflect primarily fees paid by Abbott
Laboratories for the right to market and distribute the Company's second
generation RSV drug, Synagis, outside the U.S. The Company is also entitled
to receive an additional $30.0 million from Abbott upon receipt of a
marketing approval in the U.S. and other major markets. Sales of Synagis are
dependent upon marketing clearance from the FDA and other regulatory
authorities and there can be no assurance that such clearance will be
obtained. Other revenues in 1996 reflect the completion of milestone and
research funding payments under the Company's strategic alliance with AHP,
formerly American Cyanamid Company. Under the terms of the alliance, the
Company and AHP share in the profits or losses of RespiGam; reimbursements or
payments under this arrangement are deducted from or added to operating
expenses and

are included in selling, administrative and general expenses. Subsequent to
December 31, 1997, the Company received $15 million from SmithKline Beecham
pursuant to an agreement signed in December 1997 to develop and commercialize
human papillomavirus vaccines for prevention of cervical cancer and genital
warts. This payment will be included in 1998 other revenues along with
research funding that will be due the Company under the terms of the
alliance. The level of contract revenues in future periods will depend
primarily upon the extent to which the Company enters into other
collaborative contractual arrangements, if any.
Cost of sales increased 75% to $34.4 million in 1997 from $19.7 million
in 1996, due to a 68% increase in vials sold. Gross margins in 1997 improved
to 47% versus 45% in 1996, reflecting the increased sales of RespiGam in the
product mix, which has a lower royalty rate than CytoGam. 1997 margins were
adversely impacted by a charge for an estimate of additional royalties due to
Massachusetts Health Research Institute as part of a possible settlement of
an ongoing inquiry by the Inspector General of the Commonwealth of
Massachusetts. (See Note 13 of Notes to Financial Statements.) If settled
as presently contemplated, the increased royalty rate would continue to apply
to future sales of RespiGam. The Company's products are manufactured by
third parties and future per-unit cost of sales could increase if the Company
is unable to negotiate favorable pricing. The Company has substantially
completed construction of its own manufacturing facility intended for some
portion of the production of its two approved products as well as other
product candidates, including Synagis. This facility is subject to
inspection and approval by the FDA and any resulting sales of product from
this facility would not commence for at least the next 18 months. If Synagis
is licensed for marketing by the FDA, the Company may book a reserve against
RespiGam inventory. The magnitude of this reserve, if any, would be
determined by factors including, but not limited to, the timing of Synagis
approval, the extent of RespiGam inventory on hand at the time, the assessed
market potential of Synagis and the assessed market potential of RespiGam.
Additionally, if Synagis is licensed for marketing by the FDA, its margin may
differ significantly from those of the Company's existing products; however,
because Synagis has never been produced in

commercial quantities, the impact, if any, on margins is not known.
Research, development and clinical costs of $40.7 million were incurred
in 1997 compared to $32.2 million in 1996, an increase of 26%. Expenditures
in 1997 and 1996 include approximately $14.5 million and $10 million,
respectively, for the clinical studies performed for Synagis, including a
1,502-patient Phase 3 clinical trial that began in the fourth quarter of 1996
and was substantially completed by the end of the 1997 second quarter. 1997
expenses also include $1.3 million in license fees relating to Synagis and
MEDI-507, a monoclonal antibody that inhibits T cell responses. The level of
the Company's total research and development expenses in future periods will
fluctuate depending on the extent of clinical trial spending. The Company
expects clinical trial expenses to be significantly lower in 1998 than 1997.
Selling, administrative and general expenses increased to $31.7 million
in 1997 from $22.2 million in 1996. The increase in 1997 reflects primarily
AHP's share of RespiGam's profits, which resulted in a charge of $3.0 million
to selling expenses as calculated under the terms of the strategic alliance.
This compared to $4.3 million in reimbursement from AHP in 1996 for its share
of RespiGam product line loss, as calculated under the terms of the strategic
alliance. Other selling and marketing expenses increased by $1.7 million,
reflecting increased commission and product distribution costs resulting from
the increased product sales. This was offset by a $1.1 million decrease in
sales detailing costs to AHP as a result of the Company's decision to not use
AHP's sales force to detail RespiGam in the 1997/1998 RSV season. General
and administrative expenses increased by $0.6 million reflecting increased
headcount, legal and other costs. Selling, administrative and general
expenses are expected to increase in 1998 as the Company prepares for the
potential market launch of Synagis, if and when licensed by the FDA.
Expenses in 1997 include $11.5 million of other operating expenses,
which include the costs of start-up of the Frederick manufacturing facility
and scale-up of production of Synagis at the Gaithersburg pilot plant and at
a third-party manufacturer, Boehringer Ingelheim Pharma KG ("BI") in
Biberach, Germany. The Company expects

to incur significant start-up and scale-up costs throughout 1998 and into
1999.
Interest income decreased to $4.0 million in 1997 compared to $5.7
million in 1996. The decrease reflects lower cash balances available for
investment, partially offset by an increase in interest rates that increased
the overall portfolio yield.
Interest expense increased to $3.5 million in 1997 from $2.3 million in
1996, reflecting primarily interest on the convertible subordinated notes of
the Company issued in July 1996 (net of amounts capitalized) and interest on
equipment financing, primarily in the second half of 1997. Interest expense
in 1997 and 1996 is net of $2.2 and $0.3 million, respectively, of interest
capitalized against the manufacturing facility and the pilot plant expansion.
The 1997 net loss of $36.9 million, or $1.59 basic and diluted per
common share, compared to a 1996 net loss of $29.5 million, or $1.41 basic
and diluted per common share. Shares used in computing basic and diluted
loss per share were 23.1 million and 21.0 million, respectively, in 1997 and
1996. The Company does not believe that inflation had a material effect on
its financial statements.
These results were consistent with the Company's objectives for the year
and with the continued development of its immunotherapeutic and vaccine
products. The factors that affected 1997 results may continue to affect near-
term future financial results.

1996 Compared to 1995
The increase in product sales for the year ended December 31, 1996, as
compared to the year ended December 31, 1995, was due to the commencement of
sales of RespiGam in 1996 and a 14% increase in CytoGam sales. RespiGam
sales were $17.3 million in 1996, of which $13.9 million were generated in
the fourth quarter. CytoGam product sales increased to $18.4 million from
$16.2 million in 1995 due primarily to increased units sold. CytoGam product
sales were reduced by a $0.7 million reserve in the 1996 third quarter for
trade receivables due from a pharmaceutical wholesaler that filed Chapter 11
bankruptcy in August 1996.
Other revenue decreased to $5.3 million in 1996 from $11.3 million in
1995, reflecting the completion of milestone and research funding

payments under the Company's strategic alliance with AHP.
Cost of sales increased to $19.7 million in 1996 from $10.7 million in
1995, due to the initiation of sales of RespiGam in 1996. The gross margins
for 1996 of 45% improved over 1995's margins of 34%, reflecting the addition
of RespiGam as well as a reduction in the royalty rate due to Connaught for
CytoGam, effective for the fourth quarter of 1995.
Research, development and clinical spending was $32.2 million in 1996
compared to $26.4 million in 1995, reflecting increased expenditures of over
$10 million for Synagis clinical studies, including the start of a 1,502-
patient Phase 3 clinical trial in the fourth quarter of 1996. This increase
was offset by a decrease in clinical spending for RespiGam, for which two
Phase 3 trials were completed in mid-1995 and licensing was received from the
FDA in January 1996.
Selling, administrative and general expenses increased to $22.2 million
in 1996 from $11.7 million in 1995, reflecting primarily the launch of
RespiGam in 1996. Approximately 45 additional sales and marketing personnel
were hired between September 1995 and March 1996 to staff for the launch of
RespiGam, resulting in an increase of over $5 million in salaries,
commissions, recruiting, travel and related costs. An additional $5.2 million
was spent on marketing and selling programs for the launch of RespiGam in
1996. Sales detailing costs to the Company's corporate partner for RespiGam,
AHP, approximated $1.8 million in 1996 and none in 1995. Offsetting the
increased costs in 1996 was a $4.3 million reimbursement from AHP of its
share of product line loss on RespiGam for the year, calculated under the
terms of the strategic alliance. General and administrative expenses
increased by $0.7 million, reflecting increased headcount and legal and other
costs associated with the new manufacturing facility.
In December 1995, the Company and Connaught entered into an amendment to
the agreement signed in 1992 in which the Company reacquired the rights to
market CytoGam. In connection with this amendment, the Company made a lump
sum payment of $2.7 million to Connaught in the first half of 1996 upon
completion of certain modifications to Connaught's filling and packaging
facility. The $2.7 million charge was expensed as other operating expenses
in 1995.

Interest income increased to $5.7 million in 1996 compared to $1.7
million in 1995. The increase reflects the proceeds from the Company's
equity and convertible debt offerings in 1996, resulting in higher cash
balances available for investment, partially offset by a decrease in interest
rates, which lowered the overall portfolio yield.
Interest expense increased to $2.3 million in 1996 from $0.3 million in
1995, reflecting interest on the convertible subordinated notes of the
Company issued in July 1996. Interest expense in 1996 is net of $0.3 million
of interest capitalized against the new manufacturing facility and the pilot
plant expansion.
The 1996 net loss of $29.5 million, or $1.41 basic and diluted per
common share, compared to a 1995 net loss of $22.7 million, or $1.41 basic
and diluted per common share. Shares used in computing basic and diluted
loss per share were 21.0 million and 16.1 million, respectively, for 1996 and
1995.

LIQUIDITY AND CAPITAL RESOURCES
Cash and marketable securities were $50.3 million at 1997 year end
compared to $114.8 million at 1996 year end. Working capital was $56.6
million at 1997 year end versus $113.3 million at 1996 year end.
Net cash used in 1997 operating activities was $47.745.5 million
compared to $25.85 million used in 1996 and $15.9 million used in 1995. The
cash outflow from operations in 1997 reflected the net loss of $36.9 million
adjusted for depreciation and amortization and working capital changes.
Working capital changes included: 1) a $25.2 million increase in inventory
reflecting build-up of CytoGam and RespiGam to support increased sales; 2) a
$6.5 million increase in trade receivables as a result of the increased
fourth quarter sales, primarily RespiGam; and 3) a $17.4 million increase in
accounts payable and accrued expenses reflecting primarily accruals for
plasma inventories, contract manufacturing activities, amounts due to AHP for
its share of RespiGam product line profit and increased sales

commission accruals. Most of the working capital increase in 1997
resulted from growth in accounts receivable, reflecting a 117% increase in
product sales in the fourth quarter 1997 versus the fourth quarter 1996 and
growth in inventory in anticipation of increased first quarter 1998 sales
compared to first quarter 1997. Inventory growth was also impacted by an
increase in plasma collections in 1997 as more plasmapheresis centers were
added to increase the volume of collections. If Synagis is licensed for
marketing by the FDA, the Company may book a reserve against RespiGam
inventory for obsolescence as Synagis is expected to substantially replace
RespiGam in the market. The amount and timing of such a reserve, if any,
would depend on factors including, but not limited to, the anticipated timing
of Synagis marketing clearance, the extent of RespiGam inventory on hand at
that time, the assessed market potential of Synagis and the assessed market
potential of RespiGam.
AAdditionally, inventory is expected to increase significantly in 1998 as the
Company purchases Synagis inventory from BI and collects materials for use in
its new manufacturing facility to begin producing inventory for the potential
launch of Synagis.
The cash outflow from operations in 1996 reflected the net loss adjusted
for depreciation and amortization and working capital changes. Working
capital changes included: 1) a $7.1 million increase in trade and contract
receivables due to significant fourth quarter 1996 sales of RespiGam; 2) a
$5.6 million increase in accounts payable and accrued expenses, reflecting
accrued costs associated with the Synagis Phase 3 clinical trial, accrued
manufacturing costs for production of the Company's two products, and accrued
marketing and selling costs, including commissions; and 3) a $2.1 million
increase in accrued interest reflecting interest due on the convertible
subordinated notes, paid January 1997.
Cash flows from financing activities were $20.9 million in 1997

compared to $125.4 million in 1996. In 1997, the Company drew down $14.4
million of $15.0 million of available equipment financing. In addition, the
Company received the remaining $2.8 million of financing available from the
state and local government to fund the construction of the manufacturing
plant. In February 1996, the Company completed a public offering of 3.45
million shares of common stock resulting in net proceeds of $58 million and
in July 1996, the Company completed a private placement of $60 million
aggregate principal amount of 7% convertible subordinated notes due 2003 for
net proceeds of $58 million. Additionally in 1996, the Company received $9
million of proceeds from state and local government loans in connection with
the financing of its manufacturing facility.
Capital expenditures in 1997 were $36.738.9 million compared to $22.47
million in 1996 excluding capitalized interest of $2.2 million and $0.3
million, respectively. The 1997 expenditures include $33.237.5 million (net
of capitalized interest) for the construction, equipment and validation of
the Company's manufacturing facility and the completion of its pilot plant
expansion at the Gaithersburg headquarters. Additional expenditures were for
laboratory and office equipment. The 1996 expenditures included $16.95
million (net of capitalized interest) for the design and construction of the
Company's manufacturing facility and the expansion of the pilot plant.
Additional expenditures were for land, laboratory equipment and
administrative expansion.
Capital expenditures in 1998 are expected to approximate $7.0 million,
due mostly to expansion of the administrative area at the Gaithersburg
headquarters and the Frederick manufacturing facility to provide additional
capacity for the Company's cell culture product candidates. Construction of
the manufacturing facility is substantially completed and initial process
qualification will commence during 1998. There can be no assurance that
appropriate regulatory approvals will be obtained to enable the use of the
facility for production of the Company's products or product candidates. Any
resulting sales of product from this facility would not commence for at least
the next 18 months, subject to regulatory approvals. Further production
capacity may be required to support future sales of MedImmune's product
candidates. The Company is evaluating its

alternatives, including, but not limited to, significant expansion of
its existing facilities. At this time, the Company is unable to determine
the potential cost or likelihood of this project.
Subsequent to December 31, 1997, the Company received $15 million from
SmithKline Beecham ("SB") pursuant to an agreement signed with them in
December 1997 to develop and commercialize human papillomavirus vaccines for
prevention of cervical cancer and genital warts. This payment will be
included in 1998 other revenues along with research funding of approximately
$5 million that will be due the Company under the terms of the alliance. In
addition, in January 1998, the Company completed the sale of 83,410 shares of
common stock to SB for net proceeds to the Company of $5.0 million. Also Iin
January 1998, the Company completed a private placement of 1.7 million shares
of common stock to three institutional investors for net proceeds to the
Company of $66.3 million.
The Company is obligated in 1998 to provide $2.5 million in
funding for various clinical trials, research and development and license
agreements with certain institutions. The Company's existing funds, together
with funds contemplated to be generated from product sales and investment
income, are expected to provide sufficient liquidity to meet the anticipated
needs of the business for at least the next 18 months, absent the occurrence
of any unforeseen events.

Year 2000 Compliance
The Company has conducted a review of its internal and external systems for
year 2000 compliance and believes that the cost of completing any necessary
modifications will not be material. There can be no assurances: 1)that the
Company will be able to identify all aspects of its business that are subject
to Year 2000 problems, including issues of its customers or suppliers, 2)that
the Company's software vendors are correct in their assertions that the
software is Year 2000 compliant, 3)that the Company's estimate of the cost of
systems preparation for Year 2000 compliance will prove ultimately to be
accurate.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

BALANCE SHEETS
(in thousands, except share data)
December 31, December 31,
1997 1996
---------- ----------

ASSETS
Cash and cash equivalents $29,984 $12,629
Marketable securities 20,342 102,136
Trade receivables, net 15,236 8,123
Contract receivables, net 3,064 2,164
Inventory, net 28,857 6,060
Other current assets 2,740 1,713
---------- ----------
Total Current Assets 100,223 132,825
Property and equipment, net 65,254 29,087
Other assets 4,859 2,059
---------- ----------
Total Assets $170,336 $163,971
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable, trade $4,535 $3,942
Accrued expenses 27,682 10,509
Accrued interest 2,583 2,057
Product royalties payable 6,227 2,559
Other liabilities 2,633 469
---------- ----------
Total Current Liabilities 43,660 19,536
Long term debt 85,363 70,874
Other liabilities 777 696
---------- ----------
Total Liabilities 129,800 91,106
---------- ----------
Commitments and Contingencies

SHAREHOLDERS' EQUITY
Preferred stock, $.01 par value; -- --
authorized 5,524,525 shares;
none issued or outstanding
Common stock, $.01 par value; 244 218
authorized 60,000,000 shares;
issued and outstanding 24,444,745

shares and 21,836,763 shares at
December 31, 1997 and 1996,
respectively
Paid-in capital 176,564 172,024
Accumulated deficit (136,272) (99,377)
---------- ----------
Total Shareholders' Equity 40,536 72,865
---------- ----------
Total Liabilities and $170,336 $163,971
Shareholders' Equity ========== ==========

The accompanying notes are an integral part of these financial statements.

Statements of Operations
(in thousands, except per share data)

For the year ended December 31,
---------------------------------
1997 1996 1995
-------- -------- --------

REVENUES
Product sales $65,271 $35,782 $16,173
Other 15,693 5,317 11,263
-------- -------- --------
Total Revenues 80,964 41,099 27,436
-------- -------- --------
COSTS AND EXPENSES
Cost of sales 34,433 19,678 10,678
Research and development 40,669 32,192 26,417
Selling, administrative 31,735 22,165 11,719
and general
Other operating expenses 11,543 -- 2,700
-------- -------- --------
Total Expenses 118,380 74,035 51,514
-------- -------- --------
Operating Loss (37,416) (32,936) (24,078)
Interest income 4,004 5,655 1,657
Interest expense (3,483) (2,263) (250)
-------- -------- --------
Net Loss $(36,895) $(29,544) $(22,671)
======== ======== ========
Net Loss Per Share, Basic and
Diluted $(1.59) $(1.41) $(1.41)
======== ======== ========
Shares Used in Calculation of Basic
and Diluted Net Loss Per Share 23,132 21,019 16,061
======== ======== ========
The accompanying notes are an integral part of these financial
statements.

Statements of Cash Flows
(in thousands) For the year ended December 31,
--------------------------------
1997 1996 1995
-------- -------- ---------

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(36,895) $(29,544) $(22,671)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 2,749 1,843 1,554
Capitalized interest (2,188) (273) --
Amortization of premium (discount) on
marketable securities 937 447 (418)
Bad debt expense (641) 724 5
Inventory reserve (8) (409) 417
Amortization of debt issue costs 330 155 --
Other 325 96 119
Increase(decrease) in cash due to
changes in assets and liabilities:
Trade receivables (6,472) (6,160) (987)
Contract receivables (1,144) (954) 2,865
Inventory (25,235) 376 (945)
Other assets (990) (641) 1,111
Accounts payable and accrued expenses 17,351 5,595 2,154
Product royalties payable 3,668 783 818
Accrued interest 526 2,057 --
Other liabilities (4) 119 35
-------- -------- --------
Net cash used in operating (47,691) (25,786) (15,943)
activities
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Investments in securities available -- (131,908) (38,587)
for sale
Maturities of securities available 80,857 53,199 31,308
for sale
Capital expenditures (36,728) (22,402) (1,116)
-------- -------- --------
Net cash provided by (used in) 44,129 (101,111) (8,395)
investing activities
-------- -------- --------

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issuance of common 4,566 58,630 32,256
stock
Proceeds from issuance of long 17,187 69,000 --
term debt
Deferred costs from debt (306) (2,172) --
issuance
Decrease in long term debt obligations (530) (97) (103)
--------- -------- --------
Net cash provided by 20,917 125,361 32,153
financing activities
--------- -------- --------
Net increase (decrease) in cash and cash 17,355 (1,536) 7,815
equivalents
Cash and cash equivalents at beginning 12,629 14,165 6,350
of year
-------- -------- --------
Cash and cash equivalents at end of
year $29,984 $12,629 $14,165
========= ======== ========
The accompanying notes are an integral part of these financial statements.

Statements of Shareholders' Equity
(in thousands, except share data)

Common Stock,
$.01 par
--------------- Paid-in Accumulated
Shares Amount Capital Deficit Total
--------- ------ ------- --------- -------

Balance,
December 31, 1994 14,618,042 $146 $81,210 $(47,162) $34,194

Common stock options
exercised 43,817 -- 92 -- 92
Private placement of
common stock, May
1995,at $6.85 per
share, net of under-
writing commissions
and expenses of $825 1,250,000 13 7,728 -- 7,741
Private placement of
common stock, June
1995,at $11.49 per
share, net of fees and
expenses of $40 826,536 8 9,452 -- 9,460
Private placement of
common stock, October
1995, at $15.50 per
share, net of fees and
expenses of $37 967,742 10 14,953 -- 14,963
Net loss -- -- -- (22,671) (22,671)
-------- ------ -------- -------- -------
Balance,
December 31, 1995 17,706,137 177 113,435 (69,833) 43,779

Common stock options
exercised 288,484 3 700 -- 703
Sale of common stock,
February 1996, public
offering at $18.00 per
share, net of under-
writing commissions
and expenses of $4,173 3,450,000 34 57,893 -- 57,927
Conversion of Series A

Convertible Preferred
Stock 392,142 4 (4) -- --
Net loss -- -- -- (29,544) (29,544)
-------- ----- -------- -------- --------
Balance,
December 31, 1996 21,836,763 218 172,024 (99,377) 72,865

Common stock options
exercised 614,629 6 4,560 -- 4,566
Conversion of Series A
Convertible Preferred
Stock 1,993,353 20 (20) -- --
Net Loss -- -- -- (36,895) (36,895)
---------- ----- -------- --------- --------
Balance,
December 31, 1997 24,444,745 $244 $176,564 $(136,272) $40,536
========== ===== ======== ========== ========
The accompanying notes are an integral part of these financial statements.

NOTES TO FINANCIAL STATEMENTS
(in thousands, except share and per share data)

1. ORGANIZATION
MedImmune, Inc. (the Company), a Delaware corporation, is a
biotechnology company focused on the development and marketing of products
for the prevention and treatment of infectious diseases and for use in
transplantation medicine. The Company was originally incorporated on June
29, 1987, and commenced operations on April 22, 1988.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Significant accounting policies applied in the preparation of these
financial statements are as follows:
Cash and Cash Equivalents
The Company considers all highly liquid instruments purchased with an
original maturity of three months or less to be cash equivalents.
Marketable Securities
Marketable securities include investments with original maturities of
greater than three months having a remaining maturity of less than 24 months.
The Company's securities are held for an unspecified period of time and may
be sold to meet liquidity needs. The securities included as marketable
securities are considered available-for-sale as defined by Statement of
Financial Accounting Standards ("SFAS") No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." Amortized cost of marketable
securities approximates market; therefore, no adjustment has been made to
shareholders' equity as a result of changes in market value to these
securities. Interest income is accrued as earned.
Concentration of Credit Risk
The Company has invested its excess cash generally in securities

of the U.S. Treasury, U.S. government agencies, corporate debt securities,
commercial paper and money market funds with strong credit ratings and
deposits with a major bank. The Company has not experienced any significant
losses on its investments. The Company sells its products primarily to a
limited number of pharmaceutical wholesalers without requiring collateral.
The Company periodically assesses the financial strength of these wholesalers
and establishes allowances for anticipated losses when necessary.
Inventory
Inventory is stated at the lower of cost or market. Cost is determined
using a weighted-average approach that approximates the first-in, first-out
method. Where the Company has a firm contract for their puchase, by-products
that result from production of the Company's principal products are accounted
for as a reduction of the cost of the principal products.
Product Sales
Product sales are recognized upon shipment of the product to
wholesalers. Product sales are recorded net of reserves for estimated
chargebacks, returns, discounts, and Medicaid rebates. The Company maintains
reserves at a level that management believes is sufficient to cover estimated
future requirements. Allowances for discounts, returns, bad debts,
chargebacks and Medicaid rebates, which are netted against accounts
receivable, totaled $3,037 and $2,053 at December 31, 1997 and 1996,
respectively. Product royalty expense is recognized concurrently with the
recognition of product revenue. Royalty expense, included in cost of sales,
was $8,504, $4,282 and $3,056 for the years ended December 31, 1997, 1996 and
1995, respectively.
Contract Revenues
Contract revenues are recognized over the fixed term of the contract or,
where appropriate, as the related expenses are incurred. Non-refundable fees
or milestone payments in connection with research

and development or commercialization agreements are recognized when they are
earned in accordance with the applicable performance requirements and
contractual terms. Payments received that are related to future performance
are deferred and recorded as revenues as they are earned over specified
future performance periods.
Property and Equipment
Property and equipment are stated at cost. Interest cost incurred
during the period of construction of plant and equipment is capitalized.
Depreciation of laboratory and computer equipment is computed on the straight-
line method based upon estimated useful lives ranging from 3 to 7 years.
Amortization of leasehold improvements is computed on the straight-line
method based on the shorter of the estimated useful life of the improvement
or the term of the lease. Upon the disposition of assets, the costs and
related accumulated depreciation are removed from the accounts and any
resulting gain or loss is included in the statements of operations. Repairs
and maintenance costs are expensed as incurred and were $1,002, $537 and $540
for the years ended December 31, 1997, 1996 and 1995, respectively.

Long-Lived Assets
The Company evaluates the recoverability of the carrying value of
property and equipment and intangible assets in accordance with the
provisions of SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets to be Disposed Of." The Company considers historical performance and
anticipated future results in its evaluation of the potential impairment.
Accordingly, when the indicators of impairment are present, the Company
evaluates the carrying value of these assets in relation to the operating
performance of the business and future and undiscounted cash flows expected
to result from the use of these assets. Impairment losses are recognized
when the sum of the expected future cash flows are less than the assets'
carrying value.

Forward Exchange Contracts
The Company is obligated to make certain payments to a foreign supplier
in its local currency. To hedge the effect of fluctuating foreign currencies
in its financial statements, the Company may enter into foreign forward
exchange contracts. Gains or losses associated with the forward contracts
are computed as the difference between the foreign currency contract amount
at the spot rate on the balance sheet date and the forward rate on the
contract date. Unrealized gains or losses are deferred until the obligation
date and are then offset against the gains or losses on the foreign currency
transaction. See Note 12 for information regarding the fair value of the
Company's foreign forward exchange contracts.
Fair Value of Financial Instruments
The carrying amount of financial instruments including cash and cash
equivalents, trade accounts and contracts receivable, other current assets,
accounts payable, and accrued expenses approximate fair value as of December
31, 1997 and 1996 due to the short maturities of these instruments. See Note
7 for information regarding the fair value of the Company's long-term debt
and notes payable and Note 12 for information regarding the fair value of the
Company's foreign forward exchange contracts.
Income Taxes
Deferred income taxes are recognized for the tax consequences in future
years of differences between the tax bases of assets and liabilities and
their financial reporting amounts at each year end based on enacted tax laws
and statutory tax rates applicable to the periods in which the differences
are expected to affect taxable income. Valuation allowances are established
when necessary to reduce deferred tax assets to the amount expected to be
realized. Income tax expense is the tax payable for the period and the
change during the period in deferred tax assets and liabilities.

Earnings (Loss) Per Common Share
In 1997, the Company adopted SFAS No. 128, Earnings per Share. Basic
earnings per share is computed by dividing the net loss available to common
shareholders by the weighted average number of common shares outstanding
during the period. Diluted earnings per share is computed by dividing net
earnings available to common shareholders by the weighted average number of
common shares outstanding after giving effect to all dilutive potential
common shares that were outstanding during the period. Potential common
shares are not included in the computation of diluted earnings per share if
they are antidilutive. Net loss per share as reported was not adjusted for
potential common shares as they are antidilutive. Net loss available to
common shareholders as reported was not adjusted. Earnings per share for all
other periods presented conform to SFAS No. 128.
New Accounting Standards
The Financial Accounting Standards Board has issued two new standards
which become effective for reporting periods beginning after December 15,
1997. SFAS No. 130, Reporting Comprehensive Income, requires additional
reporting with respect to certain changes in assets and liabilities that
previously were included in shareholders' equity. The Company will begin
complying with the reporting required by SFAS No. 130 in the first quarter of
1998. SFAS No. 131, Disclosures about Segments of an Enterprise and Related
Information, requires financial and descriptive information with respect to
"operating segments" of an entity based on the way management disaggregates
the entity for making internal operating decisions. The Company will begin
making the disclosures required by SFAS No. 131 with financial statements for
the period ending December 31, 1998.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make

estimates and assumptions that affect the reported amounts of assets and
liabilities, and disclosure of contingent assets and liabilities at the
financial statement date and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.

3. INVENTORY
Inventory at December 31, is comprised of the following:
1997 1996
------ ------
Raw materials $14,503 $2,073
Work in process 12,990 2,758
Finished goods 3,810 1,229
------ ------
31,303 6,060
Less non-current (2,446) --
------ ------
$28,857 $6,060
========= =====

At December 31, 1997, raw materials for one of the Company's existing
products being collected for production at the Company's manufacturing plant
which has not been licensed by the FDA, are classified as non-current as they
are not expected to be consumed within the next year. In addition, finished
goods at December 31, 1997 include by-products that result from the
production of the Company's principal products at one of its contract
manufacturers and are held for resale. As of December 31, 1997To date, no
sales of these by-products have occurred.

The Company submitted a Biologic License Application to the FDA in
December 1997 requesting marketing clearance for its second generation RSV
product, Synagis. The Company believes that if Synagis were licensed for
marketing, it would largely replace sales of RespiGam. Consequently, if and
when Synagis is cleared for marketing, the Company may be compelled to record
a reserve against RespiGam inventory. The magnitude of this inventory
reserve, if any, would be determined by a number of factors, including but
not limited to, the anticipated timing of Synagis marketing clearance, the
extent of RespiGam inventory on hand at the time, the assessed market
potential of Synagis and the assessed market potential of RespiGam.

4. PROPERTY AND EQUIPMENT
Property and equipment, stated at cost at December 31, is comprised of
the following:

1997 1996
----- -----
Land $ 1,521 $ 1,521
Leasehold improvements 11,042 6,860
Laboratory equipment 9,355 7,427
Office furniture, computers and equipment 4,377 3,235
Construction in progress 49,040 17,376
------- -------
75,335 36,419
Less accumulated depreciation and
amortization (10,081) (7,332)
------- -------
$65,254 $29,087

======= =======

Construction in progress consists primarily of costs incurred in connection
with the design and construction of the Company's manufacturing facility and
includes capitalized interest costs of $2,423 and $273300 at December 31,
1997 and 1996, respectively.

5. ACCRUED EXPENSES
Accrued expenses at December 31, is comprised of the following:
1997 1996
------- -------
Accrued contracts $14,959 $5,737
Accrued manufacturing 8,792 1,804
Accrued sales and marketing 2,299 2,085
Accrued other 1,632 883
------- -------
$27,682 $10,509
======= =======

65. FACILITIES LEASES
The Company entered into a 15-year lease beginning in November 1991, as
amended in 1993, 1996 and 1997, for administrative and laboratory facilities
in Gaithersburg, Maryland. Under the lease, the Company is obligated to pay
a basic monthly rent which will increase 3% each lease year and in 1997
totaled $1,010. The lease also requires the Company to pay for utilities and
its proportionate share of taxes, assessments, insurance and maintenance
costs. Rent expense for the years ended December 31, 1997, 1996 and 1995 was
$1,328, $1,113 and $946, respectively. The 1995 expense is net of sublease
rental receipts of approximately $140 from an affiliated company. The
sublease agreement was terminated in October 1995.
The Company's future minimum lease payments under the facility

operating lease are as follows:

Year ending December 31,
------------------------
1998 $ 1,158
1999 1,192
2000 1,228
2001 1,265
2002 1,304
thereafter 5,504
--------
$ 11,651
========

76. LONG TERM DEBT
Long term debt at December 31, is comprised of the following:

1997 1996
----- -----
7% convertible subordinated notes, due
2003 $60,000 $60,000

Notes payable to Transamerica Business
Credit Corporation due through 2004,
interest 10.13%-10.6% 13,975 --

7.53% note due to Maryland Industrial
Development Finance Authority, due 2007 5,000 5,000

4% notes due to Maryland Department of
Business and Economic Development, due
2016 6,800 4,000

Notes payable to landlord, due through
2006, interest 11.5%-13% 1,874 1,992
------- -------
87,649 70,992
Less current portion included in other
current liabilities (2,286) (118)
------- -------
$85,363 $70,874
======= =======

The convertible subordinated notes were issued in July 1996 and are
convertible at the option of the holder into 3,048,780 shares of the
Company's common stock at a conversion price of $19.68 per share, subject to
adjustments in certain events. The notes are not redeemable by the Company
prior to July 7, 1999. After that date, the notes are redeemable with 30
days notice at a declining premium until the due date, plus accrued interest.
The notes are subordinated to all senior debts of the Company including the
state and local loans, the Transamerica loans, and the loan from the
landlord. The Company may be required to redeem the notes at amounts up to
107% of the principal amount in the event of a change in control of the
Company.
Principal and interest payments on the state and local notes begin in
1998. Pursuant to the terms of the agreements, the Company is required to
meet certain financial and non-financial covenants including maintaining
minimum cash balances and net worth ratios. The Company maintains a $400
compensating balance related to the notes which is included in the
accompanying balance sheets as of December 31, 1997 and 1996. The notes are
collateralized by the land, buildings and building fixtures of the
manufacturing facility. The agreements include a provision for early
retirement of the notes by the Company.
Loans from Transamerica Business Credit Corporation issued in 1997 are
repayable over 6 years at rates ranging from 10.13% to 10.6%. The

loans are collateralized by manufacturing, laboratory, and office equipment
of the Company. The Company may borrow up to an additional $0.6 million
under this facility. The agreements include a provision for early retirement
of the loans by the Company.
Maturities of long term debt for the next five years are as follows:
1998, $2,286; 1999, $2,625; 2000, $2,878; 2001, $3,164; and 2002, $3,476.
Interest paid was $4,817, $304 and $250, for the years ended December 31,
1997, 1996 and 1995, respectively.
The fair value of the Company's long term debt at December 31, 1997,
based on quoted market prices or discounted cash flows based on currently
available borrowing rates, was $153,253 compared to its carrying value of
$87,649.

87. SHAREHOLDERS' EQUITY
In August 1996, the shareholders of the Company approved an increase in
the authorized number of shares of common stock from 30 million shares to 60
million shares.
In connection with the closing of the Company's initial public offering
in 1991, the holders of the Series A Convertible Preferred Stock warrants
agreed that if such warrants were exercised, the holders thereof would
simultaneously exercise their right to convert the Series A Convertible
Preferred Stock received upon exercise of the warrants into 2,524,525 shares
of common stock. Pursuant to an amendment to the warrant agreement in which
the holders could elect a cashless exercise of the warrants for a reduced
number of common shares based on a calculation of the fair market value of
the common stock on the exercise date, 2,108,652 and 415,873 of the Series A
Convertible Preferred Stock warrants were exercised and converted through a
cashless exercise into 1,993,353 and 392,142 shares of common stock in 1997
and 1996, respectively. As of December 31, 1997, all warrants were exercised
and converted.

In July 1997, the Company's Board of Directors adopted a Stockholder
Rights Plan. Pursuant to the terms of the Plan, common stock purchase Rights
were distributed as a dividend at the rate of one Right for each share of
common stock of the Company held by stockholders of record as of the close of
business on July 21, 1997. The Rights will be exercisable only if a person
or group acquires beneficial ownership of 20 percent or more of the Company's
common stock or commences a tender or exchange offer upon consummation of
which such a person or group would beneficially own 20 percent or more of the
Company's stock. The Rights will expire on July 9, 2007.
In January 1998, the Company closed the private placement of 1.7
million1,700,000 new shares of common stock to institutional investors for
net proceeds of $66.3 million., and sold 83,410 shares of common stock to
SmithKline Beecham for net proceeds of $5.0 million.

98. COMMON STOCK OPTIONS
In April 1991, the Board of Directors adopted the 1991 Plan,
amended in March 1992, March 1995 and February 1997, under which 5,500,000
shares of common stock were reserved for issuance upon exercise of options
granted to employees, consultants and advisors of the Company. In May 1993,
a Non-Employee Directors Stock Option Plan was approved by the shareholders
under which 250,000 shares of common stock were reserved for issuance upon
exercise of options granted to non-employee directors. The 1991 Plan
provides for the grant of incentive and nonqualified stock options and the
Non-Employee Directors Plan provides for the grant of nonqualified stock
options. The maximum term of each option granted is 10 years. The option
prices under the 1991 Plan and the Non-Employee Directors Plan are equal to
the closing market price on the day prior to the date of grant.
Prior to the establishment of these plans, the Board of Directors

granted options and periodically set option prices. The Board of
Directors established option prices, prior to the Company's initial public
offering on May 8, 1991, based upon an evaluation of the fair market value of
the Company's stock. Options normally vest on the anniversary date of the
grant over a three to five year period. The Company has reserved a total of
5,623,101 shares of common stock for issuance under these plans as of
December 31, 1997. Related stock option activity is as follows:

Options Granted
Prior to
Establishment of Non-Employee
the 1991 Plan 1991 Plan Directors Plan
------------------ ------------------ -----------------

Wtd. Wtd. Wtd.
Avg. Avg. Avg.
Exercise Exercise Exercise
Price Price Price
Shares Per Per Per
Share Shares Share Shares Share
Balance,
Dec 31, 1994 822,165 1,453,982 40,000
Granted - $ - 1,175,600 $8.13 30,000 $12.58
Exercised (31,800) 6.90 (11,017) 7.60 - -
Cancelled (200) .80 (325,819) 11.46 - -
-------- --------- -------
Balance,
Dec 31, 1995 790,165 3.10 2,292,746 11.26 70,000 10.75
Granted - - 814,400 17.02 15,000 17.00
Exercised (232,804) .64 (55,680) 9.96 - -
Cancelled (2,000) 51.00 (109,407) 13.07 - -
-------- --------- -------
Balance,
Dec 31,1996 555,361 3.96 2,942,059 12.81 85,000 11.85
Granted - - 796,650 17.86 20,000 18.63
Exercised (167,359) 2.92 (434,770) 8.96 (12,500) 14.53
Cancelled - - (110,103) 16.76 - -
-------- -------- -------

Balance,
Dec 31, 1997 388,002 $4.40 3,193,836 $14.41 92,500 $12.96
======== ========= ======

Additional information related to the plans as of December 31, 1997
is as follows:

Options Outstanding Options Exercisable
---------------------- --------------------

Wtd Avg
Range of remaining Wtd Avg Wtd Avg
exercise Options contractual Exercise Options Exercise
prices outstanding life (yrs) Price Exercisable Price

$0.01- $7.00 731,286 7.7 $4.49 467,527 $3.29
$7.01-$13.50 1,060,918 6.8 $11.04 698,230 $11.04
$13.51-$20.00 1,616,218 8.3 $15.67 360,140 $15.35
$20.01-$43.75 265,916 7.0 $32.42 127,217 $33.82
----------- ---------
$0.01-$43.75 3,674,338 7.7 $13.32 1,653,114 $11.54

There were 1,803,763 and 145,000 shares available for future option grants
at December 31, 1997 under the 1991 Plan and the Non-Employee Directors Plan,
respectively.
The Company has adopted the disclosure-only provisions of SFAS No. 123 as
they pertain to financial statement recognition of compensation expense
attributable to option grants. As such, no compensation cost has been
recognized for the Company's option plans. If the Company had elected to
recognize compensation cost for the 1991 Plan and the Non-Employee Directors
Plan consistent with SFAS No. 123, the Company's net loss and basic and
diluted loss per share on a pro forma basis would be:

1997 1996 1995
----- ----- -----
Net loss - as reported $36,895 $29,544 $22,671
Net loss - pro forma $45,208 $36,556 $25,192
Basic and diluted loss per share - as $1.59 $1.41 $1.41
reported
Basic and diluted loss per share - pro $1.95 $1.74 $1.57
forma

The pro forma expense related to the stock options is recognized over the
vesting period, generally five years. The fair value of each option grant
was estimated using the Black-Scholes option pricing model with the following
weighted average assumptions for each year:

1997 1996 1995
----- ----- -----
Risk-free interest rate 6.21% 6.09% 6.76%
Expected life of options - years 7 7 7
Expected stock price volatility 75% 75% 75%
Expected dividend yield N/A N/A N/A

The weighted average fair value of options granted during 1997, 1996 and
19965 was $12.94and , $12.63 and $6.02, respectively.

10. COLLABORATIVE ARRANGEMENTS
American Home Products
On November 8, 1993, the Company signed definitive agreements with
American Cyanamid Company to form an alliance in the United States for the
development and marketing of three generations of products to prevent and
treat respiratory syncytial virus (RSV) and for the

marketing of a new anti-infective product, ZOSYN, developed by American
Cyanamid. The parties agreed to co-promote and share profits or losses on
the Company's RSV product, RespiGam, which was licensed for marketing by the
United States Food and Drug Administration on January 18, 1996. In 1994, AHP
acquired American Cyanamid and in October 1995, AHP invested $15 million in
the Company through the purchase of 967,742 shares of common stock. In
connection with this investment, the Company and AHP agreed to amend certain
terms of agreements entered into concurrently with the formation of their
1993 alliance. Pursuant to these amendments, AHP's funding obligations and
co-promotion rights with respect to the second generation RSV monoclonal
product developed by the Company were terminated, the Company returned its
right to co-promote ZOSYN to AHP and AHP received a right to receive a
royalty on any sales of the RSV monoclonal product. In addition, the
Company's right to co-fund and to co-promote an RSV vaccine being developed
by AHP was converted into the right to receive royalties on any sales of the
vaccine. Revenue of $4,791 and $10,744 in 1996 and 1995, respectively,
associated with these agreements is included as other revenue in the
accompanying statements of operations. Additionally, $2,967 of expense and
$4,299 of reimbursement for co-promotion activity have been added to and
netted against selling, general and administrative expense for the years
ended December 31, 1997 and 1996, respectively.
Abbott Laboratories
In December 1997, the Company signed two agreements with Abbott
Laboratories ("Abbott"). The first agreement calls for Abbott to co-promote
Synagis in the U.S., if and when cleared for marketing by the FDA. The second
agreement allows Abbott to exclusively distribute Synagis outside the U.S.,
if and when cleared for marketing by the appropriate regulatory authorities.
Under the terms of the U.S. co-

promotion agreement, Abbott will receive a percentage of net U.S. sales
based on defined annual sales thresholds. Each company is responsible for
its own selling expenses. Under the terms of the distribution agreement, the
Company will manufacture and sell Synagis to Abbott at a price based on end
user sales. The Company received a $15 million milestone payment as part of
this agreement in 1997, which is included in other revenue. The Company
could receive up to an additional $45 million based on the achievement of
certain milestones, including U.S. and European marketing clearance of
Synagis.
BioTransplant Incorporated
In October 1995, the Company and BioTransplant, Incorporated ("BTI")
formed a strategic alliance for the development of products to treat and
prevent organ transplant rejection. The alliance is based upon the
development of products derived from BTI's anti-CD2 antibody BTI-322, the
Company's anti-T cell receptor antibody MEDI-500 and future generations of
products derived from these two molecules, including, but not limited to,
MEDI-507. Pursuant to the alliance, the Company received an exclusive
worldwide license to develop and commercialize BTI-322 and any products based
on BTI-322, with the exception of the use of BTI-322 in kits for
xenotransplantation or allotransplantation. The Company has paid BTI $4.5
million in license fees and research support through December 31, 1997. The
Company has assumed responsibility for clinical testing and commercialization
of any resulting products. BTI may receive additional research support and
milestone payments that could total up to an additional $11.0 million, as
well as royalties on any sales of BTI-322, MEDI-500, MEDI-507 and future
generations of these products, if any.
Connaught Agreement
In December 1995, the Company and Connaught amended the agreement

originally signed in 1992 under which the Company reacquired the rights
to market CytoGam. The amendment provides for a reduction in the royalty
rate to be paid by the Company on sales of CytoGam after September 30, 1995,
and an agreement pursuant to which Connaught will fill and package the
Company's immune globulin products through 1998. In connection with this
amendment, the Company made a lump sum payment of $2.7 million in 1996 to
Connaught upon completion of certain modifications to Connaught's filling and
packaging facility. The $2.7 million charge is included as other operating
expense in the accompanying statements of operations for the year ended
December 31, 1995.
SmithKline Beecham
In December 1997, the Company and SmithKline Beecham ("SB") entered into
a strategic alliance to develop and commercialize human papillomavirus (HPV)
vaccines for prevention of cervical cancer and genital warts. In exchange
for exclusive worldwide rights to the Company's HPV technology, SB has agreed
to provide the Company with an up-front payment, future funding and potential
developmental and sales milestones which together could total over $85
million, as well as royalties on any product sales. Under the terms of the
agreement, the companies will collaborate on research and development
activities. MedImmune will conduct Phase 1 and Phase 2 clinical trials and
manufacture clinical material for those studies. SB is responsible for the
final development of the product, as well as regulatory, manufacturing, and
marketing activities. In January 1998, the Company received a $15 million
payment from SB and completed the sale of 83,410 shares of common stock to SB
resulting in net proceeds to the Company of $5.0 million.
Other Agreements

The Company has entered into research, development and license
agreements with various federal and academic laboratories and other
institutions to further develop its products and technology and to perform
clinical trials. Under these agreements, the Company is obligated to provide
funding of approximately $2.5 million and $0.8 million in 1998 and
1999, respectively. The Company has also agreed to make milestone payments
in the aggregate amount of $11.5 million on the occurrence of certain
events such as the granting by the FDA of a license for product marketing in
the U.S. for some of the product candidates covered by these agreements. In
exchange for the licensing rights for commercial development of proprietary
technology, the Company has agreed to pay royalties on sales using such
licensed technologies.

1110. INCOME TAXES
The tax effects of the temporary differences giving rise to the
Company's deferred tax assets at December 31, are as follows:

1997 1996
------ -----
Net operating loss carryforwards $ 46,820 $ 35,562
Other 8,426 4,377
------- ------
55,246 39,939
Valuation allowance (55,246) (39,939)
------- ------
Net deferred taxes $ -- $ --
======== ========

Realization of net deferred tax assets at the balance sheet date

is dependent on future earnings, which are uncertain. Accordingly, a
full valuation allowance was recorded against the assets. A reversal of the
valuation allowance will be considered when it is more likely than not that
the Company's deferred tax assets (comprised mostly of net operating loss
carryforwards and research credits) will be realized.
As of December 31, 1997, the Company had net operating loss
carryforwards available for federal income tax reporting expiring in years
2003 through 2012, amounting to $158.6 million. In addition, the Company has
$3.2 million of general business credit carryforwards expiring through 2012.
The total regular tax net operating loss available of $158.6 million
includes $37.3 million that, when realized, will not affect financial
statement income but will be recorded directly to shareholders' equity. The
realization of net operating losses may be limited by Internal Revenue Code,
Section 382.

121. FORWARD EXCHANGE CONTRACTS
Beginning in 1997, the Company entered into foreign forward exchange
contracts to hedge against foreign exchange rate fluctuations that may occur
on the Company's foreign currency denominated obligations. During 1997, the
Company entered into forward deutsche mark contracts in the amount of $21,535
, all expiring within one year. Through December 31, 1997, $2,495 of
these contracts have been paid, resulting in a remaining contract balance of
$19,040. Fair value of the remaining balance at December 31, 1997 was
$18,625, resulting in an unrealized loss of $415. Unrealized gains and
losses on foreign forward exchange forward contracts that
are designated and effective as hedges are deferred and recognized in

the same period that the hedged obligation is recognized. The notional
principal amounts for off-balance sheet instruments provide one measure of
the transaction volume outstanding as of year end, and does not represent the
amount of the Company's exposure to credit or market loss. The Company's
exposure to credit loss and market risk will vary over time as a function of
interest rates and currency rates.

132. COMMITMENTS AND CONTINGENCIES
Construction Agreements
The Company entered into an engineering, procurement, construction and
validation services agreement with Fluor Daniel, Inc. ("Fluor") in July 1996
to design and construct the Company's manufacturing facility located on a 27
acre site in Frederick, Maryland. As of December 31, 1997, $42.4 million of
the $42.5 million contract has been paid. In addition, the Company is in
negotiations with Fluor to make payments in 1998 for additional expenditures
needed to complete the facility. The facility will provide capacity for the
production of immune globulin products; cell culture for other product
candidates, including Synagis; filling and packaging; warehousing;
laboratories and administration.
Manufacturing, Supply and Purchase Agreements
In 1989 and 1990, the Company entered into a series of contracts with
the Massachusetts Public Health Biologic Laboratory, then a division of the
Massachusetts Department of Public Health (the "State Lab"), and the
Massachusetts Health Research Institute, Inc. ("MHRI") pursuant to which the
Company agreed to license certain technology from the Commonwealth of
Massachusetts and to collaborate on the development of the technology. The
technology relates to the two products, RespiGam and CytoGam, currently being
marketed by the Company.
At the end of 1996, the Inspector General of the Commonwealth of

Massachusetts publicly issued a report alleging, among other things, that
certain present and former employees of the State Lab or MHRI were personally
receiving from MHRI, in violation of state law, a portion of the royalties
the Company was paying to MHRI on sales of RespiGam. The report also alleged
that the terms of the agreements were unfair to the Commonwealth and,
accordingly, the Commonwealth now has the right to rescind the agreements
notwithstanding the fact that the parties had operated under those agreements
for over seven years. The Inspector General has no enforcement powers.
The Company regards the allegations of the Inspector General, as they
relate to the Company, to be without merit. The Company has denied those
allegations and in early 1997 provided the Commonwealth with a detailed
rebuttal of the claims of the Inspector General pertaining to the Company.
The Company has been engaged with representatives of the Commonwealth in
negotiations to settle the matter on a mutually satisfactory basis. While
the Company believes that substantial progress has been made toward resolving
this matter in a manner generally acceptable to the Company (with no loss of
the Company's rights to technology and no interruption of operations under
the agreements, but with increased royalties), there can be no assurance that
a final resolution will, in fact, be achieved. If no settlement is reached,
the Company may be forced to litigate with the Commonwealth, and there can be
no assurance that the outcome of such a litigation would be favorable to the
Company. An unfavorable outcome could have a material adverse effect on the
Company.
The Company has entered into manufacturing, supply and purchase
agreements in order to provide production capability for CytoGam and
RespiGam, and to provide a supply of human plasma for production of both
products. No assurances can be given that an adequate supply of

plasma will be available from the Company's suppliers. Human plasma for
CytoGam and RespiGam is converted to an intermediate raw material (Fraction
II+III paste) under two supply agreements with two vendors. This
intermediate material is then supplied to the manufacturer of the bulk
product, the State Lab. Pursuant to the agreements with the State Lab, the
Company paid $10.2 million in 1997, $9.7 million in 1996, and $5.2 million in
1995 for production and process development. The Company has an informal
arrangement with the State Lab for planned production through June 1998 for
$7,820, subject to production level adjustments. If the State Lab, which
holds the sole product and establishment licenses from the FDA for the
manufacture of CytoGam and RespiGam, is unable to satisfy the Company's
requirements for both products on a timely basis or is prevented for any
reason from manufacturing CytoGam and RespiGam, the Company may be unable to
secure an alternative manufacturer without undue and materially adverse
operational disruption and increased cost. The Company also has an agreement
with Connaught to fill and package the Company's immune globulin products
through 1998.
In December 1997, the Company entered into an agreement with Boehringer
Ingelheim Pharma KG, to provide supplemental manufacturing of the Company's
second generation RSV product, Synagis, for which a BLA was submitted to the
FDA in December 1997. The Company expensed as other operating expenses
$5,403 in 1997 related to scale-up of production as part of this agreement.
The Company is obligated to pay approximately 34.2 million deutsche
marks, or about $19.4 million in 1998 for scale-up and market entry
quantities of Synagis. There can be no assurances that should the
manufacturer be unable to supply Synagis to the Company for any reason, that
the Company will be able to secure an alternate manufacturer in a timely
basis or without increased cost. Nor can there be any assurances that the
Company or the supplemental

manufacturer will be licensed by the appropriate regulatory authorities
to manufacture or market the product.

14. OTHER OPERATING EXPENSES
Other operating expenses in 1997 include the costs of start-up of the
Frederick manufacturing facility and scale-up of production of Synagis at the
Gaithersburg pilot plant and at a third-party manufacturer, Boehringer
Ingelheim Pharma KG ("BI") in Biberach, Germany. The Company expects to
incur significant start-up and scale-up costs throughout 1998 and into 1999.
Other operating expenses in 1995 include charges to Connaught in
connection with an agreement to fill and package the Company's immune
globulin products.

135. PENSION PLAN
The Company has a defined contribution 401(k) pension plan available to
all full time employees. Employee contributions are voluntary and are
determined on an individual basis subject to the maximum allowable under
federal tax regulations. Participants are always fully vested in their
contributions. The Company began employer contributions as of April 1, 1997.
During 1997, the Company contributed $122 in cash to the plan.

Report of Independent Accountants
To the Board of Directors and Shareholders of MedImmune, Inc.
We have audited the accompanying balance sheets of MedImmune, Inc. (the
Company) as of December 31, 1997 and 1996, and the related statements of
operations, shareholders' equity and cash flows and financial statement
schedule for each of the three years in the period ended December 31, 1997.
These financial statements and the financial statement schedule are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements and financial statement schedule
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of the Company as of
December 31, 1997 and 1996, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1997 in
conformity with generally accepted accounting principles. In addition, in
our opinion the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.

/S/COOPERS & LYBRAND L.L.P.
McLean, Virginia
February 4, 1998

Report of Management

The management of the Company is responsible for the preparation of the
financial statements and related financial information included in this
annual report. The statements were prepared in conformity with generally
accepted accounting principles, and accordingly, include amounts that are
based on informed estimates and judgments.
Management maintains a system of internal controls to provide reasonable
assurance that assets are safeguarded and that transactions are properly
authorized and accurately recorded. The concept of reasonable assurance is
based on the recognition that there are inherent limitations in all systems
of internal accounting control and that the costs of such systems should not
exceed the benefits expected to be derived. The Company continually reviews
and modifies these systems, where appropriate, to maintain such assurance.
The system of internal controls includes careful selection, training and
development of operating and financial personnel, well-defined organizational
responsibilities and communication of Company policies and procedures
throughout the organization.
The selection of the Company's independent accountants, Coopers &
Lybrand L.L.P., has been approved by the Board of Directors and ratified by
the shareholders. The Audit Committee of the Board of Directors, composed
solely of outside directors, meets periodically with the Company's
independent accountants and management to review the financial statements and
related information and to confirm that they are properly discharging their
responsibilities. In addition, the independent accountants and the Company's
legal counsel meet with the Audit Committee, without the presence of
management, to discuss their findings and their observations on other
relevant matters. Recommendations made by Coopers & Lybrand L.L.P. are
considered and appropriate action is taken to respond to these
recommendations.

/s/Wayne T. Hockmeyer, Ph.D. /s/David M. Mott
Chairman and Chief Executive President and Chief Operating
Officer Officer

/s/Lawrence C. Hoff
Chairman of the Audit Committee

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF MEDIMMUNE, INC.

Information with respect to directors is included in the Company's Proxy
Statement to be filed pursuant to Regulation 14A (the "Proxy Statement")
under the caption "Election of Directors," and such information is
incorporated herein by reference. Set forth in Part I, Item 1, are the names
and ages (as of February 6, 1998), the positions and offices held by, and a
brief account of the business experience during the past five years of each
executive officer.

All directors hold office until the next annual meeting of shareholders
and until their successors are elected and qualified. Officers are elected
to serve, subject to the discretion of the Board of Directors, until their
successors are appointed.

ITEM 11. EXECUTIVE COMPENSATION

The section entitled "Executive Compensation" and the information set
forth under the caption "Election of Directors-Director Compensation"
included in the Proxy Statement are incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The common stock information in the section entitled "Principal
Shareholders" of the Proxy Statement is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The section entitled "Certain Transactions" of the Proxy Statement is
incorporated herein by reference.

PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K

The following documents or the portions thereof indicated are filed as a
part of this report.

a) Documents filed as part of the Report

1. Financial Statements and Supplemental Data

a. Balance Sheets at December 31, 1997 and 1996

b. Statements of Operations for the years ended
December 31, 1997, 1996 and 1995

c. Statements of Cash Flows for the years ended
December 31, 1997, 1996 and 1995

d. Statements of Shareholders' Equity for the years
ended December 31, 1997, 1996 and 1995

e. Notes to Financial Statement

f. Report of Independent Accountants

g. Report of Management

2. Supplemental Financial Statement Schedule
Schedule I - Valuation and Qualifying Accounts Page S-1

b) Reports on Form 8-K
Date Filed Event Reported
10/24/97 MedImmune Reports Product Sales Increase 128
Percent in Third Quarter

11/05/97 Letter to Shareholders for 2nd Quarter

11/26/97 MedImmune and BioTransplant Announce Plans
To Test New Drug For Psoriasis

12/03/97 MedImmune Enters Agreement With Boehringer
Ingelheim to Supplement Manufacturing
Capacity for MEDI-493.

12/03/97 MedImmune and Abbott Laboratories Sign
Global Alliance to Market MEDI-493

12/15/97 MedImmune and SmithKline Beecham Form
Worldwide Human Papillomavirus Vaccine
Alliance

12/22/97 MedImmune Requests Marketing Clearance for
MEDI-493

12/29/97 MedImmune and BioTransplant Announce Plans
to Test MEDI-507 for Treatment of Graft-
Versus-Host Disease; IND Submitted

C) ITEM 601 EXHIBITS

Those exhibits required to be filed by Item 601 of Regulation S-K are listed
in the Exhibit Index immediately preceding the exhibits filed herewith and
such listing is incorporated by reference.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

MEDIMMUNE, INC.

/s/ Wayne T. Hockmeyer
Date: March 27, 1998 By: Wayne T. Hockmeyer
Chairman and
Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons in the capacities
and on the dates indicated.

/s/ Wayne T. Hockmeyer
Date: March 27, 1998 Wayne T. Hockmeyer
Chairman and
Chief Executive Officer
(Principal executive officer)

/s/ David M. Mott
Date: March 27, 1998 David M. Mott
President and Chief
Operating Officer (Principal
financial and accounting officer)

/s/ M. James Barrett
Date: March 27, 1998 M. James Barrett, Director

/s/ James H. Cavanaugh
Date: March 27, 1998 James H. Cavanaugh, Director

/s/ Lawrence C. Hoff
Date: March 27, 1998 Lawrence C. Hoff, Director

/s/ Gordon S. Macklin
Date: March 27, 1998 Gordon S. Macklin , Director

/s/ Franklin H. Top, Jr.
Date: March 27, 1998 Franklin H. Top, Jr., Director

/s/ Barbara Hackman Franklin
Date: March 27, 1998 Barbara Hackman Franklin,
Director

Schedule I

MedImmune, Inc.
Valuation and Qualifying Accounts
(in thousands)

Balance
at Balance
beginning at end
of of
Description period Additions Deductions period
- -------------------------- --------- ---------- ---------- -------
For the year ended
December 31, 1997
Trade and Contract
Receivables Allowance $1,425 $4,036 ($2,167) $3,294
Trade Receivables Bad
Debt Reserve 745 -- (641) 104
Inventory Reserve 8 -- (8) --
------ ------ ------- ------
$2,178 $4,036 ($2,816) $3,398
====== ====== ======= ======
For the year ended
December 31, 1996
Trade and Contract
Receivables Allowance $309 $2,136 ($1,020) $1,425
Trade Receivables Bad
Debt Reserve 21 724 -- 745
Inventory Reserve 417 249 (658) 8
------ ------ ------ ------
$747 $3,109 ($1,678) $2,178
====== ====== ====== ======

For the year ended
December 31, 1995
Trade and Contract
Receivables Allowance $272 $498 ($461) $309
Trade Receivables Bad
Debt Reserve 16 5 -- 21
Inventory Reserve -- 500 (83) 417
------ ------ ------ ------
$288 $1,003 ($544) $747
====== ====== ====== ======

S-1

c) Item 601 Exhibits
3.1(4) Restated Certificate of Incorporation, dated May 14, 1991
3.2(3) By-Laws, as amended
10.1(1)(3) License Agreement dated November 15, 1990 between the Company
and Merck & Co., Inc. ("Merck")
10.2(3) Plasma Supply Agreement dated May 31, 1990 between the Company
and Plasma Alliance, Inc.
10.3(3) Termination Agreement dated June 29, 1990 between the Company and
Pediatric Pharmaceuticals, Inc. ("PPI") (formerly MedImmune, Inc.)
10.4(3) RSV Research Agreement dated August 1, 1989 between the Company,
PPI and the Massachusetts Health Research Institute, Inc.
("MHRI")
10.5(3) RSV License Agreement dated August 1, 1989 between the Company,
PPI and MHRI
10.6(3) RSV Supply Agreement dated August 1, 1989 between the Company,
PPI, MHRI and the Massachusetts Public Health Biologic
Laboratory ("MPHBL")
10.7(3) CMV License Agreement dated April 23, 1990 between the Company
and MHRI
10.8(3) First Amendment to CMV License Agreement dated May 3, 1991
between the Company and MHRI
10.9(3) CMV Research Agreement dated April 23, 1990 between the
Company, MHRI and MPHBL
10.10(3) License Agreement dated November 8, 1989 between the Company,
PPI, and the Henry M. Jackson Foundation for the Advancement of
Military Medicine ("HMJ")
10.11(3) Research Agreement dated November 8, 1989 between the Company,
PPI and HMJ
10.12(1)(3) Research and License Agreement dated April 1, 1990 between the
Company and New York University
10.13(1)(3) Research and License Agreement dated January 2, 1991 between
the Company and the University of Pittsburgh
10.14(3) Patent License Agreement between the Company and the National
Institutes of Health regarding parvovirus
10.15(3) License Agreement dated September 1, 1988 between the Company
and Albany Medical College of Union College
10.16(3) License Agreement dated July 5, 1989 between the Company,
Albert Einstein College of Medicine of Yeshiva University, The
Whitehead Institute and Stanford University
10.17(3) License Agreement dated July 1, 1989 between the Company and the
National Technical Information Service ("NTIS")
10.18(3) License Agreement dated September 1, 1989 between the
Company and NTIS
10.19(5) Form of Stock Option Agreement, as amended
E-1
10.20(3) Convertible Preferred Stock and Warrant Purchase Agreement between
HCV, Everest Trust and the Company dated January 12, 1990 with
form of Warrant
10.21(3) Restated Stockholders' Agreement dated May 15, 1991
10.22(3) Lease Agreement between Clopper Road Associates and the Company
dated February 14, 1991
10.23(7) 1991 Stock Option Plan
10.24(3) Sublease between the Company and Pharmavene, Inc.
10.25(4) Agreement between New England Deaconess Hospital Corporation and
the Company, dated as of August 1, 1991
10.26(1)(4) Research Collaboration Agreement between Merck and the Company
effective as of November 27, 1991
10.27(1)(4) Co-promotion Agreement between Merck and the Company
effective as of November 27, 1991
10.28(1)(4) License Agreement between Merck and the Company effective as
of November 27, 1991
10.29(1)(5) Letter Agreement between Merck and the Company, dated January
26, 1993
10.30(1)(5) Termination, Purchase and Royalty Agreement between CLI and the
Company, dated December 24, 1992
10.30.1(1)(12) Amendment to Termination, Purchase and Royalty Agreement
between Connaught Technology Corporation and MedImmune, Inc. dated
December 31, 1995
10.31(1)(5) Research and License Agreement between Cell Genesys, Inc.
and the Company, dated April 29, 1992
10.31(a)(5) Unredacted pages 2-5 of Exhibit 10.31
10.32(5) Form of 1993 Non-Employee Director Stock Option Plan
10.33(1)(8) Sponsored Research and License Agreement between Georgetown
University and the Company dated February 25, 1993
10.34(1)(8) License Agreement between Roche Diagnostic Systems, Inc. and the
Company dated March 8, 1993
10.35(1)(8) Pip/Tazo Co-Promotion Agreement between American Cyanamid
Company and the Company dated November 8, 1993
10.35.1(12) Agreement dated October 26, 1995 between American Cyanamid
Company and the Company
10.36(1)(8) RSVIG Co-Development and Co-Promotion Agreement between American
Cyanamid Company and the Company dated November 8, 1993
10.36.1(12) Agreement dated October 26, 1995 between American Cyanamid
Company and the Company
10.37(1)(8) RSV MAB Co-Development and Co-Promotion Agreement between American
Cyanamid Company and the Company dated November 8, 1993
10.37.1(12) Agreement dated October 26, 1995 between American
E-2
Cyanamid Company and the Company
10.38(1)(8) RSV Vaccine Co-Development and Co-Promotion Agreement between
American Cyanamid Company and the Company dated November 8, 1993
10.38.1(12) Agreement dated October 26, 1995 between American Cyanamid
Company and the Company
10.39(1)(10) Fraction II + III Paste Supply Agreement between Baxter
Healthcare Corporation and the Company dated September 1, 1994
10.40(11) Employment Agreement between David P. Wright and the Company
dated January 2, 1995
10.41(11) Employment Agreement between Bogdan Dziurzynski and the Company
dated February 1, 1995
10.42(11) Employment Agreement between Wayne T. Hockmeyer and the Company
dated February 1, 1995
10.43(11) Employment Agreement between David M. Mott and the Company
dated February 1, 1995
10.44(11) Employment Agreement between Franklin H. Top, Jr. and the
Company dated February 1, 1995
10.45(11) Employment Agreement between James F. Young and the Company
dated February 1, 1995
10.46(1)(11) License Agreement between Symbicom AB and the Company dated
May 20, 1994
10.47(1)(11) License Agreement between the University of Kentucky
Research Foundation and the Company effective June 10, 1994
10.48(1)(11) Research and Development Agreement between the University of
Kentucky Research Foundation and the Company effective June 10, 1994
10.49(1)(11) Research and License Agreement between Washington
University and the Company effective July 1, 1994
10.50(1)(11) Research and License Agreement between Washington
University and the Company effective March 1, 1995
10.51(1)(9) License Agreement between Baxter Healthcare Corporation and
MedImmune, Inc. effective June 2, 1995
10.52(1)(9) Stock Purchase Agreement between Baxter Healthcare Corporation
and MedImmune, Inc. dated June 22, 1995
10.53(2)(10) Alliance Agreement between BioTransplant, Inc. and MedImmune,
Inc. dated October 2, 1995
10.54(12) Stock Purchase Agreement dated October 25, 1995 between
MedImmune, Inc. And American Home Products
10.55(2)(12) Collaboration and License Agreement dated as of July 27,
1995 between MedImmune, Inc. And Human Genome Sciences, Inc.
10.56(12) Stipulation of Settlement in reference to MedImmune,
E-3
Inc. Securities Litigation, Civil Action No. PJM93-3980
10.57(2)(13) Plasma Supply Agreement dated effective as of February 8, 1996,
by and between DCI Management Group, Inc. and MedImmune, Inc.
10.58(2)(13) License and Research Support Agreement dated as of April
16, 1996, between The Rockefeller University and MedImmune, Inc.
10.59(14) First Amendment of Lease Between Clopper Road Associates
and MedImmune, Inc. dated June 8, 1993.
10.60(14) Second Amendment of Lease Between Clopper Road Associates
and MedImmune, Inc. dated June 30, 1993.
10.61(14) Third Amendment of Lease between Clopper Road Associates and
MedImmune, Inc. effective as of January 1, 1995.
10.62(14) Fourth Amendment of Lease between Clopper Road Associates
and MedImmune, Inc. dated October 3, 1996.
10.63(14) Fifth Amendment of Lease between Clopper Road Associates and
MedImmune, Inc. dated October 3, 1996.
10.64(1)(14) Engineering, Procurement, Construction and Validation Services
Agreement between MedImmune, Inc. and Fluor Daniel, Inc. effective
as of July 31, 1996.
10.65(2)(14) Research and License Agreement between OraVax Merieux Co.
and MedImmune, Inc. effective as of November 1, 1996.
10.66 (15) Employment Agreement between Wayne T. Hockmeyer and
MedImmune, Inc. effective April 1, 1997.
10.67 (15) Employment Agreement between David M. Mott and MedImmune,
Inc. effective April 1, 1997.
10.68 (15) Employment Agreement between Franklin H. Top and MedImmune,
Inc. effective April 1, 1997.
10.69 (15) Employment Agreement between David P. Wright and MedImmune,
Inc. effective April 1, 1997.
10.70 (15) Employment Agreement between James F. Young and MedImmune,
Inc. effective April 1, 1997.
10.71 (15) Employment Agreement between Bogdan Dziurzynski and
MedImmune, Inc. effective April 1, 1997.
10.72 (16) Master Loan & Security Agreement, dated June 16, 1997 by
and between Transamerica and MedImmune, Inc.
10.73(2)(16)Patent License Agreement, (MEDI-493) dated July 17, 1997 by
and between Protein Design Labs and MedImmune, Inc.
10.74(2)(16)Patent License Agreement, (MEDI-507) dated July 17, 1997 by
and between Protein Design Labs and MedImmune, Inc.
10.75 Sixth Amendment of Lease between ARE-QRS Corp. and
MedImmune, Inc. dated September 10, 1997.
10.76(2) Co-Promotion Agreement between Abbott Laboratories and
E-4
MedImmune, Inc. dated November 26, 1997
10.77(2) Contract Research and Development Agreement between
MedImmune, Inc. and Dr. Karl Thomae GmbH dated November 27, 1997.
10.78(2) Manufacturing Agreement between MedImmune, Inc. and Dr.
Karl Thomae GmbH dated November 27, 1997.
10.79(2) Distribution Agreement between MedImmune, Inc. and Abbott
International, Ltd. dated November 26, 1997.
10.80(2) License Agreement between Loyola University of Chicago and
MedImmune, Inc. dated December 3, 1997.
10.81(2) Research Collaboration and License Agreement between
SmithKline Beecham and MedImmune, Inc. dated December 10, 1997.
23.1 Consent of Independent Accountants
______________
(1) Confidential treatment has been granted by the SEC. The copy
filed as an exhibit omits the information subject to the confidentiality
grant.
(2) Confidential treatment has been requested. The copy filed as
an exhibit omits the information subject to the confidentiality request.
(3) Incorporated by reference to exhibit filed in connection with
the Company's Registration Statement No. 33-39579.
(4) Incorporated by reference to exhibit filed in connection with
the Company's Registration Statement No. 33-43816.
(5) Incorporated by reference to exhibit filed in connection with
the Company's Annual Report on Form 10-K for the year ended December 31,
1992.
(6) Incorporated by reference to exhibit filed in connection with
the Company's Annual Report on Form 10-K for the year ended December 31,
1991.
(7) Incorporated by reference to exhibit filed in connection with
the Company's Registration Statement No. 33-46165.
(8) Incorporated by reference to exhibit filed in connection with
the Company's Annual Report on Form 10-K for the year ended December 31,
1993.
(9) Incorporated by reference to exhibit filed in connection with
the Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
1995.
(10) Incorporated by reference to exhibit filed in connection
September 30, 1995.
(11) Incorporated by reference to exhibit filed with the Company's
Annual Report on Form 10-K for December 31, 1994.
(12) Incorporated by reference to exhibit filed with the
E-5
Company's Annual Report on Form 10-K for December 31, 1995.
(13) Incorporated by reference to exhibit filed with the Company's
Quarterly Report on Form 10-Q for the Quarter ended June 30, 1996.
(14) Incorporated by reference to exhibit filed with the Company's
Annual Report on Form 10-K for December 31, 1996.
(15) Incorporated by reference to exhibit filed with the Company's
Quarterly Report on Form 10-Q for the Quarter ended March 31, 1997.
(16) Incorporated by reference to exhibit filed with the Company's
Quarterly Report on Form 10-Q for the Quarter ended September 30, 1997.

E-6