10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-Q

ý  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2005

0-19131

(Commission File No.)

MedImmune, Inc.

(Exact name of registrant as specified in its charter)

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

One MedImmune Way, Gaithersburg, MD 20878

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code (301) 398-0000

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 ý     No o

Indicate by check mark whether the registrant is an accelerated filer (as defined by Rule 12b-2 of the Exchange Act). Yes ý No o

As of July 18, 2005, 246,331,970 shares of Common Stock, par value $0.01 per share, were outstanding.

MEDIMMUNE, INC.

Index to Form 10-Q

Part I	Financial Information
	Item 1.	Financial Statements
		Consolidated Balance Sheets
		Consolidated Statements of Operations
		Condensed Consolidated Statements of Cash Flows
		Notes to Consolidated Financial Statements
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk
	Item 4.	Controls and Procedures
Part II	Other Information
	Item 1.	Legal Proceedings
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds
	Item 3.	Defaults upon Senior Securities
	Item 4.	Submission of Matters to a Vote of Security Holders
	Item 5.	Other Information
	Item 6.	Exhibits

MedImmune, Synagis, CytoGam, Ethyol, FluMist, NeuTrexin, RespiGam and Vitaxin are registered trademarks of the
Company. Numax is a trademark of the Company.

Unless otherwise indicated, this quarterly report is as of June 30, 2005. This quarterly report will not be updated as a result of new information or future events.

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

MEDIMMUNE, INC.

CONSOLIDATED BALANCE SHEETS

(in millions)

	June 30, 2005			December 31, 2004
	(Unaudited)
ASSETS:
Cash and cash equivalents	$	228.0		$	171.3
Marketable securities	454.5			172.6
Trade receivables, net	13.6			203.3
Inventory, net	87.5			64.1
Deferred tax assets, net	55.6			50.6
Other current assets	23.1			31.9
Total Current Assets	862.3			693.8
Marketable securities	1,088.7			1,362.2
Property and equipment, net	332.3			310.9
Deferred tax assets, net	91.8			127.3
Intangible assets, net	8.7			13.1
Goodwill	24.8			24.8
Other assets	37.1			32.3
Total Assets	$	2,445.7		$	2,564.4
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Accounts payable	$	17.3		$	15.1
Accrued expenses	144.2			251.4
Product royalties payable	53.2			85.9
Other current liabilities	44.0			11.4
Total Current Liabilities	258.7			363.8
Long-term debt	505.7			506.2
Other liabilities	1.0			19.8
Total Liabilities	765.4			889.8
Commitments and Contingencies
SHAREHOLDERS’ EQUITY:
Preferred stock, $.01 par value; authorized 5.5 shares; none issued or outstanding	—			—
Common stock, $.01 par value; authorized 420.0 shares; issued 255.4 at June 30, 2005 and 255.4 at December 31, 2004	2.6			2.6
Paid-in capital	2,692.3			2,690.0
Deferred compensation	—			(0.1		)
Accumulated deficit	(733.2		)	(788.5		)
Accumulated other comprehensive income	1.3			11.1
	1,963.0			1,915.1
Less: Treasury stock at cost; 8.8 shares at June 30, 2005 and 6.9 shares at December 31, 2004	(282.7		)	(240.5		)
Total Shareholders’ Equity	1,680.3			1,674.6
Total Liabilities and Shareholders’ Equity	$	2,445.7		$	2,564.4

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

1

MEDIMMUNE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in millions, except per share data)

	Three months ended						Six months ended
	June 30,						June 30,
	2005			2004			2005			2004
Revenues:
Product sales	$	84.7		$	90.7		$	593.4		$	573.9
Other revenue	3.8			2.9			4.9			8.7
Total revenues	88.5			93.6			598.3			582.6
Costs and expenses:
Cost of sales	28.0			37.3			147.8			195.5
Research and development	79.3			67.8			148.6			117.6
Selling, general and administrative	60.9			58.9			218.4			182.6
Other operating expenses	2.9			2.1			5.5			3.9
Impairment of intangible asset	—			73.0			—			73.0
Acquired in-process research and development	—			24.7			—			24.7
Total expenses	171.1			263.8			520.3			597.3
Operating (loss) income	(82.6		)	(170.2		)	78.0			(14.7		)
Interest income	17.6			16.5			34.3			32.7
Interest expense	(1.9		)	(2.1		)	(3.9		)	(4.3		)
(Loss) gain on investment activities	(1.2		)	0.6			(0.9		)	7.3
(Loss) earnings before income taxes	(68.1		)	(155.2		)	107.5			21.0
(Benefit) provision for income taxes	(23.9		)	(54.9		)	37.6			10.3
Net (loss) earnings	$	(44.2	)	$	(100.3	)	$	69.9		$	10.7
Basic (loss) earnings per share	$	(0.18	)	$	(0.40	)	$	0.28		$	0.04
Shares used in calculation of basic (loss) earnings per share	247.4			248.7			247.7			248.5
Diluted (loss) earnings per share	$	(0.18	)	$	(0.40	)	$	0.28		$	0.04
Shares used in calculation of diluted (loss) earnings per share	247.4			248.7			257.0			249.8

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

2

MEDIMMUNE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in millions)

	Six months ended June 30,
	2005			2004
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings	$	69.9		$	10.7
Adjustment to reconcile net earnings to net cash provided by operating activities:
Impairment of intangible asset	—			73.0
Deferred taxes	37.8			10.7
Advances from Wyeth	—			(51.9		)
Depreciation and amortization	16.3			19.8
Amortization of premium on marketable securities	7.8			7.6
Realized losses (gains) on investments	0.9			(7.3		)
Losses on write downs of inventory	7.6			26.2
Decrease in sales allowances	(12.3		)	(20.4		)
Other	2.3			0.6
Other changes in assets and liabilities	58.3			34.9
Net cash provided by operating activities	188.6			103.9
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in marketable securities, net	(29.8		)	(210.8		)
Capital expenditures	(37.0		)	(34.5		)
Investments in strategic alliances	(7.9		)	(17.5		)
Net cash used in investing activities	(74.7		)	(262.8		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuances of common stock	10.8			9.9
Share repurchases	(67.5		)	—
Debt prepayments	—			(172.7		)
Repayments of long-term obligations	(0.5		)	(0.4		)
Net cash used in financing activities	(57.2		)	(163.2		)
Effect of exchange rate changes on cash	—			—
Net increase (decrease) in cash and cash equivalents	56.7			(322.1		)
Cash and cash equivalents at beginning of period	171.3			515.5
Cash and cash equivalents at end of period	$	228.0		$	193.4

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

3

MEDIMMUNE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. Organization

MedImmune, Inc., a Delaware corporation (together with its subsidiaries, the “Company”), is a biotechnology company headquartered in Gaithersburg, Maryland.  The Company is committed to advancing science to develop better medicines that help people live healthier, longer and more satisfying lives.  The Company currently focuses its efforts on using biotechnology to produce innovative products for prevention and treatment in the therapeutic areas of infectious disease, oncology and immunology.  The Company’s scientific expertise is largely in the areas of monoclonal antibodies and vaccines.  The Company markets four products, Synagis, FluMist, Ethyol and CytoGam and has a diverse pipeline of development-stage products.

2. Summary of Significant Accounting Policies

General

The financial information presented as of and for the three and six months ended June 30, 2005 (“Q2 2005” and “YTD 2005,” respectively) and as of and for the three and six months ended June 30, 2004 (“Q2 2004” and “YTD 2004,” respectively) is unaudited.  In the opinion of the Company’s management, the financial information presented herein contains all adjustments, which consist only of normal recurring adjustments, necessary for a fair presentation of results for the interim periods presented.  Interim results are not necessarily indicative of results for an entire year or for any subsequent interim period.  These consolidated financial statements should be read in conjunction with the Company’s 2004 Annual Report on Form 10-K and the Company’s March 31, 2005 Quarterly Report on Form 10-Q.

New Accounting Pronouncements

In December 2004, the FASB issued SFAS 123R, a revision of SFAS 123, “Accounting for Stock-based Compensation.” SFAS 123R requires public companies to recognize expense associated with share-based compensation arrangements, including employee stock options, using a fair value-based option pricing model, and eliminates the alternative to use the intrinsic value method of accounting for share-based payments under Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”).  SFAS 123R was to be effective for the Company’s interim quarter beginning on July 1, 2005, but in April 2005 the Securities and Exchange Commission (“SEC”) issued a rule that delays the date for compliance with SFAS 123R to the Company’s fiscal year beginning January 1, 2006.  Adoption of the expense provisions of the statement is expected to have a material impact on the Company’s results of operations.  SFAS 123R allows three alternative transition methods for public companies; the Company has not determined which transition method it will adopt.  Upon adoption, the Company will select an expense attribution method to use for new share-based awards that have graded-vesting features and service conditions.  Currently, the Company anticipates implementing the straight-line expense attribution method, whereas the Company’s current expense attribution method is the graded-vesting method, an accelerated method, described by FASB Interpretation No. 28 (“FIN 28”), “Accounting for Stock Appreciation Rights and Other Variable Stock Option or Award Plans.”

Stock-based Compensation

Compensation costs attributable to stock option and similar plans are currently recognized based on any excess of the quoted market price of the stock on the date of grant over the amount the employee is required to pay to acquire the stock, in accordance with the intrinsic-value method under APB 25.  Such amount, if any, is accrued over the related vesting period.

The following table illustrates the effect on net earnings and earnings per share if the Company had applied the fair value recognition provisions to stock-based employee compensation (in millions, except per share data):

		Q2 2005			Q2 2004(1)			YTD 2005			YTD 2004(1)
Net (loss) earnings, as reported		$	(44.2	)	$	(100.3	)	$	69.9		$	10.7
Add:	Stock-based employee compensation expense included in historical results for the vesting of stock options assumed in conjunction with the Aviron acquisition, calculated in accordance with FIN 44, “Accounting for Certain Transactions Involving Stock Compensation-an Interpretation of APB 25,” net of related tax effect	—			0.2			0.1			0.4
Deduct:	Stock-based employee compensation expense determined under the fair value based method for all awards, net of related tax effect	(14.2		)	(16.0		)	(28.8		)	(31.4		)
Pro forma net (loss) earnings		$	(58.4	)	$	(116.1	)	$	41.2		$	(20.3	)
Basic (loss) earnings per share, as reported		$	(0.18	)	$	(0.40	)	$	0.28		$	0.04
Basic (loss) earnings per share, pro forma		$	(0.24	)	$	(0.47	)	$	0.17		$	(0.08	)
Diluted (loss) earnings per share, as reported		$	(0.18	)	$	(0.40	)	$	0.28		$	0.04
Diluted (loss) earnings per share, pro forma		$	(0.24	)	$	(0.47	)	$	0.16		$	(0.08	)

4

(1)The pro forma net losses for Q2 2004 and YTD 2004 of $116.1 million and $20.3 million, respectively, have been recomputed from the pro forma net losses previously disclosed of $115.6 million and $14.3 million, respectively, in order to reflect a revised estimated tax effect and to properly reflect the Company’s accounting policy for amortization of compensation costs using the graded-vesting method described by FIN 28.

As of June 30, 2005, there was approximately $62 million of total unrecognized pro forma compensation cost, net of tax, related to nonvested stock option awards.  Approximately 41% and 41% of this unrecognized compensation cost will be amortized during the remainder of 2005 (for disclosure purposes) and in 2006, respectively.

Effective January 1, 2005, the Company has estimated the fair value of stock compensation expense associated with employee stock options using the binomial model approach.  The Company believes that the binomial approach provides a better measure of fair value of employee stock options because it incorporates assumptions about patterns of employee exercises in relation to such considerations as stock price appreciation, post-vesting employment termination behavior, the contractual term of the option and other factors. Historically, the Company estimated the fair value of employee stock options using the Black-Scholes option pricing model, which does not incorporate such correlation assumptions.

Based on an analysis of economic data that marketplace participants would likely use in determining an exchange price for an option, the Company’s weighted-average estimate of expected volatility for YTD 2005 ranged from 31% to 32%, reflecting the implied volatility determined from the market prices of traded call options on the Company’s stock.  During YTD 2004, the weighted-average estimate of expected volatility using monthly observations was 50%, based on the historical volatility over the expected term.

The following disclosure provides a description of the significant assumptions used during 2005 and 2004 to estimate the fair value of the Company’s employee stock option awards.

2005 - The fair value of employee stock options granted during 2005 was estimated using a binomial model that uses the weighted-average assumptions shown in the table below.  The Company uses historical data to estimate option exercise and employee termination within the binomial model; separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes.  The expected life of an option is derived from the output of the binomial model and represents the period of time that options granted are expected to be outstanding; the range given below results from certain groups of employees exhibiting different exercise patterns.  The risk-free interest rate is based on the rate currently available for zero-coupon U.S. government issues with a term equal to the contractual life of the option.

	Q1 2005			Q2 2005
Option pricing model	Binomial			Binomial
Expected stock price volatility	32		%	31		%
Expected dividend yield	0		%	0		%
Expected life of option – years	4.6 to 5.1			4.5 to 5.4
Risk-free interest rate	4.3		%	4.2		%
Weighted average fair value of options granted	$	8.27		$	9.41

2004 - The fair value of employee stock options granted during 2004 was estimated using a Black-Scholes model that uses the weighted-average assumptions shown in the table below.  The expected life of an option was derived from historical stock option exercise experience.  The risk-free interest rate was based on the rate currently available for zero-coupon U.S. government issues with a term equal to the expected life of the option.

	Q1 2004			Q2 2004
Option pricing model	Black-Scholes			Black-Scholes
Expected stock price volatility	50		%	50		%
Expected dividend yield	0		%	0		%
Expected life of option – years	5.0			5.0
Risk-free interest rate	2.8		%	3.9		%
Weighted average fair value of options granted	$	11.07		$	11.49

5

Product Royalties

During Q2 2005, the Company recouped approximately $12 million from licensors related to overpayments under various royalty agreements.  This amount has been deferred until fully realizable and recorded in Other Current Liabilities.

3. Dissolution of the Collaboration with Wyeth

During Q2 2004, the Company entered into agreements to dissolve the collaboration with Wyeth for FluMist, CAIV-T and all related technology.  As a result of the dissolution, MedImmune reacquired the influenza vaccines franchise, and assumed full responsibility for the manufacturing, marketing, and sale of FluMist and any subsequent related product.  Wyeth provided bulk manufacturing materials and transferred clinical trial data, as well as provided manufacturing services, during a transition that was completed in large part by the end of 2004.  In connection with the dissolution of the collaboration, during Q2 2004 the Company recorded a charge to in-process research and development of $24.7 million and a permanent impairment charge of $73.0 million to write off the remaining unamortized cost of the intangible asset recorded for the worldwide collaboration with Wyeth.

4. Intangible Assets

The Company’s intangible assets are definite-lived assets stated at amortized cost. The Company reviews its intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Intangible assets are comprised of the following (in millions):

	June 30, 2005			December 31, 2004
Agreement with Evans	$	39.0		$	39.0
Other intangible assets	0.4			0.4
	39.4			39.4
Less accumulated amortization	(30.7		)	(26.3		)
	$	8.7		$	13.1

Amortization of intangible assets is computed on the straight-line method based on the estimated useful lives of the assets. Amortization for Q2 2005 and Q2 2004 was $2.2 million and $2.2 million, respectively.Amortization for YTD 2005 and YTD 2004 was $4.4 million and $6.3 million, respectively.The estimated aggregate amortization for the remaining life of the Evans agreement is as follows: remainder of 2005, $4.3 million; and 2006, $4.4 million.

5. Inventory

Inventory, net of valuation reserves, is comprised of the following (in millions):

	June 30, 2005		December 31, 2004
Raw Materials	$	14.7	$	16.5
Work in Process	65.3		38.3
Finished Goods	7.5		9.3
	$	87.5	$	64.1

The Company recorded permanent inventory write downs totaling $3.0 million and $12.9 million during Q2 2005 and Q2 2004, respectively, and $7.6 million and $26.2 million during YTD 2005 and YTD 2004, respectively, in cost of goods sold to reflect total FluMist inventories at net realizable value.

6. Earnings per Share

The following is a reconciliation of the numerators and denominators of the diluted EPS computation:

	Q2 2005			Q2 2004			YTD 2005		YTD 2004
Numerator (in millions):
Net (loss) earnings for basic EPS	$	(44.2	)	$	(100.3	)	$	69.9	$	10.7
Adjustments for interest expense on 1% Convertible Senior Notes, net of tax (1)	—			—			1.1		—
(Loss) earnings for diluted EPS	$	(44.2	)	$	(100.3	)	$	71.0	$	10.7

6

	Q2 2005			Q2 2004			YTD 2005		YTD 2004
Denominator (in millions):
Weighted average shares for basic EPS	247.4			248.7			247.7		248.5
Effect of dilutive securities:
Stock options and warrants	—			—			2.0		1.3
1% Convertible Senior Notes (1)	—			—			7.3		—
Weighted average shares for diluted EPS	247.4			248.7			257.0		249.8
Basic (loss) earnings per share	$	(0.18	)	$	(0.40	)	$	0.28	$	0.04
Diluted (loss) earnings per share	$	(0.18	)	$	(0.40	)	$	0.28	$	0.04

(1) EITF Issue No. 04-8, “The Effect of Contingently Convertible Debt on Diluted Earnings per Share,” which became effective during the fourth quarter of 2004, requires that all contingently convertible debt instruments be included in diluted earnings per share using the if-converted method, regardless if the market price trigger (or other contingent feature) has been met. Under the provisions of EITF 04-8, the Company’s 1% Convertible Senior Notes, which represent 7.3 million potential shares of common stock, will be included in the calculation of diluted earnings per share using the if-converted method whether or not the contingent requirements have been met for conversion to common stock, unless the effect is anti-dilutive.

The Company incurred a net loss for Q2 2005 and Q2 2004 and, accordingly, did not assume exercise or conversion of any of the Company’s outstanding stock options, warrants, or convertible notes during the periods because to do so would be anti-dilutive.  As a result, options and warrants to purchase 34.0 million and 31.0 million shares of common stock were outstanding at June 30, 2005 and 2004, respectively, but were excluded from the calculation of diluted earnings per share.

If option exercise prices are greater than the average market price of the Company’s common stock for the period presented, the effect of including such options in the earnings per share calculation is anti-dilutive. Options to purchase 20.9 million and 21.1 million shares of common stock, respectively, at prices ranging from $25.15 to $83.25 per share and $24.05 to $83.25 per share, were outstanding as of June 30, 2005 and 2004, respectively, but were not included in the computation of diluted earnings per share for YTD 2005 and YTD 2004 because the exercise price of the options exceeded the average market price.

7. Income Taxes

The Company’s effective tax rate was 35% for both Q2 2005 and Q2 2004.  The Company’s effective tax rate for YTD 2005 was 35%, compared to an effective tax rate of 49% for YTD 2004.  The effective tax rate for QTD 2004 and YTD 2004 was impacted by approximately $6.9 million of non-deductible charges for in-process research and development incurred during the second quarter of 2004.

8. Comprehensive Income

	Q2 2005			Q2 2004			YTD 2005			YTD 2004
Net (loss) earnings	$	(44.2	)	$	(100.3	)	$	69.9		$	10.7
Change in foreign currency translation adjustment	(0.4		)	(0.1		)	(0.8		)	(0.3		)
Change in unrealized (loss) gain on investments, net of tax	8.9			(25.8		)	(9.0		)	(21.5		)
Change in unrealized gain on cash flow hedges, net of tax	—			—			—			2.6
Comprehensive income (loss)	$	(35.7	)	$	(126.2	)	$	60.1		$	(8.5	)

Reclassification adjustments, net of tax, during YTD 2004 were $4.4 million.  Reclassification adjustments for Q2 2005, YTD 2005 and Q2 2004 were immaterial.

9. Shareholders’ Equity

During Q2 2005, the Company repurchased approximately 1.9 million shares of common stock under the stock repurchase program at a cost of $50.1 million, or an average cost of $25.94 per share.  During YTD 2005, the Company repurchased approximately 2.6 million shares of common stock under the stock repurchase program at a cost of $67.5 million, or an average cost of $25.56 per share.  Through July 18, 2005, the Company has repurchased an additional 0.4 million shares at an average cost of $27.33 per share.  The Company is holding repurchased shares as treasury shares and is using them for general corporate purposes, including but not limited to for issuance upon exercise of outstanding stock options and acquisition-related transactions.

10. Legal Proceedings

The Company’s material legal proceedings are described in Note 17 to the consolidated financial statements included with the

7

Company’s Annual Report on Form 10-K for the year ended December 31, 2004, as updated in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005.  There have not been any material developments in the proceedings between the Company and Genentech, Inc. or between the Company and Sun Pharmaceutical Industries Limited other than those previously disclosed.  With respect to the other legal proceedings described therein, the following material developments have occurred:

•On June 24, 2005 the Company settled its dispute with Celltech R&D Ltd. related to the Adair 927 Patent, resulting in the dismissal of all pending litigation related to the patent.  Under the terms of the settlement, the Company has no royalty obligation for sales of Synagis before July 1, 2005, which was estimated to range up to $35 million under the original license terms.  The Company agreed to pay Celltech a royalty (which is lower than the royalty rate called for in the original license agreement) based on Synagis sold or manufactured in the United States after July 1, 2005, but the Company does not expect its overall royalty obligation with respect to sales of Synagis to materially change as a result of the settlement.

•In the Company’s suit against Centocor, Inc., the United States Court of Appeals for the Federal Circuit issued a decision on June 1, 2005 denying the Company’s appeal.  The Company has filed a Petition for Rehearing en banc and is awaiting a decision on that petition.

•With respect to the AWP litigation matters, there have been no material developments in the Alabama case, or the New York Counties that were not consolidated in federal court subsequent to the disclosure provided in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005, although the Alabama case and the case brought by the Counties of New York have been removed from state court to federal court upon the motion of the defendant.  With respect to the federal consolidated County case brought by New York Counties in Federal Court, the majority of the causes of action against the Company had been dismissed, but approximately 30 New York Counties have filed an amended and consolidated complaint asserting similar claims to those raised in the original complaint as well as new claims directed to RespiGam and CytoGam and new allegations related to the alleged improper reporting of the Wholesaler Acquisition Cost of various products, including Synagis, RespiGam and CytoGam, and how this alleged improper reporting affects the AWP for these products.  As of June 30, 2005, the Company estimates the range of possible pre-tax loss from the Alabama action, the New York City action and the New York State County actions (both consolidated and unconsolidated) to be between $0 to $11 million, exclusive of alleged treble damages, best price related claims and other asserted state law causes of action. The Company intends to vigorously defend the claims asserted in such complaints.

8

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements regarding future events and future results that are based on current expectations, estimates, forecasts, and the beliefs, assumptions and judgments of our management. Readers are cautioned that these forward-looking statements are only predictions and are subject to risks and uncertainties that are difficult to predict. Readers are referred to the “Forward-Looking Statements” and “Risk Factors” sections in Part I, Item 1 of our Form 10-K for the year ended December 31, 2004.

INTRODUCTION

MedImmune is committed to advancing science to develop better medicines that help people live healthier, longer and more satisfying lives.  MedImmune currently focuses its efforts on using biotechnology to produce innovative products for prevention and treatment in the therapeutic areas of infectious disease, autoimmune disease and cancer. MedImmune’s scientific expertise is largely in the areas of monoclonal antibodies and vaccines. MedImmune markets four products, Synagis, FluMist, Ethyol and CytoGam and has a diverse pipeline of development-stage products.

OVERVIEW OF YTD 2005

Total revenues increased 3% in YTD 2005 as compared to YTD 2004, reflecting 9% growth in sales of Synagis, offset by the impact of lower product sales of FluMist, due to the timing of revenue recognition related to sales for the 2003/2004 influenza season.  We recorded diluted net earnings of $0.28 per share in YTD 2005 compared to diluted net earnings per share of $0.04 in YTD 2004.  YTD 2004 results reflect the impact of the in-process research and development and impairment charges totaling $97.7 million incurred for the reacquisition of the influenza vaccines franchise from Wyeth.  The growth in net income in YTD 2005 is also attributable to an 18% increase in gross profit, partially offset by increased selling, general and administrative expenses, and research and development spending.

Our clinical development efforts in the first half of 2005 included completion of the Phase 3 study to bridge refrigerator-stable CAIV-T to frozen FluMist, with preliminary data showing comparable immunogenicity.  In addition, we continued the preparatory steps required for unblinding the Phase 3 efficacy trial results with CAIV-T in the fall.  We also completed dosing patients in the first Northern Hemisphere portion for our pivotal Phase 3 study for Numax and initiated patient enrollment for the Southern Hemisphere component of the study, and completed patient enrollment in our Phase 2 prostate cancer study with Vitaxin.

During the first half of 2005, we amended our agreement with GlaxoSmithKline for the development of an HPV vaccine. Under the amended agreement, we may also receive certain milestone payments and royalties on future development and sales of an investigational HPV vaccine now in Phase 3 development by Merck & Co., Inc. In addition, we amended our international distribution agreement with Abbott International (“AI”) to include the exclusive distribution of Numax outside of the United States, if and to the extent approved for marketing by the appropriate regulatory authorities.

During June 2005, we settled the dispute with Celltech R&D Ltd. related to the Adair 927 Patent, resulting in the dismissal of all pending litigation related to the patent.  Under the terms of the settlement, we have no royalty obligation for sales of Synagis before July 1, 2005, which was estimated to range up to $35 million under the original license terms.  We agreed to pay Celltech a royalty (which is lower than the royalty rate called for in the original license agreement) based on Synagis sold or manufactured in the United States after July 1, 2005, but we do not expect our overall royalty obligation with respect to sales of Synagis to materially change as a result of the settlement.

The Company’s cash and marketable securities at June 30, 2005 totaled $1.8 billion as compared to $1.7 billion as of December 31, 2004, reflecting the impact of operating cash flows generated during the first six months of 2005, partially offset by repurchases of approximately 2.6 million shares of our common stock at a total cost of $67.5 million.

9

CRITICAL ACCOUNTING ESTIMATES

The preparation of consolidated financial statements requires management to make estimates and judgments with respect to the selection and application of accounting policies that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosures of contingent assets and liabilities.  We consider an accounting estimate to be critical if the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made and if changes in the estimate that are reasonably likely to occur from period to period, or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations.  For additional information regarding our critical accounting estimates, please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2004.  In addition, there are other items within our financial statements that require estimation, but are not deemed critical as defined above.  Changes in estimates used in these and other items could have a material impact on our financial statements.

Inventory - We capitalize inventory costs associated with certain products prior to regulatory approval and product launch, based on management’s judgment of probable future commercial use and net realizable value.  We could be required to permanently write down previously capitalized costs related to pre-approval or pre-launch inventory upon a change in such judgment, due to a denial or delay of approval by regulatory bodies, a delay in commercialization, or other potential factors.  Conversely, our gross margins may be favorably impacted if some or all of the inventory previously written down becomes available and is used for commercial sale.

We capitalize inventory costs associated with marketed products based on management’s judgment of probable future commercial use and net realizable value.  We could be required to permanently write down previously capitalized costs related to commercial inventory due to quality issues or other potential factors.  Conversely, our gross margins may be favorably impacted if some or all of the inventory previously written down was recovered through further processing or receipt of a specification waiver from regulatory agencies, and becomes available and is used for commercial sale.

We are required to state all inventory at lower of cost or market.  In assessing the ultimate realization of inventories, we are required to make judgments as to multiple factors affecting our inventories and compare these with current or committed inventory levels.  In the highly regulated industry in which we operate, raw materials, work-in-process and finished goods inventories have expiration dates that must be factored into our judgments about the recoverability of inventory costs.  Additionally, if our estimate of a product’s demand and pricing is such that we may not fully recover the cost of inventory, we must consider that in our judgments as well.  In the context of reflecting inventory at the lower of cost or market, we will record permanent inventory write-downs as soon as a need for such a write-down is determined.  Such write-downs in inventory are permanent in nature, and will not be reversed in future periods.

The valuation of FluMist inventories requires a significant amount of judgment for multiple reasons.  Specifically, the manufacturing process is complex, in part due to the required annual update of the formulation for recommended influenza strains, and there can be no guarantee that we will be able to continue to successfully manufacture the product.

The annual FluMist production cycle begins in October of the year prior to the influenza season in which the product will be available for consumption.  For example, the production cycle for the 2005/2006 season began in October 2004.  The production cycle begins by preparing the master viral working seeds and readying the manufacturing facilities for the bulk monovalent production, blending three monovalent strains into a trivalent vaccine, filling into intranasal sprayers, packaging sprayers into multi-dose packs and distributing the frozen product.  Our raw materials have expiration dates (dates by which they must be used in the production process) that range from 24 months to 60 months.  Our semi-processed raw materials and work-in-process inventory have multiple components, each having different expiration dates that range from nine to 24 months.  Each season’s finished FluMist product has an approved shelf life ranging from three to nine months.

For all FluMist inventory components on hand as of June 30, 2005, we reviewed the following assumptions to determine the amount of any necessary reserves: expected production levels and estimated cost per dose; sales volume projections that are subject to variability; the expected price to be received for the product and anticipated distribution costs; and current information about the influenza strains recommended by the Centers for Disease Control and Prevention for each season’s vaccine.  The methodology used to calculate adjustments required to value our FluMist inventories as of June 30, 2005 at net realizable value was consistent with the methodology used for our valuations since approval in June 2003.

The valuation of inventory as of June 30, 2005 is based on sales volume and price estimates for the 2005/2006 season that are largely based on our actual experience for the 2004/2005 season.  During the first quarter of 2005, we revised our estimate of production costs for the 2005/2006 season based on anticipated reductions in our plant and manufacturing costs, which decreased the per unit cost to produce FluMist.  Sales and production estimates for the 2005/2006 season incorporated into the inventory valuations performed as of June 30, 2005 were generally consistent with the first quarter of 2005.  Using these assumptions, we compared the amount of expected FluMist sales with the expected production cost to estimate the net realizable value of FluMist inventories as of June 30, 2005.

10

The table below summarizes the activity within the components of FluMist inventories (in millions):

	Gross Inventory			Reserves			Net Inventory
FluMist Details
As of December 31, 2004	$	50.7		$	(35.7	)	$	15.0
Raw materials, net	(1.4		)	1.5			0.1
Cost of goods sold recognized on 2004/2005 inventory	(3.2		)	3.1			(0.1		)
Production, net	30.0			(7.6		)	22.4
Disposals and scrap	(19.5		)	18.4			(1.1		)
As of June 30, 2005	$	56.6		$	(20.3	)	$	36.3

Because finished FluMist product has an approved shelf life of three to nine months, no finished product produced for a particular flu season may be sold in a subsequent season.  Thus, if our actual sales fall below our projections, we will be required to write off any remaining inventory balance at the end of the flu season.

For our other products, we periodically assess our inventory balances to determine whether net realizable value is below recorded cost. Factors we consider include expected sales volume, production capacity and expiration dates.

NEW ACCOUNTING STANDARDS

Issued in December 2004, Statement of Financial Accounting Standards (“SFAS”) No.123R requires public companies to recognize expense associated with share-based compensation arrangements, including employee stock options, using a fair value-based option pricing model, and eliminates the alternative to use Accounting Principles Board Opinion 25’s intrinsic value method of accounting for share-based payments.  SFAS 123R was to be effective for our quarter beginning on July 1, 2005, but in April 2005 the Securities and Exchange Commission (“SEC”) issued a rule that delayed the date for compliance with SFAS 123R to our quarter beginning January 1, 2006.  We expect that adoption of the expense provisions of the Statement will have a material impact on our results of operations.  SFAS 123R allows three alternative transition methods for public companies; we have not determined which transition method we will adopt.  Upon the adoption of SFAS 123R, we will select an expense attribution method to use for new share-based awards that have graded-vesting features and service conditions.  Currently, we anticipate implementing the straight-line expense attribution method, whereas our current expense attribution method is the graded-vesting method, an accelerated method, described by FIN 28.

In anticipation of the adoption of SFAS 123R, we are currently evaluating alternative stock-based compensation programs, including potential changes in the quantity or type of instruments used in share-based payment programs and changes in the terms of share-based payment arrangements.  Any potential changes to our compensation strategy would likely affect comparability to our prior period footnote disclosures of pro forma net earnings and earnings per share.

The actual pro forma expense for disclosure purposes in 2005 is dependent on a number of factors that we cannot predict, including the number of stock options granted, our common stock price, expected future volatility, and other variables utilized in estimating the fair value of stock options at the time of grant.  However, we expect that our pro forma after tax expense for disclosure purposes for stock-based compensation for the full twelve months in 2005 will approximate $40 million to $50 million.  Prior to adoption of FAS 123R in Q1 2006, the Company’s financial statements will not be impacted by the pro forma compensation expense disclosures.

The pro forma stock-based compensation expense disclosure for 2005 is expected to be lower than 2004 due to a lower number of stock options estimated to be granted in 2005, the diminishing impact of accelerated amortization of compensation expense for prior period options (which were assigned higher fair values) under the graded vesting method, and an anticipated reduction in the estimated fair value of new stock option grants.

The estimated fair value of new stock option grants beginning in 2005 is expected to be lower than 2004 for the following reasons:

•Binomial Model—Effective January 1, 2005, we have estimated the fair value of stock compensation expense associated with employee stock options using the binomial model approach.  We believe the binomial approach provides a better measure of fair value of employee stock options because it incorporates assumptions about patterns of employee exercises in relation to such considerations as stock price appreciation, post-vesting employment termination behavior, the contractual term of the option and other factors.  Historically, we estimated the fair value of employee stock options using the Black-Scholes option pricing model, which does not incorporate such correlation assumptions.

•Shorter Expected Life—The expected life of an option represents the period of time that options granted are expected to be outstanding.  During YTD 2005, the expected life of an option, as derived from the output of the binomial model, ranged from 4.5 years to 5.4 years.  For YTD 2004, the expected life of an option was 5 years, estimated based on historical stock option exercise experience.

•Lower Expected Stock Price Volatility— Based on an analysis of economic data that marketplace participants would likely use in determining an exchange price for an option, our weighted-average estimate of expected volatility for YTD 2005 ranged from

11

31% to 32%, reflecting the implied volatility determined from the market prices of traded call options on our stock.  During YTD 2004, the weighted-average estimate of expected volatility was 50%, based on the historical volatility over the expected life, using monthly observations.

RESULTS OF OPERATIONS

Q2 2005 compared to Q2 2004

Revenues – Product Sales

(in millions)	Q2 2005		Q2 2004		Change
Synagis
Domestic	$	43.5	$	39.7	10	%
International	7.4		16.4		(55	)%
	50.9		56.1		(9	)%
Ethyol
Domestic	21.0		24.1		(13	)%
International	1.6		0.9		81	%
	22.6		25.0		(9	)%
FluMist	—		1.2		N/A
Other Products	11.2		8.4		33	%
Total Product Sales	$	84.7	$	90.7	(7	)%

Synagis - Synagis accounted for approximately 60% and 62% of our product sales in Q2 2005 and Q2 2004, respectively.  Due to the seasonal nature of Synagis sales, only five to six percent of the respective overall seasonal sales (July 1 through June 30) typically occur in the second quarter.  In Q2 2005, domestic sales of Synagis increased 10% to $43.5 million from Q2 2004 sales of $39.7 million.  The growth over Q2 2004 primarily resulted from higher sales volumes, with higher sales allowances offsetting the impact of price increases.

We record Synagis international product sales based on AI’s sales price to customers, as defined in our distribution agreement.  Our reported international sales of Synagis decreased 55% to $7.4 million for Q2 2005 as compared to $16.4 million in Q2 2004.  The decrease is primarily attributable to the early stocking of inventories by AI for the 2004/2005 RSV season during Q2 2004.  We currently expect that stocking of inventories by AI for the 2005/2006 RSV season will resume a more normal pattern.

Ethyol - Ethyol accounted for approximately 27% and 28% of our product sales in Q2 2005 and Q2 2004, respectively.  Domestic sales of Ethyol declined 13% to $21.0 million in Q2 2005, compared to $24.1 million in Q2 2004.  Of the overall decline, approximately 19 percentage points resulted from a decrease in domestic sales volume.  We believe that the lower domestic sales volumes are primarily due to the depletion of wholesaler inventories to accommodate end-user demand that was 2% stronger than in the first quarter of 2005.  End-user demand in Q2 2005 declined from Q2 2004 levels due partially to a temporary surge in demand in the prior year quarter, and in part to the on-going impact of the adoption of a relatively new form of radiation treatment in the head and neck cancer market.  The decrease in domestic sales volume was partially offset by an increase in domestic sales prices that contributed five growth points, and the remaining increase was due to lower sales allowances that added one growth point.  We recorded growth in international sales of Ethyol of $0.7 million to $1.6 million in Q2 2005.

FluMist –Our Q2 2004 product sales of FluMist amounted to $1.2 million, representing the final agreed-upon reconciliation of sales discounts and returns with Wyeth as part of the dissolution of our collaboration, relating to the 2003/2004 influenza season.  Due to the seasonal nature of influenza, the majority of FluMist sales are expected to occur between October and January.  Our results for Q2 2005 reflect that seasonality, and we expect that our results will reflect that seasonality going forward.

Other Products - Sales of other products in Q2 2005, which include sales of CytoGam, NeuTrexin, and by-products that result from the CytoGam manufacturing process, increased 33% to $11.2 million in Q2 2005 from $8.4 million in Q2 2004, driven by a 35% increase in CytoGam sales.

Cost of Sales

Cost of sales was $28.0 million for Q2 2005 compared to $37.3 million in Q2 2004.  Gross margins on product sales for Q2 2005 were 67%, up eight percentage points from Q2 2004.  Gross margins for all products, excluding FluMist, were 71% and 76% in Q2 2005

12

and Q2 2004, respectively, primarily reflecting the favorable impact of higher international Synagis sales during Q2 2004 on margins.  Gross margins for FluMist did not materially impact overall gross margins for Q2 2005, but reduced gross margins in Q2 2004 by 17 percentage points.  The lower impact of FluMist on gross margins for Q2 2005 was due to improved sales volume estimates and lower manufacturing cost estimates for the 2005/2006 influenza season (see Critical Accounting Estimates – Inventory).

Research and Development Expenses

Research and development expenses increased 17% to $79.3 million in Q2 2005, compared to $67.8 million in Q2 2004.  The increase in our drug discovery and development expenses is related to a large number of ongoing clinical and preclinical studies, particularly for Numax and CAIV-T which we advanced into Phase 3 in late 2004, as well as costs associated with the expansion of infrastructure to support these studies.  During Q2 2005 and Q2 2004, research and development expenses also include approximately $0.5 million and $10.8 million, respectively, in connection with the technology transfer and transition activities associated with reacquisition of the influenza vaccines franchise from Wyeth.

During Q2 2005, we completed the Phase 3 study to bridge refrigerator-stable CAIV-T to frozen FluMist, with preliminary data showing comparable immunogenicity.  In addition, we continued the preparatory steps required for unblinding the Phase 3 efficacy trial results with CAIV-T in the fall.  In our pivotal Phase 3 trial for Numax in which we are comparing it to Synagis, we enrolled 605 additional patients in the Southern Hemisphere component of the trial during Q2 2005.  Also during Q2 2005, we initiated and completed enrollment for a Phase 2 study for Numax in the southern hemisphere to evaluate the safety of re-dosing children for a second season, and we completed enrollment in the Vitaxin Phase 2 study in prostate cancer.

During Q2 2005, we entered into a collaboration agreement with Avalon Pharmaceuticals, Inc. to discover and develop small molecule therapeutic compounds in the area of inflammatory disease.  In addition, we entered into a collaboration with Seattle Genetics to utilize their proprietary technology to develop antibody-based therapeutics to treat cancer. Under the terms of these agreements, we made upfront payments (that are reflected as Research and Development expenses) and are contingently obligated to provide research and development support, milestone payments and royalties on potential future product sales related to these collaborations.

Selling, General and Administrative Expenses

Selling, general and administrative (“SG&A”) expenses increased 3% to $60.9 million in Q2 2005 compared to $58.9 million in Q2 2004.  The increase is largely attributable to the expansion of the pediatric commercial organization, increased marketing activities, and increased co-promotion expense, corresponding to the increase in domestic Synagis sales.

Impairment of Intangible Asset

As a result of entering into agreements to dissolve the collaboration with Wyeth during April 2004, we recorded a permanent impairment charge of $73.0 million that represented the remaining unamortized cost originally recorded for the original collaboration with Wyeth.

Acquired IPR&D

We recorded a charge of $24.7 million for acquired IPR&D during Q2 2004 in conjunction with our reacquisition of the influenza vaccines franchise from Wyeth.  The charge represented the relative fair value of purchased in-process technologies at the acquisition date, calculated utilizing the income approach, of certain IPR&D projects, primarily CAIV-T.

Taxes

We recorded an income tax benefit of $23.9 million for Q2 2005, resulting in an effective tax rate of 35%.  We recorded an income tax benefit of $54.9 million for Q2 2004, resulting in an effective rate of 37% for the period, excluding the impact of $6.9 million of IPR&D charges incurred during Q2 2004 that are not deductible for tax purposes.  The decline in the effective tax rate reflects additional tax credits available for certain research and development activities, including credits earned for orphan drug status of certain research and experimentation activities.

Net Loss

The reported net loss for Q2 2005 was $44.2 million, or $0.18 per share, compared to net loss for Q2 2004 of $100.3 million or $0.40 per share.  Shares used in computing net loss per share in Q2 2005 were 247.4, while shares used in computing net loss per share for Q2 2004 were 248.7 million.

13

YTD 2005 compared to YTD 2004

Revenues – Product Sales

(in millions)	YTD 2005		YTD 2004		Change
Synagis
Domestic	$	483.0	$	429.8	12	%
International	39.5		48.0		(18	)%
	522.5		477.8		9	%
Ethyol
Domestic	42.6		47.4		(10	)%
International	2.7		2.0		39	%
	45.3		49.4		(8	)%
FluMist	2.8		27.1		(90	)%
Other Products	22.8		19.6		16	%
Total Product Sales	$	593.4	$	573.9	3	%

Synagis -  Synagis accounted for approximately 88% and 83% of our product sales for YTD 2005 and YTD 2004, respectively.  We achieved a 12% increase in domestic Synagis sales to $483.0 million for YTD 2005, up from $429.8 million in YTD 2004.  The growth over the prior year period resulted from higher unit sales volumes, as the impact of price increases was largely offset by higher sales allowances during Q2 2005.  Our reported international sales of Synagis decreased to $39.5 million in YTD 2005 compared to $48.0 million in YTD 2004, primarily due to the early stocking of inventories for 2004/2005 Synagis season by AI during YTD 2004.

FluMist – FluMist accounted for approximately 0.5% and 4.7% of our product sales for YTD 2005 and YTD 2004, respectively.  Sales of FluMist were $2.8 million in YTD 2005, as compared to $27.1 million in YTD 2004, a decrease primarily due to the timing of revenue recognition for product shipped during 2003.  During Q1 2005, we shipped estimated net doses of approximately 0.3 million resulting in product sales of $2.8 million.  Our YTD 2004 sales of FluMist amounted to $27.1 million and include transfer price for product shipped to Wyeth for the entire 2003/2004 season.  During 2003, we shipped 4.1 million doses of FluMist to Wyeth, our former collaboration partner, who was contractually responsible for distributing the product to third parties.  At December 31, 2003, we concluded that the variables associated with FluMist product revenues were not determinable, largely due to low sales volume and the lack of returns history and comparable rebate redemption rates for the new product.  As a result, product revenues associated with the doses that were shipped to Wyeth in 2003 were not recognized until the first quarter of 2004.  Our Q2 2004 product sales of FluMist amounted to $1.2 million, representing the final agreed-upon reconciliation of sales discounts and returns with Wyeth as part of the dissolution of our collaboration.

Ethyol -  Ethyol accounted for approximately 8% and 9% of our product sales for YTD 2005 and YTD 2004, respectively.  Worldwide Ethyol sales declined 8% to $45.3 million in YTD 2005, as compared to $49.4 million in YTD 2004, primarily driven by a 10% decline in domestic sales due to lower unit sales volumes for YTD 2005.  We believe that the lower domestic unit volumes for YTD 2005 as compared to YTD 2004 are partially due to the depletion of wholesaler inventories from December 31, 2004 levels to accommodate end-user demand.  In contrast, we experienced an increase in wholesaler inventories from December 31, 2003 levels.  Domestic end-user demand in the YTD 2005 period declined approximately 3% over YTD 2004, due to the ongoing impact of the adoption of a relatively new form of radiation treatment in the head and neck cancer market.  International sales grew from $2.0 million in YTD 2004 to $2.7 million in YTD 2005.

Other Products -  Sales of other products include sales of CytoGam, RespiGam, NeuTrexin, and by-products that result from the CytoGam manufacturing process and amounted to $22.8 million in YTD 2005 as compared to $19.6 million for YTD 2004.  The increase is primarily due to a 25% increase in sales of CytoGam.

Revenues – Other Revenues

Other revenues of $4.9 million for YTD 2005 are lower than YTD 2004 other revenues of $8.7 million largely due to decreased revenues under collaborative agreements.  Other revenues in YTD 2004 are largely comprised of contractual payments received from Wyeth prior to dissolution of our collaboration, including royalties related to the 2003/2004 influenza season and corporate funding for clinical development and sales and marketing programs.

14

Cost of Sales

Cost of sales for YTD 2005 decreased 24% to$147.8 million from $195.5 million for YTD 2004.  Gross margins on product sales were 75% for YTD 2005, up nine percentage points from gross margins of 66% for YTD 2004.  Gross margins for all products, excluding FluMist, were 76% and 75% in YTD 2005 and YTD 2004, respectively.  Gross margins for FluMist did not materially impact overall gross margins for YTD 2005, but reduced gross margins in YTD 2004 by nine percentage points.  The lower impact of FluMist on gross margins for YTD 2005 was due to improved sales volume estimates and lower manufacturing cost estimates for the 2005/2006 influenza season (see Critical Accounting Estimates).

Research and Development Expenses

Research and development expenses of $148.6 million in YTD 2005 increased 26% from $117.6 million in YTD 2004.  The increase is due largely to direct costs associated with ongoing and additional clinical and preclinical trials for product candidates, as well as increases in headcount and related expenses in support of increased research and development activities.  Also included in research and development expenses in YTD 2005 and 2004 are $1.4 million and $10.8 million, respectively, in costs for technology transfer and transition activities associated with our assumption of research and development activities related to the influenza vaccines franchise.

Selling, General, and Administrative Expenses

Selling, general and administrative (“SG&A”) expenses increased 20% to $218.4 million in YTD 2005 compared to $182.6 million in YTD 2004.  The increase is largely attributable to increased co-promotion expense, corresponding to the increase in domestic Synagis sales, and the expansion of the pediatric commercial organization.  Also included in SG&A expense in YTD 2004 is $0.8 million for other Wyeth-related transition activities.  As a percentage of product sales, SG&A expense increased to 37% of product sales for YTD 2005 compared to 32% of products sales in YTD 2004.

Impairment of Intangible Asset

As a result of entering into agreements to dissolve the collaboration with Wyeth during April 2004, we recorded a permanent impairment loss of $73.0 million that represented the remaining unamortized cost originally recorded for the original collaboration with Wyeth.

Acquired IPR&D

We recorded a charge of $24.7 million for acquired IPR&D for YTD 2004 in conjunction with our reacquisition of the influenza vaccines franchise from Wyeth.  The charge represented the relative fair value of purchased in-process technologies at the acquisition date, calculated utilizing the income approach, of certain IPR&D projects, primarily CAIV-T.

(Loss) Gain on Investment Activities

We recorded a net loss on investment activities of $0.9 million during YTD 2005, compared to a net gain of $7.3 million during YTD 2004.  The YTD 2004 net gain principally consists of realized gains on the sale of certain of our publicly traded equity investments.

Taxes

We recorded income tax expense of $37.6 million for YTD 2005, resulting in an effective tax rate of 35%.  Comparatively, we recorded income tax expense of $10.3 million for YTD 2004, which resulted in an effective tax rate of 37%, excluding the impact of approximately $6.9 million of non-deductible charges for IPR&D incurred during the second quarter of 2004.  Our effective tax rate in both years is impacted by the availability of the estimated credits available for research and development activities, including credits earned for orphan drug status of certain research and development activities, relative to our earnings growth.  These credits will vary from year to year depending on the activities of the Company.

Net Earnings

We reported net earnings for YTD 2005 of $69.9 million, or $0.28 per share compared to net earnings for YTD 2004 of $10.7 million, or $0.04 per share.

Shares used in computing basic and diluted earnings per share for YTD 2005 were 247.7 million and 257.0 million, while shares used for computing basic and diluted earnings per share for YTD 2004 were 248.5 million and 249.8 million, respectively.

We do not believe inflation had a material effect on our financial statements.

15

LIQUIDITY AND CAPITAL RESOURCES

Sources and uses of cash - Cash and marketable securities were $1.8 billion as of June 30, 2005 as compared to $1.7 billion as of December 31, 2004, an increase of 4%.  The increase in cash is primarily due to operating cash flows generated during YTD 2005. Working capital increased to $603.6 million at June 30, 2005 from $330.0 million as of December 31, 2004, also due to cash generated by our operations.

Operating Activities

Net cash provided by operating activities was $188.6 million in YTD 2005 as compared to $103.9 million in YTD 2004.  The change compared to prior period is primarily the result of the increase in net earnings in YTD 2005.

Investing Activities

Cash used for investing activities during YTD 2005 amounted to $74.7 million, as compared to $262.8 million during YTD 2004.  Cash used for investing activities in YTD 2005 included net additions to our investment portfolio of $29.8 million; capital expenditures totaling $37.0 million, primarily for the construction of our new pilot lab in Gaithersburg, Maryland and the expansion of our FluMist manufacturing facilities in Speke, England; and minority interest investments in strategic partners totaling $7.9 million through our venture capital subsidiary.  We expect our capital expenditures for the full year to range from $100 million to $150 million.

Financing Activities

Financing activities used $57.2 million in cash for YTD 2005, as compared to $163.2 million used in YTD 2004. The decrease is principally due to the use of $172.7 million in cash during Q1 2004 to repurchase and retire the balance of the 5 ¼% Convertible Subordinated Notes.  During YTD 2005, we used $67.5 million in cash to repurchase shares of our common stock as authorized under our share repurchase program.  Approximately $10.8 million was received upon the exercise of employee stock options and through the employee stock purchase plan in YTD 2005, as compared to $9.9 million received in YTD 2004.

Our primary source of liquidity is operating cash flow.  Management continues to believe that such internally generated cash flow as well as its existing funds will be adequate to service its existing debt and other cash requirements.  We expend cash to finance our research and development and clinical trial programs; to obtain access to new technologies through collaborative research and development agreements with strategic partners, through our venture capital subsidiary, or through other means; to fund capital projects; and to finance the production of inventories.  In February 2005, our Board of Directors approved an additional $100 million in funding for our venture capital subsidiary to $200 million.  Also, the BBB rating on our outstanding indebtedness, considered to be investment grade, will contribute to our ability to access capital markets, should we desire or need to do so.  We may raise additional capital in the future to take advantage of favorable conditions in the market or in connection with our development activities.

During Q2 2005, we recouped approximately $12 million from licensors related to overpayments under various royalty agreements.  This amount has been deferred until fully realizable and recorded in Other Current Liabilities.

Our Board of Directors has authorized the repurchase of up to $500 million of the Company’s common stock during the period from July 2003 through June 2006 in the open market or in privately negotiated transactions, pursuant to terms management deems appropriate and at such times it may designate.  During YTD 2005, we repurchased approximately 2.6 million shares of common stock under the stock repurchase program at a cost of $67.5 million, or an average cost of $25.56 per share.  Through July 18, 2005, we have repurchased an additional 0.4 million shares at an average cost of $27.33 per share.  As of July 18, 2005, approximately $163 million was available under the authorization for additional repurchases of stock.  We are holding repurchased shares as treasury shares and are using them for general corporate purposes, including but not limited to acquisition-related transactions and for issuance upon exercise of outstanding stock options.

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We believe our primary market risks as of June 30, 2005 continue to be the exposures to loss resulting from changes in interest rates, foreign currency exchange rates, and equity prices.  Our market risks at June 30, 2005 have not changed significantly from those discussed in our Form 10-K for the year ended December 31, 2004.  For other information regarding the Company’s market risk exposure, please refer to Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2004.

ITEM 4.CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s

16

rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer, President and Vice Chairman (“CEO”), and Senior Vice President and Chief Financial Officer (“CFO”), as appropriate, to allow for timely decisions regarding required disclosure.  In designing and evaluating the disclosure controls and procedures, management recognizes that disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.  Accordingly, no evaluation or implementation of a control system can provide complete assurance that all control issues and all possible instances of fraud have been or will be detected.

As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s CEO and CFO, of the effectiveness of the Company’s disclosure controls and procedures, as required by Rule 13a-15(b) promulgated under the Exchange Act.  Based upon that evaluation, the Company’s CEO and its CFO concluded that the Company’s disclosure controls and procedures were effective at the reasonable assurance level.

In addition, the management of the Company, with the participation of the Company’s CEO and its CFO, have determined that there was no change in the Company’s internal control over financial reporting that occurred during Q2 2005 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

17

PART II - OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

Information with respect to legal proceedings is included in Note 10 of Part I, Item 1 “Financial Statements,” and is incorporated herein by reference and should be read in conjunction with the related disclosure previously reported in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004 as updated in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005.

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(c) Issuer purchases of equity securities(1)

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value that May Yet Be Purchased Under the Plans or Programs
April 1, 2005 through April 30, 2005	445,000	$	24.86	445,000	$	211,693,000
May 1, 2005 through May 31, 2005	751,300	$	26.23	751,300	$	191,985,000
June 1, 2005 through June 30, 2005	733,680	$	26.30	733,680	$	172,690,000

(1) The Company’s Board of Directors has authorized the repurchase of up to $500 million of the Company’s common stock on the open market or in privately negotiated transactions during the period from July 2003 through June 2006.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES – NONE

ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

On May 19, 2005 the Company held its Annual Meeting of Stockholders.  Nine director nominees were re-elected to one year terms by vote of the Company’s stockholders at such meeting, as follows:

	For	Against	Withheld	Abstain/ Non-vote
Wayne T. Hockmeyer, Ph.D.	208,767,900	—	4,843,949	—
David M. Mott	208,801,485	—	4,810,364	—
David Baltimore, Ph.D.	210,405,902	—	3,205,947	—
M. James Barrett, Ph.D.	194,158,922	—	19,452,927	—
James H. Cavanaugh, Ph.D.	193,595,545	—	20,016,304	—
Barbara H. Franklin	195,714,100	—	17,897,749	—
Gordon S. Macklin	181,281,042	—	32,330,807	—
George M. Milne, Jr., Ph.D.	210,026,074	—	3,585,775	—
Elizabeth H. S. Wyatt	210,469,621	—	3,142,228	—

The following proposals were also approved by vote of the Company’s stockholders at such meeting, as follows:

To approve the amendment to the 2004 Stock Incentive Plan	119,614,057	61,236,149	—	1,470,061
To approve and ratify PricewaterhouseCoopers LLP as the Company’s independent auditors for 2005	209,283,917	3,084,296	—	1,243,636

18

ITEM 5.OTHER INFORMATION – NONE

ITEM 6.EXHIBITS

(a) Exhibits:
3.1	Company By-laws, currently in effect (as last amended as of May 19, 2005).
10.1(1)	Patent License Agreement (Adair Patent Rights) (MedI-493), dated as of January 19, 1998, by and between Celltech Therapeutics Limited and the Company.
10.2(1)	Patent License Agreement (Adair Patent Rights) (MedI-493), dated as of June 24, 2005, by and among Celltech R&D Limited, UCB S.A. and the Company.
31.1	Rule 13-14(a)/15d-14(a) Certification of CEO.
31.2	Rule 13-14(a)/15d-14(a) Certification of CFO.
32.1	Section 1350 Certifications furnished as permitted by Item 601(b)(32)(ii) of Regulation S-K. This Exhibit 32 is not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, and is not and should not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

(1)Confidential treatment has been requested. The copy filed as an exhibit omits the information subject to the confidentiality request.

19

SIGNATURES

Pursuant to the requirements 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.
	(Registrant)
	/s/ David M. Mott
Date: July 21, 2005	David M. Mott
	Chief Executive Officer, President and Vice Chairman
	Principal Executive Officer
	/s/ Lota S. Zoth
Date: July 21, 2005	Lota S. Zoth
	Senior Vice President and Chief Financial Officer
	Principal Financial Officer
	/s/ Mark E. Spring
Date: July 21, 2005	Mark E. Spring
	Vice President, Finance and Controller
	Principal Accounting Officer

20

EX-3.1

Exhibit 3.1

MEDIMMUNE, INC.

Incorporated under the laws
of the State of Delaware

BY-LAWS

As Amended and Restated through May 19, 2005

TABLE OF CONTENTS

ARTICLE I Offices
SECTION 1.	Registered Office
SECTION 2.	Other Offices
ARTICLE II Stockholders
SECTION 1.	Annual Meetings
SECTION 2.	Special Meetings
SECTION 3.	Notice of Meetings
SECTION 4.	Quorum
SECTION 5.	Organization
SECTION 6.	Order of Business
SECTION 7.	Voting
SECTION 8.	Inspection
SECTION 9.	List of Stockholders
SECTION 10.	Action Without a Meeting
ARTICLE III Board of Directors
SECTION 1.	General Powers
SECTION 2.	Number and Term of Office
SECTION 3.	Election of Directors
SECTION 4.	Resignation, Removal and Vacancies
SECTION 5.	Meetings
SECTION 6.	Directors’ Consent in Lieu of Meeting
SECTION 7.	Action by Means of Conference Telephone or Similar Communications Equipment
SECTION 8.	Committees and Subcommittees
ARTICLE IV Officers
SECTION 1.	Executive Officers
SECTION 2.	Authority and Duties
SECTION 3.	Other Officers
SECTION 4.	Term of Office, Resignation and Removal
SECTION 5.	Vacancies
SECTION 6.	Chairman of the Board
SECTION 7.	Chief Executive Officer
SECTION 8.	President
SECTION 9.	Chief Financial Officer
SECTION 10.	Secretary
SECTION 11.	Treasurer
ARTICLE V General Provisions
SECTION 1.	Execution of Documents
SECTION 2.	Deposits

i

SECTION 3.	Proxies in Respect of Stock or Other Securities of Other Corporations
SECTION 4.	Evidence of Authority
SECTION 5.	Severability
SECTION 6.	Facsimile Signatures; Electronic Transmission
SECTION 7.	Rules of Construction
ARTICLE VI Capital Stock
SECTION 1.	Certificates for Shares
SECTION 2.	Registered Stockholders
SECTION 3.	Transfer and Registration of Stock
SECTION 4.	Addresses of Stockholders
SECTION 5.	Lost, Destroyed and Mutilated Certificates
SECTION 6.	Regulations
SECTION 7.	Fixing Date for Determination of Stockholders of Record
ARTICLE VII Seal
ARTICLE VIII Fiscal Year
ARTICLE IX Indemnification and Insurance
SECTION 1.	Nature of the Indemnity
SECTION 2.	Successful Defense
SECTION 3.	Determination That Indemnification Is Proper
SECTION 4.	Advance Payment of Expenses
SECTION 5.	Procedure for Indemnification of Directors and Officers
SECTION 6.	Survival; Preservation of Other Rights
SECTION 7.	Insurance
SECTION 8.	Severability
SECTION 9.	Subsidiaries
ARTICLE X Amendments

ii

MEDIMMUNE, INC.

BY-LAWS

ARTICLE I

Offices

SECTION 1.Registered Office.  The registered office of MedImmune, Inc. (the “Corporation”) in the State of Delaware shall be in the City of Wilmington, County of New Castle, and the registered agent in charge thereof shall be The Corporation Trust Company.

SECTION 2.Other Offices.  The Corporation may also have an office or offices at other place or places within or without the State of Delaware.

ARTICLE II

Stockholders

SECTION 1.Annual Meetings.  The annual meeting of the stockholders for the election of directors, and for the transaction of such other business as may properly come before the meeting, shall be held at such place, date and hour as shall be fixed by the Board of Directors (the “Board”) and designated in the notice or waiver of notice thereof; except that no annual meeting need be held if all actions, including the election of directors, required by the General Corporation Law of the State of Delaware (or any applicable successor statute, the “DGCL”) to be taken at a stockholders’ annual meeting are taken by written consent in lieu of meeting pursuant to Section 10 of this Article.

SECTION 2.Special Meetings.  A special meeting of the stockholders for any purpose or purposes may be called by the Board, the Chairman, the Chief Executive Officer or the Secretary or the recordholders of at least a majority of the shares of Common Stock of the Corporation issued and outstanding, to be held at such place, date and hour as shall be designated in the notice or waiver of notice thereof.

SECTION 3.Notice of Meetings.  Except as otherwise required by statute or by the Certificate of Incorporation or these By-laws, notice of each annual or special meeting of the stockholders shall be given to each stockholder of record entitled to vote at such meeting not less than 10 or more than 60 days before the day on which the meeting is to be held, by delivering a written notice thereof to him personally; by mailing a copy of such notice, postage prepaid, directly to each such stockholder at his address as it appears in the records of the Corporation; by transmitting notice thereof to him at such address by telegraph or cable; or by transmitting notice thereof to him electronically or by any other method and in such manner as permitted by the DGCL.  Every such notice shall state the place and the date and hour of the meeting, and, in case of a special meeting, the purpose or purposes for which the meeting is called.  Notice of any meeting of stockholders shall not be required to be given to any stockholder who shall attend such meeting in person or by proxy, or who shall, in person or by attorney thereunto authorized, waive such notice in writing, either before or after such meeting.  Except as otherwise provided in these By-laws, neither the business to be transacted at, nor the purpose of, any meeting of the stockholders need be specified in any such waiver of notice.  Notice of any adjourned meeting of stockholders shall not be required to be given, except when expressly required by law.

SECTION 4.Quorum.  At each meeting of the stockholders, except where otherwise provided by the Certificate of Incorporation or these By-laws, the holders of a majority of the issued and outstanding shares of stock of the Corporation entitled to vote at such meeting, present in person or represented by proxy, shall constitute a quorum for the transaction of business.  In the absence of a quorum a majority in interest of the stockholders present in person or represented by proxy and entitled to vote, or, in the absence of all the stockholders entitled to vote, any officer entitled to preside at, or act as secretary of, such meeting, shall have the power to adjourn the meeting from time to time, until stockholders holding the requisite amount of stock shall be present or represented.  At any such adjourned meeting at which quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally called.

SECTION 5.Organization.  At each meeting of the stockholders, one of the following shall act as chairman of the meeting and preside thereat:

(a)the Chairman;

(b)the Chief Executive Officer; or

(c)any other officer of the Corporation designated by the Chairman or the Board to act as chairman of such meeting and to preside thereat.

(d)If none of the above officers are present at the meeting then a stockholder of record shall be chosen chairman of such meeting by a majority in voting interest of the stockholders present in person or by proxy and entitled to vote thereat.

The Secretary or the person whom the chairman of such meeting shall appoint, shall act as secretary of such meeting and keep the minutes thereof.

SECTION 6.Order of Business.  The order of business at each meeting of the stockholders shall be determined by the chairman of such meeting, but such order of business may be changed by a majority in voting interest of those present in person or by proxy at such meeting and entitled to vote thereat.

SECTION 7.Voting.

(a)Except as otherwise provided by law or by the Certificate of Incorporation or these By-laws, at each meeting of the stockholders, every stockholder of the Corporation shall be entitled to one vote in person or by proxy for each share of stock of the Corporation held by him and registered in his name on the books of the Corporation:

(1)on the date fixed pursuant to Section 7 of Article VI as the record date for the determination of stockholders entitled to vote at such meeting; or

(2)if no such record date shall have been fixed, at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held.

2

(b)A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of such meeting; provided, however, that the Board may fix a new record date for the adjourned meeting.  Persons holding stock in a fiduciary capacity shall be entitled to vote the shares so held.  Persons whose stock is pledged shall be entitled to vote, unless in the transfer by the pledgor on the books of the Corporation, he has expressly empowered the pledgee to vote thereon, in which case only the pledgee or his proxy may represent such stock and vote thereon.  If shares or other securities having voting power stand in the record of two or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety or otherwise, or if two or more persons have the same fiduciary relationship respecting the same shares, unless the Secretary shall be given the written notice to the contrary and shall be furnished with a copy of the instrument or order appointing them or creating the relationship wherein it is so provided, their acts with respect to voting shall have the following effect:

(1)if only one votes, his act binds all;

(2)if more than one votes, the act of the majority so voting binds all; and

(3)if more than one votes, but the vote is evenly split on any particular matter, such shares shall be voted in the manner provided by law.

If the instrument so filed shows that any such tenancy is held in unequal interests, a majority or even-split for the purposes of this Section shall be the majority or even-split in interest.  The Corporation shall not vote directly or indirectly any share of its own capital stock.  Any vote of stock may be given by the stockholder entitled thereto in person or by his proxy appointed by an instrument in writing, subscribed by such stockholder or by his attorney thereunto authorized, delivered to the secretary of the meeting; provided, however, that no proxy shall be voted after three years from its date, unless said proxy provides for a longer period.  At all meetings of the stockholders, all matters (except where other provision is made by law, by the Certificate of Incorporation or these By-laws) shall be decided by the vote of a majority in interest of the stockholders present in person or by proxy at such meeting and entitled to vote thereon, a quorum being present.  Unless demanded by a stockholder present in person or by proxy at any meeting and entitled to vote thereon, the vote on any question need not be by ballot.  Upon a demand by any such stockholder for a vote by ballot upon any question, such vote by ballot shall be taken.  On a vote by ballot, each ballot shall be signed by the stockholder voting, or by his proxy, if there be such proxy, and shall state the number of shares voted.

SECTION 8.Inspection.  The chairman of the meeting may at any time appoint two or more inspectors to serve at any meeting of the stockholders.  Any inspector may be removed, and a new inspector or inspectors appointed, by the Board at any time.  Such inspectors shall decide upon the qualifications of voters, accept and count votes, declare the results of such vote, and subscribe and deliver to the secretary of the meeting a certificate stating the number of shares of stock issued and outstanding and entitled to vote thereon and the number of shares voted for and against the question, respectively.  The inspectors need not be stockholders of the Corporation, and any director or officer of the Corporation may be an inspector other than with respect to a vote for or against his election to any position with the Corporation or on any other matter in which he may be directly interested.  Before acting as herein provided, each inspector shall subscribe an oath faithfully to execute the duties of an inspector with strict impartiality and according to the best of his ability.

3

SECTION 9.List of Stockholders.  It shall be the duty of the Secretary or other officer of the Corporation who shall have charge of its stock ledger to prepare and make, at least 10 days before every meeting of the stockholders, a complete list of the stockholders entitled to vote thereat, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder.  Such list shall be open to the examination of any stockholder, for any purpose germane to any such meeting, during ordinary business hours, for a period of at least 10 days prior to such meeting, either at a place within the city where such meeting is to be held, which place shall be specified in the notice of the meeting or, if not so specified, at the place where the meeting is to be held.  Such list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

SECTION 10.Action Without a Meeting.  Any action required by law to be taken at any annual or special meeting of the stockholders of the Corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded.  Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested.  Every written consent shall bear the date of signature of each stockholder who signs the consent and the number of shares which the stockholder is entitled to vote.  No written consent shall be effective to take the corporation action referred to therein unless, within 60 days of the earliest date consent delivered in the manner required by law to the Corporation, written consent signed by a sufficient number of holders to take action are delivered to the Corporation by delivery to its registered office in Delaware, its principal place of business, or an officer or an agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded.  Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested.  Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE III

Board of Directors

SECTION 1.General Powers.  The business, property and affairs of the Corporation shall be managed by the Board, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by law or by the Certificate of Incorporation directed or required to be exercised or done by the stockholders.

SECTION 2.Number and Term of Office.  The number of directors shall be fixed from time to time by the whole Board.  The term “whole Board” is used herein to refer to the number of directors from time to time authorized to be on the Board regardless of the number of directors then in office.  Each director shall hold office until his successor is elected and qualified, or until his earlier death, resignation or removal in the manner hereinafter provided.

4

SECTION 3.Election of Directors.  At each meeting of the stockholders for the election of directors at which a quorum is present, the persons receiving the greatest number of votes, up to the number of directors to be elected, of the stockholders present in person or by proxy and entitled to vote thereon shall be the directors.  Unless an election by ballot shall be demanded as provided in Section 7 of Article II, election of directors may be conducted in any manner approved at such meeting.

SECTION 4.Resignation, Removal and Vacancies.  Any director may resign at any time by giving written notice or by providing notice by electronic transmission to the Board, the Chairman, the Chief Executive Officer or the Secretary.  Such resignation shall take effect at the time specified therein or, if the time be not specified, upon receipt thereof; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

Any director or the entire Board may be removed, with or without cause, at any time by vote of a majority of the shares then entitled to vote at an election of directors, or by written consent of the stockholders pursuant to Section 10 of Article II.

Vacancies occurring in the Board for any reason may be filled by vote of the stockholders or by their written consent pursuant to Section 10 of Article II or by vote of the Board or by the directors’ written consent pursuant to Section 6 of this Article.  If the number of directors then in office is less than a quorum, such other vacancies may be filled by vote of a majority of the directors then in office.

SECTION 5.Meetings.

(a)Annual Meetings.  As soon as practicable after each annual election of directors, the Board shall meet for the purpose of organization and the transaction of other business, unless it shall have transacted all such business by written consent pursuant to Section 6 of this Article.

(b)Other Meetings.  Other meetings of the Board shall be held at such times and places as the Board, the Chairman or the Chief Executive Officer shall from time to time determine.

(c)Notice of Meetings.  The Secretary shall give notice to each director of each meeting, including the time, place and purpose of such meeting.  Notice of each such meeting shall be mailed to each director, addressed to him at his residence or usual place of business, at least two days before the day on which such meeting is to be held, or shall be sent to him at such place by telegraph, cable, wireless or other form of recorded communication, or be delivered personally or by telephone not later than the day before the day on which such meeting is to be held, but notice need not be given to any director who shall attend such meeting.  A written waiver or notice, signed by the person entitled thereto, whether before or after the time of the meeting stated therein, shall be deemed equivalent to notice.

(d)Place of Meetings.  The Board may hold its meetings at such place or places within or without the State of Delaware as the Board may from time to time determine, or as shall be designated in the respective notices or waivers of notice thereof.

5

(e)Quorum and Manner of Acting.  One-third of the total number of directors then in office (but not less than two if the number of directors is greater than one) shall be present in person at any meeting of the Board in order to constitute a quorum for the transaction of business at such meeting, and the vote of a majority of those directors present at any such meeting at which a quorum is present shall be necessary for the passage of any resolution or act of the Board, except as otherwise expressly required by law or these By-laws.  In the absence of a quorum for any such meeting, a majority of the directors present thereat may adjourn such meeting from time to time until a quorum shall be present.

(f)Organization.  At each meeting of the Board, one of the following shall act as chairman of the meeting and preside, in the following order of precedence:

(1)the Chairman;

(2)the Vice Chairman, if any;

(3)the Chief Executive Officer (if a director); or

(4)any director chosen by a majority of the directors present.

The Secretary or, in the case of his absence, any person (who shall be an Assistant Secretary, if an Assistant Secretary is present) whom the Chairman shall appoint shall act as secretary of such meeting and keep the minutes thereof.

SECTION 6.Directors’ Consent in Lieu of Meeting.  Any action required or permitted to be taken at any meeting of the Board may be taken without a meeting, without prior notice and without a vote, if all members of the Board consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board.

SECTION 7.Action by Means of Conference Telephone or Similar Communications Equipment.  Any one or more members of the Board may participate in a meeting of the Board by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.

SECTION 8.Committees and Subcommittees.  The Board may, by resolution passed by a majority of the Board or in the manner set forth in Section 6, designate an Executive Committee, an Audit Committee, a Compensation and Stock Committee and such other committees as it deems appropriate.  Each committee shall consist of one or more of the directors of the Corporation.  The Board may designate one or more of the directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.  In the absence or disqualification of a member of the committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he, she, or they constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in place of any such absent or disqualified member.  Any such committee, to the extent provided in the resolution of the Board, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power to amend the certificate of incorporation (except that a committee may, to

6

the extent authorized in the resolution providing for the issuance of shares of stock adopted by the Board as provided in Section 151(a) of the DGCL, fix the designations and any of the preferences or rights of such shares relating to dividends, redemption, dissolution, any distribution of assets of the Corporation or the conversion into, or exchange of such shares for, shares of any other class or classes or any other series of the same or any other class or classes of stock of the Corporation or fix the number of shares of any series of stock or authorize the increase or decrease of the shares of any series), adopt an agreement of merger or consolidation under section 251 or 252 of the DGCL, recommend to the stockholders the sale, lease, or exchange of all or substantially all of the Corporation’s property and assets, recommend to the stockholders a dissolution of the Corporation or a revocation of a dissolution, or amend these By-laws.  The Executive Committee and the Compensation and Stock Committee of the Corporation shall each have the power and authority to declare a dividend and to authorize the issuance of stock.  Unless otherwise provided in the resolution of the Board designating the committee, a committee may create one or more subcommittees, each subcommittee to consist of one or more members of the committee, and delegate to a subcommittee any or all of the powers and authority of the committee.

ARTICLE IV

Officers

SECTION 1.Officers.  The executive officers of the Corporation shall be its Chief Executive Officer and such other executive officers as the Board (or a duly authorized committee of the Board) may deem necessary from time to time.  In addition, the Corporation shall have a Secretary, a Treasurer and such other officers as the Board (or a duly authorized committee of the Board) may deem necessary from time to time consistent with the responsibilities set forth in this Article IV for certain specified officers or as otherwise determined appropriate by the Board.  Any two or more offices may be held by the same person.

SECTION 2.Authority and Duties.  All officers, as between themselves and the Corporation, shall have such authority and perform such duties in the management of the Corporation as may be provided in these By-laws or, to the extent so provided, by the Board.

SECTION 3.Other Officers.  The Corporation may have such other officers, agents and employees as the Board may deem necessary, including one or more Vice Presidents, one or more Assistant Secretaries and one or more Assistant Treasurers, each of whom shall hold office for such period, have such authority, and perform such duties as the Board, the Chairman or the Chief Executive Officer may from time to time determine.  The Board may delegate to any executive officer the power to appoint or remove any such officers, agents or employees.  Any two or more offices may be held by the same person.

SECTION 4.Term of Office, Resignation and Removal.  All executive officers shall be elected or appointed by the Board and shall hold office for such term as may be prescribed by the Board.  Each executive officer shall hold office until his successor has been elected or appointed and qualified or his earlier death, resignation or removal in the manner hereinafter provided.  The Board may require any officer to give security for the faithful performance of his duties.

Any executive officer may resign at any time by giving written notice to the Board or to the Chairman, the Chief Executive Officer or the Secretary, and such resignation shall take effect at the time specified therein or, if the time when it shall become effective is not

7

specified therein, at the time it is accepted by action of the Board.  Except as aforesaid, the acceptance of such resignation shall not be necessary to make it effective.

All officers and agents elected or appointed by the Board (or by an executive officer to whom such power was delegated in accordance with Section 3) shall be subject to removal at any time by the Board or by the stockholders of the Corporation with or without cause.

SECTION 5.Vacancies.  If the office of Chief Executive Officer, President, Chief Financial Officer, Secretary or Treasurer becomes vacant for any reason, the Board shall fill such vacancy, and if any other office becomes vacant, the Board may fill such vacancy.  Any officer so appointed or elected by the Board shall serve only until such time as the unexpired term of his predecessor shall have expired unless reelected or reappointed by the Board.

SECTION 6.Chairman of the Board.  The Chairman of the Board shall preside at meetings of the Board at which he is present or delegate such authority to another member of the Board, and shall give counsel and advise to the Board and the officers of the Corporation on all subjects concerning the welfare of the Corporation and the conduct of its business.  He shall perform such other duties as the Board may from time to time determine.

SECTION 7.Chief Executive Officer.  The Chief Executive Officer of the Corporation shall perform all duties and exercise all powers usually pertaining to the office of a chief executive officer of a corporation. He shall have general and active management and control of the business, policies, operations and affairs of the Corporation subject to the control of the Board, see that all orders and resolutions of the Board are carried into effect, and have such other powers and perform such other duties as may be prescribed by these By-laws or from time to time by the Board.

SECTION 8.President.  The President of the Corporation shall assist the Chief Executive Officer in the general and active management of the business of the Corporation, see that all orders and resolutions of the Board are carried into effect, and have such other powers and perform such other duties as may be prescribed by these By-laws or from time to time by the Board or the Chief Executive Officer.

SECTION 9.Chief Financial Officer.  The Chief Financial Officer shall perform such duties and shall have such powers as the Board, the Chief Executive Officer or the President may from time to time prescribe.  The Chief Financial Officer shall keep and maintain or cause to be kept and maintained adequate and correct books and records of account of the business transactions of the Corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, retained earnings and shares.  The Chief Financial Officer shall make proper accounts of such funds, and render as required by the Board such account of all such transactions and of the financial condition of the Corporation.  The books of all accounts shall at all reasonable times be open to inspection by any director.  The Chief Financial Officer shall be empowered, from time to time, to require from the officers or agents of the Corporation reports or statements giving such information as he may desire with respect to any and all financial transactions of the Corporation.

8

SECTION 10.Secretary.  The Secretary shall, to the extent practicable, attend all meetings of the Board and all meetings of the stockholders and shall record all votes and the minutes of all proceedings in a book to be kept for that purpose.  He shall give, or cause to be given, notice of all meetings of the stockholders and of the Board, and shall perform such other duties as may be prescribed by the Board, the Chairman, the Chief Executive Officer or the President, under whose supervision he shall act.  He shall keep in safe custody the seal of the Corporation and affix the same to any duly authorized instrument requiring it and, when so affixed, it shall be attested by his signature or by the signature of the Treasurer or if appointed, an Assistant Secretary or an Assistant Treasurer.  He shall keep in safe custody the certificate books and stockholder records and such other books and records as the Board may direct and shall perform all other duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the Chairman, the Chief Executive Officer, the President or the Board.

SECTION 11.Treasurer.  The Treasurer shall have the care and custody of the corporate funds and other valuable effects, including securities, and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation, and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board.  The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board, taking proper vouchers for such disbursements, and shall render to the Chairman, the Chief Executive Officer, the President, the Chief Financial Officer and any directors, at the regular meetings of the Board, or whenever they may require it, an account of all his transactions as Treasurer and of the financial condition of the Corporation; and, in general, perform all the duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him by the Chairman, the Chief Executive Officer, the President, the Chief Financial Officer or the Board.

ARTICLE V

General Provisions

SECTION 1.Execution of Documents.  All checks and drafts on the Corporation’s bank accounts and all bills of exchange and promissory notes, and all acceptances, obligations, bonds and other orders or instruments for the payment of money, shall be signed by such officer, employee or agent, as shall be authorized from time to time by the Board.  The Board may, in its discretion, also provide for the countersignature or registration of any or all such orders, instruments or obligations for the payment of money.  Any officer having the power to sign certificates, contracts, obligations and other instruments of the Corporation may delegate such power to any other officer or employee of the Corporation, provided that the delegating officer shall be accountable for the actions of that officer or employee to whom power was delegated.

SECTION 2.Deposits.  All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation or otherwise as the Board or Treasurer, or any other officer of the Corporation to whom power in this respect shall have been given by the Board, shall select.

SECTION 3.Proxies in Respect of Stock or Other Securities of Other Corporations.  The Board shall designate the officers of the Corporation who shall have authority from time to time to appoint an agent or agents of the Corporation to exercise in the name and on behalf of the Corporation the powers and rights which the Corporation may have as the holder of

9

stock or other securities in any other corporation, and to vote or consent in respect of such stock or securities.  Such designated officers may instruct the person or persons so appointed as to the manner of exercising such powers and rights, and such designated officers may execute or cause to be executed in the name and on behalf of the Corporation and under its corporate seal, or otherwise, such written proxies, powers of attorney or other instruments as they may deem necessary or proper in order that the Corporation may exercise its said powers and rights.

SECTION 4.Evidence of Authority.  A certificate by the Secretary as to any action taken by the stockholders, directors, a committee or any officer or representative of the Corporation, shall as to all persons who rely on the certificate in good faith be conclusive evidence of such actions.

SECTION 5.Severability.  Any determination that any provision of these By-laws is for any reason inapplicable, illegal or ineffective shall not affect or invalidate any other provision of these By-laws.

SECTION 6.Facsimile Signatures; Electronic Transmission.  Facsimile signatures and submission of documents by electronic transmission of any directors or officers of the Corporation may be used to the extent permissible under applicable law whenever and as authorized by the Board or a committee thereof.

SECTION 7.Rules of Construction.  Except where the context otherwise requires, wherever used in these By-laws, the singular will include the plural, the plural the singular, the use of any gender will be applicable to both genders and the word “or” is used in the inclusive sense (and/or).  The captions of these By-laws are for convenience of reference only and in no way define, describe, extend or limit the scope or intent of these By-laws or the intent of any provision contained in these By-laws.  The term “including” as used in these By-laws means including, without limiting the generality of any description preceding the term.  References to “Article” or “Articles” are references to the numbered Articles of these By-laws and references to “Section” or “Sections” are references to Sections in the Article in which the referenced Section is located, in either case unless expressly stated otherwise.

ARTICLE VI

Capital Stock

SECTION 1.Certificates for Shares.  Every owner of stock of the Corporation shall be entitled to have a certificate certifying the number and class of shares owned by him in the Corporation, which shall otherwise be in such form as shall be prescribed by the Board.  Certificates shall be issued in consecutive order and shall be numbered in the order of their issue, and shall be signed by, or in the name of, the Corporation by the Chairman, the President or any Vice President and by the Treasurer (or an Assistant Treasurer, if appointed) or the Secretary (or an Assistant Secretary, if appointed).  In case any officer or officers who shall have signed any such certificate or certificates shall cease to be such officer or officers of the Corporation, whether because of death, resignation or otherwise, before such certificate or certificates shall have been delivered by the Corporation, such certificate or certificates may nevertheless be adopted by the Corporation and be issued and delivered as though the person or persons who signed such certificate had not ceased to be such officer or officers of the Corporation.

SECTION 2.Registered Stockholders.  The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive

10

dividends, to receive notifications, to vote as such owner, and to exercise all the rights and powers of an owner; and the Corporation shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of the State of Delaware.

SECTION 3.Transfer and Registration of Stock.

(a)The transfer of stock and certificates of stock which represent the stock of the Corporation shall be governed by Article 8 of Subtitle 1 of Title 6 of the Delaware Code (the Uniform Commercial Code), as amended from time to time.

(b)Registration of transfers of shares of the Corporation shall be made only on the books of the Corporation upon request of the registered holder thereof, or of his attorney thereunto authorized by power of attorney duly executed and filed with the Secretary of the Corporation, and upon the surrender of the certificate or certificates for such shares properly endorsed or accompanied by a stock power duly executed.

SECTION 4.Addresses of Stockholders.  Each stockholder shall designate to the Secretary an address at which notices of meetings and all other corporate notices may be served or mailed to him, and, if any stockholder shall fail to designate such address, corporate notices may be served upon him by mail directed to him at his post office address, if any, as the same appears on the share record books of the Corporation or at his last known post office address.  In addition, stockholders may designate to the Secretary appropriate information for the receipt of electronic transmissions in such formats as may be prescribed by the Secretary from time to time, but in no event will the Corporation be required to deliver information by electronic transmission.

SECTION 5.Lost, Destroyed and Mutilated Certificates.  The holder of any shares of the Corporation shall immediately notify the Corporation of any loss, destruction or mutilation of the certificate therefor, and the Board may, in its discretion, cause to be issued to him a new certificate or certificates for shares, upon the surrender of the mutilated certificates or, in the case of loss or destruction of the certificate, upon satisfactory proof of such loss or destruction, and the Board may, in its discretion, require the owner of the lost or destroyed certificate or his legal representative to give the Corporation a bond in such sum and with such surety or sureties as it may direct to indemnify the Corporation against any claim that may be made against it on account of the alleged loss or destruction of any such certificate.

SECTION 6.Regulations.  The Board may make such rules and regulations as it may deem expedient, not inconsistent with these By-laws, concerning the issue, transfer and registration of certificates for stock of the Corporation.

SECTION 7.Fixing Date for Determination of Stockholders of Record.  In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may fix, in advance, a record date, which shall not be more than 60 nor less than 10 days before the date of such meeting, nor more than 60 days prior to any other action.  A determination of stockholders entitled to notice of or to vote at a meeting of the stockholders shall apply to any adjournment of

11

the meeting; provided, however, that the Board may fix a new record date for the adjourned meeting.

ARTICLE VII

Seal

The Board may provide a corporate seal, which shall be in the form of a circle and shall bear the full name of the Corporation and the words and figures “Corporate Seal Delaware.”

ARTICLE VIII

Fiscal Year

The fiscal year of the Corporation shall be determined by the Board.

ARTICLE IX

Indemnification and Insurance

SECTION 1.Nature of the Indemnity.

(a)Acting, Suits or Proceedings Other Than Those By or In the Right of the Corporation.  The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that he is or was or has agreed to become a director or officer of the Corporation, or any such director or officer who is or was serving or has agreed to serve at the request of the Corporation as director or officer of another corporation, partnership, joint venture, trust or other enterprise, or by reason of any action alleged to have been taken or omitted in such capacity, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf.  In connection with such action, suit or proceeding and any appeal therefrom, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding had no reasonable cause to believe his conduct was unlawful.  The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.

(b)Actions, Suits or Proceedings By or In the Right of the Corporation.  The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was or has agreed to become a director or officer of the Corporation or any such director or officer who is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or

12

settlement of such action or suit, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Delaware Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Delaware Court of Chancery or such other court shall deem proper.

SECTION 2.Successful Defense.  To the extent that a director or officer of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Section 1 of this Article IX or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection therewith.

SECTION 3.Determination That Indemnification Is Proper.  Any indemnification of a director or officer of the Corporation under Section 1 of this Article IX (unless ordered by a court) shall be made by the Corporation upon a determination that indemnification of the director or officer is proper in the circumstances as set forth in Section 1 of this Article IX.  Any such determination shall be made (1) by the Board by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (2) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (3) by the stockholders.

SECTION 4.Advance Payment of Expenses.  Expenses incurred by a director or officer in defending a civil or criminal action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding; provided, that any such advance shall be conditioned upon the Corporation’s receipt of an undertaking by or on behalf of the director or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation as authorized in this Article IX.

SECTION 5.Procedure for Indemnification of Directors and Officers.  Any indemnification of a director or officer of the Corporation under Section 1 and 2 or advance of costs, charges and expenses to a director or officer under Section 4 of this Article IX, shall be made promptly, and in any event within thirty (30) days, upon the written request of the director or officer.  If a determination by the Corporation that the director or officer is entitled to indemnification pursuant to this Article IX is required, and the Corporation fails to respond within sixty (60) days to a written request for indemnity, the Corporation shall be deemed to have approved such request.  If the Corporation denies a written request for indemnity or advancement of expense, in whole or in part, or if payment in full pursuant to such request is not made within sixty (60) days the right to indemnification or advances as granted by this Article IX shall be enforceable by the director or officer in any court of competent jurisdiction.  Such person’s costs and expenses incurred in connection with successfully establishing his right to indemnification, in whole or in part, in any such action shall also be indemnified by the Corporation.  It shall be a defense to any such action (other than an action brought to enforce a claim for the advance of costs, charges and expenses under Section 4 of this Article IX where the required undertaking, if any, has been received by the Corporation) that the claimant has not met the standard of conduct set forth in Section 1 of this Article IX, but the burden of proving such defense shall be on the Corporation.  Neither the failure of the Corporation (including its Board, its independent legal counsel, and its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he has met the

13

applicable standard of conduct set forth in Section 1 of this Article IX, nor the fact that there has been an actual determination by the Corporation (including its Board, its independent legal counsel, and its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct.

SECTION 6.Survival; Preservation of Other Rights.  The foregoing indemnification provisions shall be deemed to be a contract between the Corporation and each director or officer who serves in any such capacity at any time while these provisions as well as the relevant provisions of the DGCL are in effect and any repeal or modification thereof shall not affect any right or obligation then existing with respect to any state of facts existing prior to or at the time of such repeal or modification or any action, suit, or proceeding previously or thereafter brought or threatened based in whole or in part upon any such state of facts.  Such a “contract right” may not be modified retroactively without the consent of such director or officer.

The indemnification provided by this Article IX will not be deemed exclusive of any other rights to which those indemnified may be entitled under any other By-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action by the person being indemnified in his official capacity and as to action in any other capacity while holding such office, and shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person.  The Corporation may enter into a separate written agreement with any director, officer, employee or agent of the Corporation that expressly provides for indemnification and reimbursement of such person to the full extent permitted by this Article IX, on the same terms and conditions provided herein.

SECTION 7.Insurance.  The Corporation may purchase and maintain insurance on behalf of any person who is or was or has agreed to become a director or officer of the Corporation, or any such director or officer who is or was serving at the request of the Corporation as director or officer of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him or on his behalf in any such capacity, or arising out of his status as such, whether or not the Corporation should have the power to indemnify him against such liability under the provisions of this Article IX.

SECTION 8.Severability.  If this Article IX or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each director or officer of the Corporation as to costs, charges and expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Corporation, to the fullest extent permitted by any applicable portion of this Article IX that shall not have been invalidated and to the fullest extent permitted by applicable law.

SECTION 9.Subsidiaries.  Any person serving as a director or officer of a subsidiary of the Corporation shall be deemed for all purposes of this Article IX to be so serving “at the request of the Corporation” and, accordingly, shall be entitled to all of the indemnification rights provided by this Article IX to persons who serve “at the request of the Corporation as director or officer of another corporation.”

14

ARTICLE X

Amendments

Any by-law (including these By-laws) may be adopted, amended or repealed by the vote of the holders of a majority of the shares then entitled to vote at an election of directors or by consent of the stockholders pursuant to Section 10 of Article II, or by vote of the Board or by the directors’ written consent pursuant to Section 6 of Article III.

15

EX-10.1

Exhibit 10.1

PATENT LICENCE AGREEMENT

(ADAIR PATENT RIGHTS)

(MEDI-493)

between

CELLTECH THERAPEUTICS LIMITED

and

MEDIMMUNE INC.

THIS AGREEMENT is made the 19 day of January 1998

BETWEEN

1.CELLTECH THERAPEUTICS LIMITED (registered in England No. 1472269) whose principal place of business is at 216 Bath Road, Slough, Berkshire SL1 4EN, England (“Celltech”); and

2.MEDIMMUNE INC. of 35 West Watkins Mill Road, Gaithersburg, MD  20878, USA (“Licensee”).

WHEREAS

A.Celltech claims John Robert Adair, Diljeet Singh Athwal and John Spencer Emtage whilst employees of Celltech in or about December 1989 developed certain processes and products in the field of genetic engineering of monoclonal antibodies which are the subject of the Adair Patent Rights, and

B.Celltech has filed and prosecuted patent applications and/or been granted patents in the Patent Offices of the United Kingdom and elsewhere in respect of such processes and products, and

C.Celltech wishes to grant and the Licensee wishes to accept a licence under the Adair Patent Rights on the terms set out below.

NOW IT IS HEREBY AGREED as follows:

1.DEFINITIONS

In this Agreement the following words and phrases shall have the following meanings unless the context otherwise requires:

1.1	“Adair Patent Rights”	shall mean the Patent Rights short particulars of which are set out in Schedule 1 hereto and sometimes referred to collectively or individually as “the Adair Patent”.
1.2	“Affiliate”	shall mean any company, partnership or other entity which directly or indirectly Controls, is Controlled by or is under common Control with the relevant party to this Agreement.
1.3	“Control”	shall mean ownership of more than 50%of the issued share capital or the legal power to direct or cause the direction of the general management and policies of the party in question.
1.4	“Commencement Date”	shall mean the date hereof;

1.5	“Field”	shall mean the field of human therapy and prophylaxis.
1.6	“Net Receipts”	shall mean all monies received by or on behalf of the Licensee or by or on behalf of its sub-licensees in respect of the sale of Product(s), less the following items to the extent that they are paid or allowed and included in the invoice price:
		i)normal discounts actually granted;
		ii)credits allowed for Products returned or not accepted by customers: disallowed reimbursements;
		iii)packaging, transportation and pre-paid insurance charges on shipments or deliveries to customers;
		iv)sales, customs, and excise taxes actually incurred and paid by the Licensee or its sub-licensees in connection with the sale or delivery of Product to customers.
		Upon any sale or other disposal of Product by or on behalf of Licensee or its sub-licensee other than a bona fide arms length transaction exclusively for money or upon any disposal of the Product for purposes which do not result in a disposal of such Product in consideration of sales revenue customary in the country of use, such sale, other disposal or use shall be deemed to constitute a sale at the then current maximum selling price in the country in which such sale, other disposal or use occurs.
		For the avoidance of doubt, the supply of Product free of charge for use in clinical studies or to third parties for research evaluation purposes shall not be included in this provision.
1.7	“Patent Rights”	shall mean patent applications or patents, inventor certificates, utility certificates, improvement patents and models and certificates of addition and includes any divisions, renewals, continuations, extensions or re-issues thereof anywhere in the Territory and supplementary protection certificates.

3

1.8	“Product”	shall mean antibodies or fragments thereof or any formulation containing the same of which the Licensee is the proprietor or is otherwise licensed to develop, make, have made, use or sell, and which bind to the respiratory syncitical virus (MEDI-493).
1.9	“Territory”	shall mean worldwide.
1.10	“Valid Claim”	shall mean a claim of an issued, unexpired patent included within the Adair Patent Rights which has not been held invalid or unenforceable in an unappealed or unappealable decision of a court or competent body having jurisdiction thereof.

2.GRANT OF RIGHTS

2.1Celltech hereby grants to the Licensee with effect from the Commencement Date a non-exclusive licence under the Adair Patent Rights to develop, make, have made, use and sell Products in the Field and Territory;

2.2Licensee shall be entitled to sublicense the rights granted in clause 2.1 on terms which are subject and subordinate to the terms of this Agreement and at least 14 days prior to the execution of any sublicence, Licensee shall give written notice to Celltech of the identity of the sublicensee together with details of the antibody covered by the sublicence and Licensee shall provide Celltech with a redacted copy (excluding financial and other relevant terms) of any sub-licence granted pursuant to this Clause 2.2 promptly after its execution.

3.PAYMENT

3.1In consideration of the Licences granted in clause 2 the Licensee shall pay to Celltech an initial sum of [***] against Celltech’s invoice to be issued on the Commencement Date.

3.2In further consideration of the licenses granted in Clause 2 the Licensee shall pay to Celltech annually upon each anniversary of the Commencement Date [****] which amount may be offset in each year up to a maximum of [***] against up to half the amount of any royalties payable under Clause 3.3 by the Licensee in the same year.

3.3In further consideration of the licences granted in Clause 2 the Licensee shall pay to Celltech a royalty at the rate of [***] of Net Receipts from all Products sold where the manufacture or sale of the Product in a country of the Territory would, but for the licence granted hereby, infringe a Valid Claim.

3.4Payments due under Clause 3.3 shall be made within 30 days of the end of each calendar quarter in respect of royalties accruing on Net Receipts during that

4

calendar quarter.  Payments due under Clause 3.2 shall be made within 30 days of each anniversary of the Commencement Date.

3.5All payments due under this Agreement:

3.5.1are exclusive of any Value Added Tax or similar tax which shall be payable in addition by the Licensee.

3.5.2shall be made in pounds sterling or to the credit of a bank account to be designated in writing by Celltech.  Payments due to Celltech in a currency other than pounds sterling shall first be calculated in the relevant foreign currency and then converted to pounds sterling at the rate of exchange of the currency in the country in which such payments fall due, as determined by the Financial Times Spot Rate for the pound in London first published on the day after the last business day of the calendar quarter in respect of which the royalties are payable.

3.5.3shall be made in full without set-off and free and clear of and without any deduction or withholding for or on account of taxes, duties, levies, imposts, fees or charges and other duties that may be imposed by or under the authority of any government or public authority as far as is legally possible save with regard to withholding tax.  Where any sum due to be paid to Celltech hereunder is subject to any withholding or similar tax the parties shall take all reasonable steps to do all such acts and things and to sign all such deeds and documents as will enable them to take advantage of any applicable double taxation agreements with the object of paying the sums due to Celltech and on a gross basis.  In the event there is no applicable double taxation agreement the Licensee shall pay such withholding or similar tax, deduct the relevant amount from the payment due to Celltech, and secure and send to Celltech proof of such withholding or similar tax in a form satisfactory to Celltech as evidence of such payment.

3.6Where Celltech does not receive payment of any sums due to it within the period specified hereunder in respect thereof interest shall accrue on the sum outstanding at the rate of 2% above the “Base Rate” from time to time of Midland Bank Plc calculated on a daily basis without prejudice to Celltech’s right to receive payment on the due date therefor.

3.7If restrictions on the transfer of currency exist in any country of the Territory such as to prevent the Licensee from making payments in the United Kingdom, the Licensee shall take all reasonable steps to obtain a waiver of such restrictions or otherwise enable the Licensee to make such payments failing which the Licensee may make the royalty payments due upon sales in such country in local currency and deposit such payments in a local bank or other depository designated by Celltech.

5

4.RECORDS AND STATEMENTS

4.1The Licensee agrees to keep true and accurate records and books of account containing all data necessary for the calculation of the royalties payable to Celltech under clause 3.3.  At Celltech’s request and expense the Licensee shall permit a representative of a firm of independent accountants, appointed by Celltech and acceptable to the Licensee (such acceptance not to be unreasonably withheld or delayed), upon reasonable notice and at reasonable times, to inspect such books and records for the purposes of verifying the royalties payable to Celltech by the Licensee.  If the royalties are found to be in error such that royalties were underpaid, then the Licensee shall promptly make good any deficiency including making payments of interest on outstanding sums in accordance with the current rate subsisting pursuant to clause 3.6 and if any deficiency of 5% or more is found to have arisen the costs of the said inspection shall be borne by the Licensee.

4.2The Licensee shall prepare a statement in respect of each calendar quarter of this Agreement which shall show for the calendar quarter in question the Net Receipts of sales by it or any sub-licensee of Products on a country by country basis, details of the quantities of Products manufactured and/or sold in each country in respect of which there are Adair Patent Rights licensed under this Agreement and the royalty and VAT due to Celltech thereon pursuant to clause 3 above.  Such statement shall be submitted to Celltech within 30 days of the end of each calendar quarter to which it relates together with a remittance for the royalties due to Celltech.  Celltech shall simultaneously raise and send a VAT invoice to the Licensee.  If Celltech shall give notice to the Licensee within ninety (90) days of the receipt of any such statement that it does not accept such statement, the statement shall be certified by a firm of independent accountants appointed and paid for by Celltech and acceptable to Licensee (such acceptance not to be unreasonably withheld or delayed).  The Licensee shall make available all books and records necessary for the purpose of such clarification.  Following any such clarification the parties shall make any adjustments necessary in respect of royalties already paid to Celltech in relation to the period in question.

5.PATENT PROSECUTION AND MAINTENANCE

5.1Celltech hereby undertakes that at its own expense it will:

5.1.1prosecute such of the Adair Patent Rights which are patent applications diligently to grant so as to secure the broadest protection obtainable so far as it is reasonable to do so with particular reference to Celltech’s commercial considerations; and

5.1.2pay all renewal fees for the Adair Patent Rights for the full term thereof so far as it is reasonable to do so with particular reference to Celltech’s commercial considerations.

6

6.THIRD PARTY PATENTS AND INFRINGEMENTS

6.1The Licensee shall promptly notify Celltech in writing of any infringement or threatened infringement or improper or unlawful use of or of any challenge to the validity of the Adair Patent Rights of which it is or becomes aware and shall provide Celltech with evidence thereof.

6.2With respect to Adair Patent Rights as licensed herein Celltech undertakes and agrees to take all such steps and proceedings and to do all such other acts and things as may in Celltech’s sole discretion be necessary to restrain any infringement or improper or unlawful use of or to defend any challenge to the validity of the Adair Patent Rights in the Territory and the Licensee shall permit Celltech to have the sole conduct of any such steps and proceedings including the right to settle them whether or not the Licensee is a party to them.  Licensee hereby agrees to cooperate fully with Celltech at Licensee’s own cost and expense to the extent such cost and expense is reasonable lending its name to the proceedings as may be necessary.  Celltech shall be entitled to retain any and all monies received from such proceedings subject to the Licensee being entitled to recover those expenses incurred by the Licensee.

7.LIABILITY

7.1Celltech gives no representation or warranty that the Adair Patent Rights which are patent applications will be granted or if granted will be valid nor that the exercise of the rights granted to the Licensee hereunder will not infringe the Patent Rights or other intellectual property rights vested in Celltech or in any third party.

7.2The Licensee hereby undertakes and agrees to be solely responsible at its own cost and expense for dealing with and for any liability, loss, damage, cost or expense arising from any contractual tortious or other claims or proceedings by third parties concerning the development, manufacture, marketing or sale of Products and in particular product liability claims or proceedings and shall promptly indemnify Celltech against all such liability, loss, damage, cost or expense.

7.3No rights are granted save for those expressly granted herein and no rights shall arise by implication, estoppel or otherwise, and the Licensee acknowledges that it must satisfy itself as to the need for licenses under intellectual property rights vested in Celltech (other than Adair Patent Rights) and in any third parties in order to exploit the rights granted herein.

7.4The obligations of the Licensee under this clause 7 shall survive the termination of this Agreement for whatever reason.

8.SECURITY/CONFIDENTIALITY

8.1Both parties undertake and agree not at any time for any reason whatsoever to disclose or permit to be disclosed to any third party or make use of or permit to be

7

made use of any trade secrets or confidential information relating to the business affairs or finances of the other which comes into their possession pursuant to this Agreement save as may be expressly permitted hereunder and then only having imposed corresponding obligations of confidence upon the recipient.

8.2The obligations of confidence referred to in this clause 8 shall not extend to any information which:

8.2.1is or shall become generally available to the public otherwise than by reason of a breach by the recipient party of the provisions of this clause 8;

8.2.2is known to the recipient party and is at its free disposal prior to its receipt from the other;

8.2.3is subsequently disclosed to the recipient party without obligations of confidence by a third party owing no such obligations in respect thereof.

8.2.4is required to be disclosed by order of a court or governmental agency or authority or for regulatory purposes or to meet the requirements of any Stock Exchange to which the parties may be subject provided that the party making such disclosure shall without delay notify the other party in writing of such requirement to make disclosure and shall not make such disclosure prior to such notification to the other party.

8.3The obligations of each party under this clause 8 shall survive the termination of this Agreement for whatever reason.

8.4Notwithstanding the foregoing, Licensee may provide confidential information to its sub-licensees, contract manufacturers of Product, marketing and distribution partners for Product always provided that such sub-Licensees, contract manufacturers and partners are bound by obligations of confidentiality and limited use equivalent to those of Licensee herein.

9.TERM

9.1Subject to the provisions for earlier termination contained herein, this Agreement shall commence on the Commencement Date and shall continue until expiry of the last to expire of the Adair Patent Rights.

10.TERMINATION

10.1Subject to the provisions of clause 11.3:

10.1.1Either Celltech or the Licensee may terminate this Agreement immediately by notice in writing to the other if the other party commits a breach of this Agreement which in the case of a breach capable of remedy shall not have been remedied by such other party within 30 days of the receipt by the other of a notice identifying the breach and requiring its remedy; or

8

10.1.2Intentionally omitted.

10.2Licensee shall have the right to terminate the Agreement at any time by thirty (30) days prior written notice to Celltech.

11.CONSEQUENCES OF TERMINATION

11.1If this Agreement is terminated for any reason, any and all licences granted hereunder shall terminate with effect from the date of termination.

11.2If this Agreement is terminated, any sub-licensees of the Licencee may request, and if requested and if Celltech agrees, obtain its own licence under the Adair Patent Rights for Product in the Field directly with Celltech on the same terms and conditions as herein contained.

11.3Termination of this Agreement for whatever reason or expiration of this Agreement shall not affect the accrued rights of the parties arising in any way out of this Agreement as at the date of termination and in particular but without limitation the right to recover damages against the other and all provisions which are expressed to survive this Agreement shall remain in full force and effect.

12.ASSIGNMENT

12.1Subject to the provisions of clause 12.2 below and save as otherwise provided herein neither party shall assign, transfer, charge, sub-contract or in any other manner make over to any third party the benefit and/or burden of this Agreement without the prior written consent of the other which consent shall not be unreasonably withheld or delayed.

12.2Celltech shall be entitled without the prior written consent of the Licensee to assign, transfer, charge or in any manner make over the benefit and/or burden of this Agreement to an Affiliate or to any 50/50 joint venture company where it is the beneficial owner of 50% of the issued share capital thereof or to any company with which it may merge or to any company to which it may transfer substantially all of its assets and undertaking.

12.3This Agreement shall be binding upon the successors and assigns of the parties hereto and the name of a party appearing herein shall be deemed to include the names of its successors and assigns provided always that nothing herein shall permit any assignment by either party except as expressly provided herein.

13.GOVERNING LAW AND JURISDICTION

13.1The validity, construction and performance of this Agreement shall be governed by English law.

13.2All disputes, claims or proceedings between the parties relating to the validity, construction or performance of this Agreement shall be subject to the jurisdiction

9

of the laws of England to the jurisdiction of whose courts the parties hereto submit.  Each of the parties consents to the award or grant of any relief in any such proceedings before the High Court of Justice in England.  Either party shall have the right to take proceedings in any other jurisdiction for the purposes of enforcing a judgement or order obtained from a Court of Justice in England.

14.FORCE MAJEURE

14.1Neither party shall be in breach of this Agreement if there is any total or partial failure of performance by it of its duties and obligations under this Agreement occasioned by any act of God, fire, earthquake, act of government or state, war, civil commotion, insurrection, embargo, prevention from or hindrance in obtaining any raw materials, energy or other supplies, labour disputes of whatever nature and any other reason beyond the control of either party.  If either party is unable to perform its duties and obligations under this Agreement as a direct result of the effect of one of such reasons, such party shall give written notice to the other of such inability stating the reason in question.  The operation of this Agreement shall be suspended during the period (and only during the period) in which the reason continues.  Forthwith upon the reason ceasing to exist the party relying upon it shall give written advice to the other of this fact.  If the reason continues for a period of more than 90 days and substantially affects the commercial basis of this Agreement, the party not claiming under this clause 14 shall have the right to terminate this Agreement upon giving 60 days written notice of such termination to the other party.

15.ILLEGALITY

15.1If any provision or term of this Agreement or any part thereof shall become or be declared illegal, invalid or unenforceable for any reason whatsoever, including but without limitation by reason of the provisions of any legislation or other provisions having the force of law or by reason of any decision of any Court or other body or authority having jurisdiction over the parties hereto or this Agreement including the EC Commission or the European Court of Justice, such terms or provisions shall be divisible from this Agreement and shall be deemed to be deleted from this Agreement in the jurisdiction in question provided always that if any such deletion substantially affects or alters the commercial basis of this Agreement either party shall have the right to terminate this Agreement upon giving 60 days written notice of such termination to the other party.

16.ENTIRE AGREEMENT/AMENDMENT/WAIVER/PRESS RELEASES/COSTS

16.1This Agreement embodies and sets forth the entire agreement and understanding of the parties and supersedes all prior oral or written agreements, understandings or arrangements relating to the subject matter of this Agreement.  Neither party shall be entitled to rely on any agreement, understanding or arrangement which is not expressly set forth in this Agreement.

10

16.2This Agreement shall not be amended, modified, varied or supplemented except in writing signed by duly authorised representatives of the parties.

16.3No failure or delay on the part of either party hereto to exercise any right or remedy under this Agreement shall be construed or operated as a waiver thereof nor shall any single or partial exercise of any right or remedy under this Agreement preclude the exercise of any other right or remedy or preclude the further exercise of such right or remedy as the case may be.  The rights and remedies provided in this Agreement are cumulative and are not exclusive of any rights or remedies provided by law.

16.4The text of any press release or other communication to be published by or in the media concerning the subject matter of this Agreement shall require the approval of each party hereto.

16.5Each of the parties hereto shall be responsible for its respective legal and other costs incurred in relation to the preparation of this Agreement.

17.NOTICE

17.1Any notice, report or other document required or permitted to be given under this Agreement shall be in writing and shall be delivered in person, by courier, by mail or by facsimile and confirmed by mail, to the address stated below and shall be effective three (3) business days after despatch by express courier or such mailing:

If to Celltech:	Celltech Therapeutics Ltd
	216 Bath Road
	Slough
	Berkshire
	SL 1 4EN, England
	Facsimile: 01753 536632
	Attention: Company Secretary
If to Licensee:	MedImmune Inc.
	35 West Watkins Mill Road
	Gaithersburg MD 20878
	USA
	Facsimile: 001 301 527 4201
	Attention: President

or at such other address as Celltech or the Licensee may furnish from time to time to the other in writing.

11

17.2All such notices and documents shall be in the English language.  To prove the giving of a notice or other document it shall be sufficient to show that it was despatched.

18.INTERPRETATION

18.1The headings in this Agreement are inserted only for convenience and shall not affect the construction hereof.

18.2Where appropriate, words denoting a singular number only shall include the plural and vice versa.

18.3Reference to any statute or statutory provision includes a reference to the statute or statutory provision as from time to time amended, extended or re-enacted.

IN WITNESS whereof, duly authorised officers of the parties hereto have set their hands the year first above written.

SIGNED by	)	/s/
for and on behalf of	)
CELLTECH THERAPEUTICS LIMITED	)	/s/
	Title
SIGNED by	)	/s/
for and on behalf of	)
MEDIMMUNE INC.	)	/s/
	Title

12

SCHEDULE 1

ADAIR PATENT RIGHTS

SCHEDULE 1

Celltech Ref. No.:	PA 259
Title:	Humanised Antibodies
Subject Matter:	Recombinant human antibodies
Inventors:	Adair, John Robert
	Athwal, Diljeet Singh
	Emtage, John Spencer
Priority Application Date:	21st December 1989
Earliest Publication Date/No:	11th July 1991/WO91/09967

Territory	Application Date	Application No.	Patent No.	Expiry Date
Australia	21.12.90	69740/91	646009	21.12.10
Australia (divisional)	21.12.90	64612/94	664801	21.12.10
Bulgaria	21.12.90	95018	60462	21.12.10
Canada	06.03.91	2037607.4
Canada (divisional)	06.03.91	2129219
*Europe	21.12.90	91901433.2	0460167	21.12.10
*Europe (divisional-1)	21.12.90	94104042.0
*Europe (divisional-2)	21.12.90	94202090.0
Finland	21.12.90	913926
Hungary	21.12.90	2734/91
Japan	21.12.90	501864/91
Norway	21.12.90	913228
Romania	21.12.90	148282
South Korea	21.12.90	700949/91
United Kingdom	21.12.90	9117612.3	2246570	21.12.10
United Kingdom (divisional)	21.12.90	9318912.4	2268745	21.12.10
USA	21.12.90	08/303569
USA	21.12.90	tba
USA (divisional)	21.12.90	[***]

*Includes:  Austria, Belgium, Denmark, France, Germany, Greece, Italy, Liechtenstein, Luxembourg, Netherlands, Spain, Sweden, Switzerland, United Kingdom

EX-10.2

Exhibit 10.2

PATENT LICENCE (ADAIR PATENT RIGHTS) (MEDI-493)

 VARIATION AGREEMENT

THIS VARIATION AGREEMENT entered into this                24th               day of June 2005 by and between CELLTECH R&D LIMITED (registered in England No. 1472269) whose principal place of business is at 208 Bath Road, Slough, Berkshire, SL1 3WE, England (“Celltech”) and UCB S.A. (Register of Commerce No. 85.078/Company No. 0403 053 608) whose registered office is at 60 Allee de la Recherche, B-1070 Brussels, Belgium and whose UK branch is registered in England (registered No. BR007969) and situate at 208 Bath Road, Slough, Berkshire, SL1 3WE (“UCB”) and MEDIMMUNE, INC., a company incorporated under the laws of the state of Delaware, United States of America, having its principal place of business at One MedImmune Way, Gaithersburg, MD 20878 (“Licensee”).

WHEREAS:

(A)On 19 January 1998 Celltech and the Licensee entered into the Patent Licence Agreement under the terms of which Celltech granted and the Licensee accepted a worldwide licence under the Adair Patent Rights.  On 27 May 2005 Celltech assigned all of the Adair Patent Rights to UCB together with the benefit and burden of the Patent Licence Agreement.

(B)On 30 January 2004, the Licensee commenced legal proceedings against Celltech in the District Court for the District of Columbia in the USA seeking declarations of non-infringement and invalidity of the ‘927 Patent (Action No. 1:04CV00143(RWR)).

(C)On 6 August 2004, the parties submitted a Joint Rule 26(f) Report in Action No. 1:04CV00143(RWR).  The Court entered an initial scheduling order on 5 November 2004, setting forth deadlines leading up to a claim construction hearing.  On 6 December 2004, the parties exchanged expert reports on issues relating to claim construction.  Claim construction briefing was completed on 17 March 2005, and a claim construction hearing took place on 18 May 2005.  On 8 April 2005, MedImmune filed a motion for summary judgment that the claims of the ‘927 Patent are invalid for

1

lack of enablement.  Briefing on MedImmune’s motion was completed on 10 May 2005.  On 29 April 2005, Celltech filed a cross-motion for summary judgment that the claims of the ‘927 Patent meet the enablement requirement.  Briefing on Celltech’s cross-motion was completed on 7 June 2005.  Discovery has been ongoing.

(D)On 18 March 2004, Celltech commenced legal proceedings against the Licensee in the High Court of Justice in England seeking payment of royalties under the Patent Licence Agreement for the Licensee’s sales of SYNAGIS (Claim No. HC04C00999).  The trial of the action took place before Mr Justice Laddie from 18 to 23 March 2005.  At the parties’ request no judgment has been handed down and on 10 June 2005 Mr Justice Laddie confirmed in writing to the parties that he would not deliver judgment or make any other public statement concerning the action.

(E)In order to avoid the expense, distraction and uncertainty of further litigation of the matter and for the convenience of the parties, the parties wish to settle both sets of legal proceedings by way of variation to the Patent Licence Agreement on the terms set out below.

IN CONSIDERATION of the mutual obligations set out below IT IS AGREED AS FOLLOWS:

1.DEFINITIONS

In this Variation Agreement:

1.1“Patent Licence Agreement” shall mean the patent licence agreement (Adair Patent Rights) (MEDI-493) entered into on 19 January 1998 between Celltech and the Licensee.

1.2Words and phrases defined in Clause 1 of the Patent Licence Agreement shall have the same meaning in this Variation Agreement EXCEPT where varied as set out below.

1.3“927 Patent” shall mean US Patent No. 6,632,927 B2 (one of the Adair Patent Rights).

1.4“SYNAGIS” shall mean the Licensee’s SYNAGIS product, more particularly described in Schedule 1 to this Variation Agreement.

2

2.AMENDMENT

2.1Clause 1.8 of the Patent Licence Agreement shall be amended as follows:

after “(MEDI-493)” insert:

“including, for the avoidance of doubt, SYNAGIS”

2.2Clause 3.3 of the Patent Licence Agreement shall be amended as follows (amendments are underlined):

“3.3(a) In further consideration of the licences granted in Clause 2 the Licensee shall pay to Celltech a royalty at the following rates of Net Receipts from all Products sold where the manufacture or sale of the Product in a country of the Territory would, but for the license granted hereby, infringe a Valid Claim:

3.3.1[***]

3.3.2[***]

(b) The parties agree that the manufacture or sale of SYNAGIS in the USA would, but for the license granted hereby, infringe a Valid Claim of the ‘927 Patent and therefore that the Licensee shall pay to Celltech a royalty at the rates set forth in Clause 3.3(a) of Net Receipts from SYNAGIS manufactured or sold in the USA.

(c) The Licensee shall pay a royalty for SYNAGIS under this Clause 3.3 only with respect to SYNAGIS manufactured or sold in the USA.  The parties agree that in the event that the Licensee terminates the Patent Licence Agreement, this Clause 3.3(c) shall survive such termination until the expiry of the ‘927 Patent or the ‘927 Patent is declared invalid or unenforceable in an unappealed or unappealable decision of a court or competent body having jurisdiction thereof.

(d) For the avoidance of doubt, no royalty shall be due under this Clause 3.3 with respect to SYNAGIS manufactured and sold outside of the USA.

3

(e) Further for the avoidance of doubt, no royalty shall be due under this Clause 3.3 with respect to Product sold by the Licensee prior to 1 July 2005 provided that between the date of execution of this Variation Agreement and 1 July 2005 the Licensee shall continue to conduct its business relating to SYNAGIS in the normal way and shall not offer any extraordinary inducements, discounts or any other scheme which would expedite the sales of SYNAGIS between the date of execution of this Variation Agreement and 1 July 2005.”

3.EFFECTIVE DATE

This Variation Agreement shall have effect from the Commencement Date of the Patent Licence Agreement.

4.DISCONTINUANCE OF LEGAL PROCEEDINGS

4.1The parties shall undertake all steps to ensure that the legal proceedings under UK Claim No. HC04C00999 and US Action No. 1:04CV00143 (RWR) are discontinued with both parties bearing their own costs.

4.2The parties agree to dismiss US Action No. 1:04CV00143 (RWR) with prejudice in accordance with Schedule 2 to this Variation Agreement.

4.3The parties shall undertake all steps to procure that no judgment or decision is issued in either set of legal proceedings referred to in Clause 4.1 above.

4.4Neither the Licensee nor any of its affiliates (each a “MedImmune Party”) shall, in connection with any actual, threatened or anticipated dispute between the parties to this agreement relating to SYNAGIS, challenge the validity or enforceability of, or seek to narrow the issued claims, scope or duration of, any claims of the ‘927 Patent, including, without limitation, any reexaminations or other proceedings in the US Patent and Trademark Office. [***]

4

5.INTEGRATION OF VARIATION AGREEMENT AND GOVERNING LAW

5.1This Variation Agreement together with the Patent Licence Agreement constitutes the entire agreement and understanding of the parties and supersedes all prior oral or written agreements, understandings or arrangements relating to the subject matter of either agreement.  Neither party shall be entitled to rely on any agreement, understanding or arrangement which is not expressly set forth in this Variation Agreement or in the Patent Licence Agreement.

5.2This Variation Agreement shall not be amended, modified, varied or supplemented except in writing signed by duly authorised representatives of the parties.

5.3The validity, construction and performance of this Variation Agreement shall be governed by English law.

5.4All disputes, claims or proceedings between the parties relating to the validity, construction or performance of this Variation Agreement shall be subject to the jurisdiction of the laws of England to the jurisdiction of whose courts the parties hereto submit.  Each of the parties consents to the award or grant of any relief in any such proceedings before the High Court of Justice in England.  Either party shall have the right to take proceedings in any other jurisdiction for the purposes of enforcing a judgment or order obtained from a Court of Justice in England.

IN WITNESS whereof, this Variation Agreement has been executed by duly authorised representatives of the parties on the year first above written.

SIGNED by	/s/
for and on behalf of
CELLTECH R&D LIMITED	Name:
	Position:

5

SIGNED by	/s/
for and on behalf of
UCB S.A.	Name:
	Position:
SIGNED by	/s/
for and on behalf of
MEDIMMUNE, INC.	Name:
	Position:

6

EX-31.1

Exhibit 31.1

CERTIFICATION:

I, David M. Mott, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2005 of MedImmune, Inc.

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposed in accordance with generally accepting accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 21, 2005	/s/David M. Mott
	David M. Mott
	Chief Executive Officer, President and Vice Chairman of the Board

EX-31.2

Exhibit 31.2

CERTIFICATION:

I, Lota S. Zoth, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2005 of MedImmune, Inc.

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposed in accordance with generally accepting accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 21, 2005	/s/Lota S. Zoth
	Lota S. Zoth
	Senior Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

MedImmune, Inc.

Certification

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), each of the undersigned officers of MedImmune, Inc., a Delaware corporation (the “Company”), does hereby certify, to such officer’s knowledge, that:

The Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2005 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ David M. Mott

David M. Mott

Chief Executive Officer, President and Vice Chairman of the Board

July 21, 2005

/s/ Lota S. Zoth

Lota S. Zoth

Senior Vice President and Chief Financial Officer

July 21, 2005