MEDIMMUNE INC /DE - 10-K Annual Report

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549

FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000
Commission File Number: 0-19131

MEDIMMUNE, INC.
(Exact name of registrant as specified in its charter)
Delaware 52-1555759
State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or organization)

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

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

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

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

Aggregate market value of the 210,700,415 shares of voting stock held by non-affiliates of the registrant based on the closing price
on February 16, 2001 was $8,875,754,982. Common Stock outstanding as of February 16, 2001: 212,043,741 shares.

Documents Incorporated by Reference:

Document Part of Form 10-K
Proxy Statement for the Annual Meeting Part III
of Stockholders to be held May 03, 2001.

MEDIMMUNE, INC.
FORM 10-K
TABLE OF CONTENTS
PART I PAGE
Item 1. Business........................................................................................1
Item 2. Properties.....................................................................................31
Item 3. Legal Proceedings..............................................................................32
Item 4. Submission of Matters to a Vote of Security Holders............................................33

PART II
Item 5. Market for MedImmune, Inc.'s Common Stock and Related
Shareholder Matters............................................................................34
Item 6. Selected Financial Data........................................................................35
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations............................................................37
Item 7A. Quantitative and Qualitative Disclosures about Market
Risk...........................................................................................47
Item 8. Financial Statements and Supplementary Data....................................................49
Report of Independent Accountants..............................................................76
Report of Management...........................................................................77
Item 9. Changes in and Disagreements with Accountants on
Accounting Financial Disclosure................................................................78

PART III
Item 10. Directors and Executive Officers of MedImmune, Inc.............................................78
Item 11. Executive Compensation.........................................................................78
Item 12. Security Ownership Certain Beneficial Owners and
Management.....................................................................................78
Item 13. Certain Relationships and Related Transactions.................................................78

PART IV
ITEM 14. Exhibits, Financial Statement Schedule, and
Reports on Form 8-K............................................................................79
SIGNATURES.......................................................................................................80
Schedule I .............................................................................................S-1
Exhibit Index ..............................................................................................E-1
Exhibits (Attached to this Report on Form 10-K)
Synagis, CytoGam, Ethyol, RespiGam, NeuTrexin and Hexalen are registered trademarks of the Company. Numax is a trademark of the
Company.

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The statements in this annual report that are not descriptions of historical facts may be forward-looking statements. Those
statements involve substantial risks and uncertainties. You can identify those statements by the fact that they contain words such
as "anticipate," "believe," "estimate," "expect," "intend," "project" or other terms of similar meaning. Those statements reflect
management's current beliefs, but are based on numerous assumptions which MedImmune cannot control and which may not develop as
MedImmune expects. Consequently, actual results may differ materially from those projected in the forward - looking statements.
Among the factors that could cause actual results to differ materially are: Seasonal demand for and continued supply of our
principal product; availability of competitive products in the market; availability of third-party reimbursement for the cost of our
products; effectiveness and safety of our products; exposure to product liability, intellectual property or other types of
litigation; foreign currency exchange rate fluctuations; changes in generally accepted accounting principles; growth in costs and
expenses; the impact of acquisitions, divestitures and other unusual items; and the risks, uncertainties and other matters discussed
below under "Risk Factors" and elsewhere in this annual report and in our other periodic reports filed with the U.S. Securities and
Exchange Commission. MedImmune cautions that RSV disease occurs primarily during the winter months; MedImmune believes its operating
results will reflect that seasonality for the foreseeable future. MedImmune is also developing several products for potential future
marketing. There can be no assurance that such development efforts will succeed, that such products will receive required regulatory
clearance or that, even if such regulatory clearance were received, such products would ultimately achieve commercial success.
Unless otherwise indicated, the information in this annual report is as of December 31, 2000. This annual report will not be updated
as a result of new information or future events.
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PART I Item 1. Business

MedImmune, Inc. (together with its subsidiaries, "the Company"), was founded in 1988 and is a biotechnology company headquartered in
Gaithersburg, Maryland with five products on the market and a diverse product portfolio. The Company is focused on using advances in
immunology and other biological sciences to develop important new products that address significantly unmet medical needs in areas of
infectious disease and immune regulation. The Company also focuses on oncology through its wholly-owned subsidiary, MedImmune
Oncology, Inc. (formerly U.S. Bioscience, Inc.), acquired in November 1999.

In 1998, the Company launched Synagis (palivizumab) in the United States for preventing respiratory syncytial virus (RSV) in
high-risk pediatric patients. Synagis is the first and only monoclonal antibody approved for an infectious disease and has become an
important new pediatric product for the prevention of RSV, the leading cause of viral pneumonia and bronchiolitis in infants and
children.

The Company also markets CytoGam (cytomegalovirus immune globulin intravenous (human), CMV-IGIV) and RespiGam (respiratory syncytial
virus immune globulin intravenous (human), RSV-IGIV) and has several product candidates undergoing clinical trials. Through MedImmune
Oncology's sales and marketing group, the Company also markets Ethyol (amifostine) and NeuTrexin (trimetrexate glucuronate for
injection). The Company has three manufacturing facilities: a manufacturing facility in Frederick, Maryland; a fill and finish
facility in Nijmegen, the Netherlands, and a pilot manufacturing facility at its headquarters in Gaithersburg, Maryland.

Products on the Market.

Synagis

Synagis is a humanized monoclonal antibody approved for marketing in June 1998 by the U.S. Food and Drug Administration ("FDA") for
the prevention of serious lower respiratory tract disease caused by respiratory syncytial virus ("RSV") in pediatric patients at high
risk of RSV disease. Synagis is administered by intramuscular injection at 15 mg/kg and is given once per month during anticipated
periods of RSV prevalence in the community. In the Northern Hemisphere, the RSV season typically commences in October and lasts
through April or May.

RSV is the most common cause of lower respiratory infections in infants and children worldwide. Healthy children and individuals
with adequate immune systems often acquire a benign chest cold when infected with RSV. In contrast, certain high-risk infants such
as premature infants and children with chronic lung disease ("CLD," also known as bronchopulmonary dysplasia or "BPD") are at
increased risk for acquiring severe RSV disease (pneumonia and bronchiolitis), often requiring hospitalization. Each year in the
United States, more than 125,000 infants are hospitalized with RSV disease. The mortality rate of hospitalized infants with RSV
infection of the lower respiratory tract is about two percent. There are approximately 325,000 infants at high risk of acquiring
severe RSV disease in the United States. Clinical studies have shown a 55-percent reduction in RSV hospitalizations among high-risk
pediatric patients receiving Synagis versus those patients receiving placebo. Synagis was safe and generally well-tolerated, and the
proportions of subjects in the placebo and Synagis groups who experienced any adverse event or any serious adverse event were similar.

In December 1997, the Company formed an exclusive worldwide marketing alliance with Abbott Laboratories ("Abbott") to commercialize
Synagis. Within the United States, the Ross Products Division of Abbott co-promotes Synagis with the Company. The Company records
all United States sales and pays Abbott a commission on sales above defined annual thresholds. Each company is responsible for its
own selling expenses.

In 2000, the Company sold $427.0 million of Synagis. In general, the Company expects most of its Synagis sales to occur in the
fourth and first quarters of the year because of the seasonality of RSV in the United States. Since most of the product is expected
to be sold in the Northern Hemisphere, the Company expects this seasonality to continue in the foreseeable future.

The Company believes that Synagis was broadly reimbursed by third-party payors during the 1999 - 2000 RSV season and the first part
of the 2000 - 2001 RSV season. There can be no assurance that third-party payors will not attempt to restrict reimbursement
guidelines of Synagis in future RSV seasons.

Outside the United States, the International Division of Abbott Laboratories has the exclusive right to distribute Synagis. The
Company manufactures and sells Synagis to Abbott for sales outside the United States. In May 1999, the European Union's ("EU")
Committee for Proprietary Medicinal Products ("CPMP") adopted a positive opinion on Synagis, which was followed in August 1999 by
marketing authorization by the centralized European Agency for the Evaluation of Medicinal Products ("EMEA"). As they are for all
drugs, pricing and reimbursement of Synagis are set on a country-by-country basis. As of December 31, 2000, the Company and Abbott
have submitted regulatory applications requesting approval to market Synagis in 58 countries outside the United States and have
received approval in 43: Argentina, Austria, Australia, Bahrain, Belgium, Brazil, Chile, Colombia, Costa Rica, Czech Republic,
Denmark, Finland, France, Germany, Greece, Guatemala, Hong Kong, Hungary, Ireland, Italy, Kuwait, Luxembourg, Malaysia, Mexico, the
Netherlands, New Zealand, Norway, Portugal, Saudia Arabia, Singapore, Spain, Sweden, Switzerland, Turkey, the United Kingdom ,
Uruguay and Venezuela. Net transfer price revenue to the Company from Abbott in 2000 for sales of Synagis outside of the United
States was $27.5 million.

The Company has established a manufacturing alliance with German-based Boehringer Ingelheim Pharma KG ("BI") to supplement its own
capacity to manufacture Synagis. In September 1998, the FDA approved the Company's supplement to its Biologic License Application
("BLA") allowing the Company to import and sell in the United States product from the BI facility. In December 1999, the FDA
approved the Company's own 91,000 square foot manufacturing facility in Frederick, Maryland ("Frederick Manufacturing Center" or
"FMC"). This approval allowed the Company to begin distributing Synagis manufactured at this facility. In 2000, the Company had a
major scientific breakthrough, whereby it has been able to increase Synagis fermentation yields over 300 percent. Even with these
yield improvements, the Company will continue to rely upon BI for the majority of production of Synagis for at least the next few
years. BI produces Synagis in large lot sizes relative to overall product supply; there can be no assurance that failure of one or
more lots of Synagis will not adversely impact the Company's supply of product and/or market perception. Additionally, because
Synagis costs are affected by changes in foreign exchange rates and production yields, there can be no assurance that Synagis will
continue to be economical to purchase from BI. Further, there can be no assurance that product supply will be properly matched with
demand.

The Company is continuing to evaluate Synagis in post-marketing clinical trials, including a multi-year Phase 3 safety and efficacy
study in children under two years of age with congenital heart disease ("CHD") and a multi-year Phase 4 safety study in children with
cystic fibrosis. In addition, the Cooperative Antiviral Studies Group ("CASG") at the National Institutes of Health ("NIH") has
opened enrollment in a Phase 3 study evaluating the ability of Synagis to prevent RSV disease in bone marrow transplant recipients.
There can be no assurance that data from these clinical trials will establish the safety or efficacy of Synagis in these populations,
or that results from these trials will not adversely affect perceptions of Synagis in the marketplace.

The Company received a composition of matter patent protecting Synagis through October 20, 2015. Additional patent applications
which could provide even broader and longer protection are pending. Other than the Company's product RespiGam (see below), the
Company is not aware of any competing products being marketed anywhere in the world for the prevention of RSV disease. The Company
believes that any products being developed, if successfully commercialized, would require at least four years of clinical development
and regulatory approval prior to reaching the marketplace. Nevertheless, there can be no assurance that a competitive product will
not be brought to market sooner than expected, or if brought to market, would not be superior to Synagis.

In June 2000, the Company announced its intent to expand its franchise in the RSV marketplace, including the development of a
third-generation injectable antibody, Numax, which may one day replace Synagis in the marketplace. The Company is currently
evaluating Numax in preclinical studies. The Company also entered into an alliance with Medarex, Inc. in 2000 to seek to discover and
potentially develop fully human monoclonal antibodies targeting RSV using its HuMAb-Mouse technology. The Company is also working
with Alkermes, Inc. to evaluate the feasibility of developing a pulmonary delivery system for an anti-RSV antibody. HuMAb-Mouse is a
registered trademark of Medarex, Inc.

CytoGam

CytoGam is an intravenous immune globulin product enriched in antibodies against cytomegalovirus ("CMV") and is marketed for
prophylaxis against CMV disease associated with transplantation of kidney, lung, liver, pancreas, and heart. CMV contributes
significantly to morbidity and mortality in organ transplant recipients. CMV can cause severe pneumonia and other organ
complications related to invasive CMV disease which, if not successfully treated, can lead to organ failure. CMV has also been shown
to cause increased bacterial and fungal infections, and has been associated with an increased risk of rejection of the transplanted
organ. There are approximately 20,000 kidney, lung, liver, pancreas, and heart transplants performed annually in the United States.
Clinical studies have shown a 50-percent reduction in CMV disease in kidney transplant patients given CytoGam and a 56-percent
reduction in serious CMV disease in liver transplant patients given CytoGam. CytoGam prophylaxis has also been associated with
increased survival in liver transplant recipients.

Historically, the Company has relied on third-party manufacturers for the production of CytoGam. In December 2000, the Company
received approval from the FDA for an amendment to the BLA for CytoGam allowing for the manufacture of a portion of the production
process of CytoGam at the FMC. The Company will continue to rely on third-party manufacturers to fulfill the production steps for
which the Company does not have FDA approval. Should any of the suppliers or manufacturers be unable to supply the Company with
product for any reason, there can be no assurances that the Company would be able to arrange alternate production capabilities in a
timely fashion or at all. Further, there can be no assurance that should such alternate production capabilities be needed, that the
Company would be able to obtain such capabilities for a comparable cost or without continuing to incur its existing manufacturing
operating costs.

The Company began marketing CytoGam through its own hospital-based sales force in 1993. Sales of CytoGam in the United States were
$36.5 million in 2000. CytoGam sales in 2000 reflect a moderate increase in core transplantation business offset by lower sales from
substitution that occurred as a result of the worldwide shortage of standard intravenous immune globulin (IVIG). The Company
believes that, currently, there is not a shortage of standard IVIG and has no way to predict future supply shortages. Further,
during 2000, certain Medicaid agencies began to limit or discontinue reimbursement of CytoGam as a substitute for standard IVIG. The
Company believes the United States marketplace for CMV drugs in transplantation is competitive and no assurance can be given that
growth in the product's labeled indications will continue. CytoGam has been designated as an orphan drug for use in lung, liver,
pancreas and heart and therefore has market exclusivity for these indications until 2005. The product's orphan drug status in the
United States for use of CytoGam in kidney transplants expired in 1997. There can be no assurance that additional CMV intravenous
specialty immune globulin products will not be successfully commercialized by other companies. The Company is aware of one other CMV
immune globulin in development by NABI, Inc.

Sales of CytoGam outside the United States were $4.7 million in 2000. Internationally, CytoGam is approved for marketing and is sold
by distributors in Argentina, Canada, Turkey, Slovakia and South Korea. The product is also available on a named patient basis in
several other countries. Additionally, the Company is evaluating the potential to expand distribution into countries including
Europe, Mexico and China.

RespiGam

RespiGam, an intravenous immune globulin enriched in neutralizing antibodies against RSV, was approved by the FDA for marketing in
the United States in January 1996. RespiGam is indicated for the prevention of serious RSV disease in children under 24 months of
age with BPD or a history of premature birth (i.e., born at 35 weeks or less gestation) and is administered by an approximately
four-hour intravenous infusion. RespiGam was the first product demonstrated to be safe and effective in reducing the incidence and
duration of RSV hospitalization and the severity of RSV illness in these high risk infants. The Company believes that RespiGam has
largely been replaced by Synagis in the marketplace.

Ethyol

Ethyol is an intravenous organic thiophosphate cytoprotective agent indicated for the reduction of both cumulative renal toxicity
associated with repeated administration of cisplatin in patients with advanced ovarian cancer or non-small cell lung cancer ("NSCLC")
and the incidence of moderate to severe xerostomia in patients undergoing post-operative radiation treatment for head and neck
cancer, where the radiation port includes a substantial portion of the parotid glands. Xerostomia (chronic dry mouth) is caused by
reduction of salivary function. It is a frequent and debilitating condition associated with radiation to the head and neck region.
Patients with xerostomia are at increased risk of oral infection, dental cavities and loss of teeth and often have difficulty
chewing, swallowing, and speaking. According to the American Cancer Society, approximately 40,000 cases of head and neck cancer are
diagnosed each year in the United States. Radiation therapy, often in conjunction with surgery and/or chemotherapy, is standard
treatment for this type of cancer.

Ethyol was initially approved by the FDA in 1995 for the ovarian cancer indication. In 1996, the FDA approved MedImmune Oncology's
supplemental new drug application ("sNDA") under the Accelerated Approval Regulations to include treatment of patients with NSCLC.
Products approved under the Accelerated Approval Regulations require further adequate and well-controlled studies to verify and
describe clinical benefit. The Company has recently completed and is in the process of collecting the final data from a clinical
trial that the Company anticipates may fulfill this requirement. In the event the clinical trial fails to verify the benefit of
Ethyol for the NSCLC indication, the FDA may, under certain circumstances, withdraw approval of this indication.

In December 1995, MedImmune Oncology entered into an exclusive marketing and distribution agreement with ALZA Corporation ("ALZA")
for Ethyol in the United States, whereby ALZA is responsible for sales and marketing of the product. MedImmune Oncology's sales
force co-promotes the product with ALZA in the United States. The Company sells Ethyol to ALZA at a price based on a percentage of
the net sales price of Ethyol in the United States, and ALZA then sells Ethyol to the distributors and wholesalers that supply Ethyol
for prescription sales. Net United States product sales to the Company for 2000 were $14.8 million. In April 2000, ALZA exercised a
one-time option to extend its marketing rights to April 1, 2002. Following the expiration of ALZA's rights, marketing rights to
Ethyol will revert to the Company and ALZA will receive a royalty from the Company for nine years, based on sales of Ethyol in the
United States.
Local health regulatory approvals for Ethyol have been received in 53 countries worldwide. Outside the United States, Ethyol is
primarily marketed by affiliates of Schering-Plough Corporation ("Schering" or "Scherico"). In the EU, Schering purchases Ethyol
from the Company at a price based on a percentage of the net sales price of Ethyol in Germany, the United Kingdom, Spain, Italy and
France. Schering's exclusive rights to market the product in the EU will continue through December 31, 2003. At the end of the
exclusive period, the Company can choose to co-promote Ethyol with Scherico for an additional two years, after which the rights
revert back to the Company in exchange for future royalties. The Company has various other distribution and marketing arrangements
for Ethyol outside the U.S. and the EU, primarily with affiliates of Schering. In 2000, net revenue of Ethyol to the Company from
sales outside the United States was $6.5 million.

In September 2000, outside investigators presented data from two Phase 3 trials of Ethyol. One study was with Ethyol in conjunction
with cisplatin/vinblastine in NSCLC, undertaken to fulfill the FDA's requirements for products approved under the Accelerated
Approval Regulations. The other Phase 3 study was of Ethyol with carboplatin/paclitaxel in NSCLC. Preliminary data from these
studies suggest that Ethyol reduces the impact of specific toxicities commonly associated with the use of certain chemotherapy agents
in NSCLC patients. The preliminary data also suggest that Ethyol does not interfere with the desired anti-tumor activity of
chemotherapy agents whether used alone or in combination. The Company is currently working to complete the analysis of these studies
for submission to United States and foreign regulatory agencies.

The Company is continuing to evaluate Ethyol in its approved indications through post-marketing clinical trials. A Phase 1 trial in
head and neck cancer is underway with a subcutaneous formulation of the drug. Additionally, a Phase 2/3 trial of Ethyol with
combination therapy of chemotherapy plus radiation in head and neck cancer was completed in 2000, and data analysis is underway.
Further, the Company plans to expand the applicability and usefulness of Ethyol by conducting trials that evaluate its ability to
reduce radiation-induced mucositis in various cancer patients. There can be no assurance that data from these clinical trials will
establish the efficacy of Ethyol in these populations, or that results from these trials will not adversely affect the perception of
Ethyol in the marketplace.

NeuTrexin

NeuTrexin is a lipid-soluble, intravenously administered analog of methotrexate, a commonly used anti-cancer agent. In December
1993, NeuTrexin was approved in the United States and Canada for use with concurrent leucovorin administration as an alternative
therapy for the treatment of moderate-to-severe Pneumocystis carinii pneumonia ("PCP") in immunocompromised patients, including
patients with AIDS, who are intolerant of or refractory to, trimethoprim-sulfamethoxazole therapy, or for whom
trimethoprim-sulfamethoxazole is contraindicated. Due to the improvement in drugs to treat AIDS patients, the use of NeuTrexin has
steadily declined in recent years.

In September 1994, the EU's CPMP also recommended approval for NeuTrexin for use as treatment of moderate-to-severe PCP in
immunocompromised patients. NeuTrexin was designated a "high tech List B" drug under the CPMP's Concertation Procedure which
provided for concurrent review of the dossier by the then 12 members of the EU and provides up to 10 years of regulatory exclusivity
in the EU markets upon approval. Following the positive CPMP recommendation, the Company received local regulatory approvals in 11
of the 12 original EU member countries. As of December 31, 2000, local health regulatory approvals for NeuTrexin have been received
in 31 countries outside the United States, including Canada, Denmark, France, Germany, Ireland, Luxembourg, the United Kingdom,
Spain, Greece, Sweden, Norway, Portugal, the Netherlands, Italy, Israel, and Argentina.

In mid-1999, MedImmune Oncology regained sole responsibility for the distribution, marketing and promotion of NeuTrexin in the United
States market, which had previously been conducted under a co-promotion agreement with ALZA. ALZA is entitled to be paid residual
commissions based on a percentage of NeuTrexin sales during the three-year period following the end of the co-promotion term.

Outside the United States, the Company has distribution or licensing agreements for NeuTrexin with a number of pharmaceutical
companies, primarily affiliates of Schering. To date, commercial sales of NeuTrexin outside the United States have been minimal.

In October 1995 and March 1996 the Company initiated two Phase 3 clinical studies to investigate the potential of NeuTrexin to treat
colorectal cancer. These trials include a Phase 3 trial of 5-fluorourocil ("5-FU") plus NeuTrexin or placebo in previously untreated
patients with advanced colorectal cancer, and a Phase 3 trial of 5-FU and leucovorin with or without NeuTrexin in previously
untreated patients with advanced colorectal cancer. Patient enrollment in these trials is complete and the Company is collecting
long-term survival data to meet current FDA requirements. There can be no assurance that data from these clinical trials will
establish the efficacy of NeuTrexin in this indication, or that results from these trials will not adversely affect perceptions of
NeuTrexin in the marketplace.

NeuTrexin's orphan drug status in the United States for the approved PCP indication expired in December 2000. Should the product
gain FDA approval for the colorectal indication, it would be eligible for seven years of orphan drug marketing exclusivity for that
indication.

Hexalen

Hexalen is an oral synthetic cytotoxic antineoplastic chemotherapeutic agent cleared for marketing by the FDA in December 1990 for
use as a single agent in the palliative treatment of patients with persistent or recurrent ovarian cancer following first-line
therapy with cisplatin and/or alkylating agent-based combination chemotherapy. The product has also been approved for the treatment
of ovarian cancer in 24 countries outside the United States, including Canada, the United Kingdom, Australia, New Zealand, Israel,
Sweden, Norway, China, South Korea, Egypt and Hong Kong.

In November 2000, MedImmune Oncology signed a worldwide purchase agreement for Hexalen and all related assets and technology with MGI
Pharma ("MGI"). MGI intends to assume full product responsibilities early in 2001. Under the terms of the agreement, MGI will pay
the Company $7.2 million in cash plus royalties on sales of Hexalen for ten years. The $7.2 million will be paid to the Company over
18 months.

Products In Development

Human Papillomavirus Vaccine

The Company is developing a vaccine against the human papillomavirus ("HPV") to prevent cervical cancer. There are over 75 different
types of HPV associated with a variety of clinical disorders, ranging from benign lesions to potentially lethal cancers. Two types
of HPV, HPV-16 and HPV-18, cause the majority of cervical cancer in the world. There are currently no vaccines to prevent HPV
infection, which is estimated to affect 24 to 40 million men and women in the United States.

In December 1997, the Company announced a strategic alliance with GlaxoSmithKline ("GSK") to develop and commercialize the Company's
HPV vaccine. Under the terms of the agreement, GSK receives exclusive worldwide rights to the Company's HPV vaccine technology and
both companies will collaborate on research and development activities. To date, the Company has received a total of $39.5 million
in up-front payments, an equity investment, and research funding from GSK. Pursuant to the agreement, the Company will continue to
receive certain research funding; milestone payments, if specified development and sales goals are met; and royalties on any product
sales. Total funding and payments to the Company, exclusive of royalties, could total over $85 million.

Under the terms of the agreement, the Company conducts Phase 1 and Phase 2 clinical trials, manufactures clinical material for those
studies and receives funding from GSK for these activities. GSK is responsible for the final development of the product, as well as
regulatory, manufacturing, and marketing activities.

The Company's strategy for vaccine development relies on a virus-like particle ("VLP") technology for producing a structurally
identical, non-infectious form of the virus. Scientists at the Company, in collaboration with a team at Georgetown University, first
demonstrated the effectiveness of a VLP vaccine candidate using a dog model for papillomavirus infection.

In 2000, the Company and GSK initiated several Phase 2 clinical programs. In July 2000, data from the initial Phase 1 studies were
presented at the International Papillomavirus Conference. This data included an evaluation of the HPV-16 and HPV-18 vaccine
candidates, MEDI 503 and 504, and the combined version of the vaccine, MEDI-517. The Phase I study for the HPV-16/HPV-18 vaccine
involved 48 healthy, female volunteers. These data demonstrated that in this study the vaccine was safe and generally well tolerated
at the doses given. The study also indicated that the vaccine has the potential to induce the desired immune response and the
potential to produce neutralizing antibodies.

No assurance can be given that the current clinical trials or any future clinical trials will be successful, or if successful, would
lead to a continuation of the programs in the indications currently studied or at all.

MEDI-507

MEDI-507 is a humanized monoclonal antibody derived from BTI-322, a rat monoclonal antibody the Company licensed from BioTransplant
Incorporated ("BioTransplant"). Both MEDI-507 and BTI-322 bind specifically to the CD2 antigen receptor found on T cells and natural
killer ("NK") cells. Laboratory studies suggest that BTI-322 and MEDI-507 primarily inhibit the response of T cells directed at
transplant antigens while subsequently allowing immune cells to respond normally to other antigens. The selectivity and long lasting
effects of this inhibition suggest that these molecules may have potential utility in certain autoimmune diseases such as psoriasis
and in applications in the transplantation field including treatment or prevention of graft-versus-host disease ("GvHD"). BTI-322 is
a registered trademark of BioTransplant.

Under the terms of the agreement with BioTransplant, the Company is responsible for all activities related to commercialization.
BioTransplant will receive milestone payments at various stages of product development and royalties if the product is
commercialized. BioTransplant has retained the right to use BTI-322 and/or MEDI-507 in its proprietary ImmunoCognance systems.

Autoimmune diseases are of major medical importance worldwide and include common afflictions such as rheumatoid arthritis, multiple
sclerosis, Crohn's disease and psoriasis. Psoriasis is a common chronic, recurrent disease characterized by dry, scaling, red
lesions on the skin. Approximately six million Americans have psoriasis, with between 150,000 and 260,000 new cases reported each
year. There is no cure for psoriasis and the treatments are often inconvenient, difficult to use, or have unwanted side effects.

The Company's current lead development program for MEDI-507 is in psoriasis. The Company has completed enrollment in a Phase 1
single-dose intravenous study, a multi-dose intravenous Phase 1/2 study and a multi-dose subcutaneous Phase 1/2 study.

The Company has also conducted work with MEDI-507 in GvHD patients, naive stem cell transplant ("SCT") or bone-marrow transplant
("BMT") recipients. Enrollment also continued in an open-label GvHD treatment trial in pediatric SCT or BMT patients. Currently
there are no agents approved for the treatment of GvHD in children. GvHD is a potentially fatal complication of bone marrow or stem
cell transplantation caused when certain white blood cells from the donor bone marrow attack the tissue of the recipient.

In December 2000, the Company presented data from a Phase 1/2 trial with MEDI-507 in patients with steroid-naive, severe GvHD that
showed that MEDI-507 combined with conventional steroid therapy was well tolerated. MEDI-507 has received orphan drug designation
from the Office of Orphan Products Development of the FDA for the treatment of GvHD (see "Government Regulation").

Urinary Tract Infection Vaccine

The Company is developing a vaccine candidate to prevent urinary tract infections ("UTIs") caused by Escherichia Coli ("E. Coli"), a
bacteria that causes 30 percent of all UTIs. UTIs are a significant medical problem and one of the most common disorders prompting
medical attention in otherwise healthy women and children. UTIs result in more than 7 million physician and hospital visits per year
at a cost of greater than $1 billion. It is estimated that by age 30, roughly 50 percent of women have had at least one infection
and as many as 10 percent are affected by recurrent infections. Recent studies have shown that, on average, women who are 18-40
years old get one to two infections over a two year period. Older adults are also at risk with the incidence as high as 33 out of
100 people. Currently, there are no vaccines to prevent UTIs. Most infections can be treated with antibiotics; however, recurrence
is common and emerging antibiotic resistant bacteria create an additional threat.

Early attempts to create a vaccine against UTIs targeted pili, hair-like protein appendages on the surface of bacteria. Such
attempts were not successful in protecting against a broad range of pathogenic bacteria, including E. coli, because of the
strain-to-strain variation in the major component of the pili. The identification of specific proteins, or "adhesins," at the end of
pili that facilitate the attachment of E. coli to human tissue, provided a novel target for vaccine development. The Company's
vaccine strategy is based on blocking these adhesins, thus preventing the disease-causing bacteria from binding and accumulating in
the bladder. The novel target of the Company's vaccine candidate is the FimH adhesin. FimH does not vary widely among the different
strains of E. coli that cause UTIs. The Company believes this is a requisite quality for development of a broadly effective UTI
vaccine.

In September 2000, the Company presented data from its initial Phase 1 study, designed to test the vaccine's safety and tolerability,
at the Interscience Conference on Antimicrobial Agents and Chemotherapy (ICAAC) in Toronto, Canada. In this study, the vaccine was
found to be safe, generally well tolerated and immunogenic. There was also evidence of a clear dose response. All volunteers
receiving the vaccine developed serum antibodies and those with the best serum responses exhibited antibodies in urine and vaginal
secretions. When studied in tissue culture, the antibodies were found to prevent the bacteria from binding to human bladder cells.
The most common side effect observed in the study was mild to moderate pain at the injection site.

In the fourth quarter of 2000, the Company initiated its first Phase 2 study with its vaccine candidate to prevent UTIs. No
assurance can be given that this clinical trial, or any future clinical trials expected to be conducted, will be successful, or if
successful, would lead to a continuation of the programs in the indications currently studied or at all.

Vitaxin

The Company is developing Vitaxin, an anti-angiogenic monoclonal antibody product, for potential use in both cancer and non-cancer
indications. During 2000, the Company completed preclinical development and scale up of Vitaxin in preparation for beginning Phase 1
clinical testing.

Angiogenesis is the growth of new blood vessels from pre-existing cells. In solid tumors, angiogenesis allows new blood vessels to
grow into solid tumor tissue, providing the growing tumor both a means of nutrient and oxygen uptake, and a possible route for tumor
metastasis into other organs. During angiogenesis, the solid tumor secretes growth factors that cause blood vessel-forming
endothelial cells to multiply and extend toward the solid tumor. These cells use a family of proteins called integrins to adhere to
the surrounding tissue, allowing them to continue their extension toward the tumor. Vitaxin binds to specific integrins called
alpha-v beta-3, found on newly sprouting blood vessels, stopping the growth of these blood vessels through apoptosis (programmed cell
death).

In 1999, the Company acquired the worldwide rights to Vitaxin from Applied Molecular Evolution, Inc ("AME"), a biopharmaceutical
company engaged in the development of novel therapeutics. Pursuant to this agreement, the Company is responsible for clinical
development, manufacturing and commercialization of Vitaxin, will fund certain research to be performed by AME and will make future
milestone and royalty payments on sales of any resulting products.

No assurance can be given that any future clinical trials will be successful, or if successful, would lead to a continuation of the
programs in the indications currently studied or at all.

MEDI-491, B19 Parvovirus Vaccine

The Company is developing a vaccine to prevent B19 parvovirus infection. Discovered in 1975, B19 parvovirus has been linked to a
number of serious conditions including certain types of miscarriages in pregnant women, life-threatening sudden reduction of red
blood cells in sickle cell anemia patients, chronic anemia in AIDS and chemotherapy patients, and persistent arthritis in some
adults. There are no agents available for the prevention of B19 parvovirus infection.

MEDI-491 utilizes VLP technology similar to that used for the Company's HPV vaccine candidates. By producing two natural B19
parvovirus proteins in the correct proportions in an insect cell recombinant protein production system, the Company and collaborators
at the National Heart, Lung, and Blood Institute ("NHLBI") are able to generate VLPs that resemble the natural B19 parvovirus
particles, but are not infectious. MEDI-491 received orphan drug designation in May 1999 from the Office of Orphan Products
Development of the FDA for the prevention of B19 parvovirus infection.

In 2000, the Company completed a Phase 1 study of MEDI-491 formulated with MF59. The study was designed to evaluate the safety of
the vaccine at two dose levels compared with placebo in 24 patients (12 volunteers per dose level). The Company is currently
analyzing the data.

In 1998, the Company entered into an agreement with Chiron Corporation ("Chiron") to use MF59, Chiron's proprietary vaccine adjuvant,
to improve the antibody response of MEDI-491. Pursuant to the agreement, the Company would provide payments to Chiron if certain
milestones are achieved and would pay royalties on any commercialized products.

Streptococcus pneumoniae Vaccine

During 2000, the Company granted GlaxoSmithKline ("GSK") a worldwide, exclusive license to its Streptococcus pneumoniae vaccine
technology in exchange for an up-front payment and future milestones totaling more than $30 million, plus royalties on any product
sales. Under the terms of the agreement, GSK is responsible for all clinical development, manufacturing and sales and marketing
activities for the S. pneumoniae vaccine. The Company completed the technology transfer to GSK during the fourth quarter of 2000.
Some of the technology licensed to GSK was originally licensed from Human Genome Sciences, Inc. ("HGS") and St. Jude's Childrens
Research Hospital.

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

No assurance can be given that pre-clinical development will be successful, or if successful, would lead to a continuation of the
programs in clinical development.

Numax

The Company intends to continue to expand its franchise in RSV prophylaxis by developing a third-generation anti-RSV product that may
be more potent than Synagis. Such a product may allow the Company to improve compliance, efficacy and patent position, thereby
further protecting its position in the RSV marketplace. In June 2000, the Company announced that it had developed several variants
of Synagis that were greater than ten times more potent than Synagis in microneutralization studies. These anti-RSV antibodies were
developed using AME's proprietary AMEsystem directed evolution technology. Variants were made by altering the complimentarity
determining regions (CDRs) of Synagis, the part of the antibody that determines its specificity. Over 40,000 variants of Synagis were
made and evaluated in total. Variants that exhibited an improved RSV-binding profile were then tested to determine their ability to
neutralize the RSV virus. The Company is currently evaluating candidate molecules in animal models to determine the most appropriate
candidate molecule to move forward as Numax into clinical evaluation. AMEsystem is a trademark of AME.

No assurance can be given that any pre-clinical development or future clinical trials will be successful, or if successful, would
lead to a continuation of the programs in the indications currently anticipated or at all.

Other Products

The Company continues to work on feasibility studies in a number of other areas. Any of these programs could become more significant
to the Company over the next 12 months; however, there can be no assurance that any of the new programs under review will generate
viable product opportunities. The Company may choose to address new opportunities for future growth in a number of ways including,
but not limited to, internal discovery and development of new products, in-licensing of products and technologies, and/or merger or
acquisition of companies with products and/or technologies. Any of these activities may require substantial capital investment.

Products and Product Development Programs

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

Product Indication Status(1)
Synagis RSV Prevention of RSV disease Marketed
Monoclonal in pediatric patients at
Antibody .... high risk of RSV disease

CytoGam Prophylaxis of cytomegalovirus Marketed
CMV Immune........ disease associated with
Globulin ......... transplantation of kidney,
lung, liver, pancreas and heart

RespiGam Prevention of serious RSV Marketed
RSV Immune disease in infants with
Globulin ... prematurity or lung disease

Ethyol ......... Reduction of cumulative Marketed
Cytoprotective ... renal toxicity associated
Agent ......... with repeated administration
of cisplatin in patients with
advanced ovarian cancer or non-
small cell lung cancer

Ethyol ......... Reduction of the Marketed
Cytoprotective.... incidence of moderate to
Agent ......... severe xerostomia in patients
undergoing post-operative radiation
treatment for head and neck cancer where
the radiation port includes a substantial
portion of the parotid glands

NeuTrexin......... For use with concurrent leucovorin Marketed
Pneumonia......... administration as an alternative treatment
Treatment ........ of moderate-to-severe
......... Pneumocystis carinii pneumonia
......... in immunocompromised patients,
including patients with AIDS,
who are intolerant of, or
are refractory to, trimethoprim-
sulfamethoxazole therapy or for
whom trimethoprim-sulfamethoxazole
is contraindicated

Synagis RSV Treatment of RSV disease in Phase 3
Monoclonal bone marrow transplant
Antibody (2) recipients

Synagis RSV Prevention of RSV disease in Phase 4
Monoclonal ....... children under 2 years of age
Antibody with cystic fibrosis

Synagis RSV Prevention of RSV disease in Phase 3
Monoclonal children under 2 years of age
Antibody with congenital heart disease

Ethyol ......... Treatment of NSCLC in conjunction Phase 3
Cytoprotective ... with cisplatin/vinblastine in NSCLC
agent .........

Ethyol ......... Treatment of NSCLC in conjunction Phase 3
Cytoprotective ... with carboplatin/paclitaxel in NSCLC
agent

Ethyol ......... Reduction in radiotherapy plus carboplatin Phase 2/3
Cytoprotective ... toxicities in head and neck cancer
agent .........

NeuTrexin......... Treatment of colorectal cancer Phase 3
Anticancer........
Agent
.........
MEDI-507 Treatment of graft-versus-host Phase 1
Monoclonal disease
Antibody
.........
MEDI-507 Treatment of psoriasis Phase 2
Monoclonal
Antibody

Ethyol ......... Subcutaneous administration in head Phase 2
Cytoprotective ... and neck cancer
agent .........

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

UTI Vaccine .. Prevention of urinary tract Phase 2
(FimH Adhesin) infections caused by E. Coli

HPV Cervical Cancer Prevention of cervical cancer Phase 2
Vaccine(3)

Vitaxin Anti-..... Treatment of cancer Phase 1
Alpha-V Beta-3.... by inhibition of angiogenesis
Monoclonal .......
Antibody

Numax ......... Prevention of RSV disease Preclinical
RSV monoclonal ... Development
Antibody

- ---------------
(1) "Phase 1" and "Phase 2" clinical trials generally involve
administration of a product to a limited number of patients
to evaluate safety, dosage and, to some extent, efficacy.
"Phase 3" clinical trials generally examine the efficacy
and safety of a product in an expanded patient population at
multiple clinical sites.
(2) This clinical trial is sponsored by the Cooperative
Antiviral Studies Group of the National Institutes of Health
(3) These products are being co-developed by the Company and
GlaxoSmithKline. The Company is entitled to certain
milestone payments and royalties on any sales, if and when
cleared for marketing by the FDA. The specific clinical
status of these products is not disclosed.

Marketing, Research, Development and Collaborative Agreements

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

Abbott Laboratories

In December 1997, the Company entered into two agreements with Abbott Laboratories ("Abbott"). The first agreement calls for Abbott
to co-promote Synagis in the United States in exchange for a percentage of net sales in excess of annual sales thresholds. Each
company is responsible for its own selling expenses.

The second agreement allows Abbott exclusively to distribute Synagis outside the United States. The Company manufactures and sells
Synagis to Abbott at a price based on end user sales. In August 1999, the EMEA granted marketing authorization for Synagis. As of
December 31, 2000, the Company and Abbott had submitted a total of 58 regulatory applications for approval to market Synagis and have
received approval in 43 countries. No assurance can be given that any of the remaining applications submitted or any future
submissions to any other countries for marketing licensure will be approved in a timely manner or at all.

ALZA Corporation

In December 1995, MedImmune Oncology entered into an exclusive marketing and distribution agreement with ALZA Corporation ("ALZA")
for Ethyol in the United States. ALZA has exclusive rights to market Ethyol in the United States until April 2002, and is
responsible for sales and marketing of the product. The Company's oncology/immunology sales force co-promotes the product with ALZA
in the United States. The Company sells Ethyol to ALZA at a price based on a percentage of the net sales price of Ethyol in the
United States, and ALZA then sells Ethyol to the distributors and wholesalers that supply Ethyol for prescription sales. Following
the expiration of ALZA's rights in 2002, marketing rights to Ethyol will revert to the Company, and ALZA will receive a royalty from
the Company for nine years, based on sales of Ethyol in the United States.

ALZA was co-promoting NeuTrexin and Hexalen in the United States until mid-1999. At that time, the Company regained sole
responsibility for the distribution, marketing and promotion of these products in the United States.

GlaxoSmithKline

In December 1997, the Company entered into a strategic alliance with GlaxoSmithKline PLC ("GSK") to research, develop, manufacture
and commercialize therapeutic and prophylactic HPV vaccines. In exchange for exclusive worldwide rights to the Company's HPV
technology, GSK provided the Company with an up-front payment of $15 million, future funding and potential developmental and sales
milestones which together could total over $85 million, royalties on any product sales and an equity investment of $5 million. Under
the terms of the agreement, the companies will collaborate on research and development activities. The Company conducts Phase 1 and
Phase 2 clinical trials and manufactures clinical material for those studies. GSK is responsible for the final development of the
product, as well as regulatory, manufacturing, and marketing activities.

In July 2000, the Company granted GlaxoSmithKline a worldwide, exclusive license to its Streptococcus pneumoniae vaccine technology
in exchange for an up-front payment and future milestones totaling more than $30 million, plus royalties on product sales. Under the
terms of the agreement, GSK is responsible for all clinical development, manufacturing and sales and marketing activities for the S.
pneumoniae vaccine. The Company completed the technology transfer to GSK in late 2000. The technology licensed to GSK was
originally licensed from Human Genome Sciences, Inc. and St. Jude's Childrens Research Hospital.

BioTransplant, Inc.

In October 1995, the Company and BioTransplant, Inc. ("BTI") formed a strategic alliance for the development of products to treat and
prevent organ transplant rejection. The alliance is based upon the development of products derived from BTI's anti-CD2 antibody,
BTI-322, the Company's anti-T cell receptor antibody, MEDI-500, and future generations of products derived from these two molecules
(such as MEDI-507, or humanized BTI-322). Pursuant to the alliance, the Company received an exclusive worldwide license to develop
and commercialize BTI-322 and any products based on BTI-322, with the exception of the use of BTI-322 in kits for xenotransplantation
or allotransplantation. The Company has assumed responsibility for clinical testing and commercialization of any resulting
products. The Company's clinical development efforts are focused on MEDI-507. BTI may receive milestone payments which could total
up to an additional $11 million, as well as royalties on any sales of BTI-322, MEDI-500, MEDI-507 and future generations of these
products, if any.

Human Genome Sciences, Inc.

In July 1995, the Company entered into a collaborative research and development relationship with Human Genome Sciences, Inc. ("HGS")
to create antibacterial vaccines and immunotherapeutic products based upon the genomic sequences of bacteria. One result of the
collaborative research is the Streptococcus pneumoniae vaccine technology licensed to GlaxoSmithKline Biologicals in 2000. Rights to
another genomic sequence for vaccine development, Helicobacter pylori, were out-licensed to Oravax, Inc. and Aventis Pasteur in
November 1996 for license payments as well as milestone and royalty obligations. Pursuant to a collaboration and license agreement
between the Company and HGS, the Company will be solely responsible for the commercialization of any products developed through the
collaboration, and HGS will be entitled to royalties based upon the extent to which any products jointly developed are covered by
patents or license rights held by HGS.

Massachusetts Health Research Institute and Massachusetts Biologics Laboratories

In August 1989 and April 1990, the Company entered into a series of research, supply and license agreements with Massachusetts Health
Research Institute ("MHRI") and Massachusetts Public Health Biologics Laboratories, then a division of the Massachusetts Department
of Public Health ("The State Lab"), covering products intended for the prevention or treatment of CMV and RSV infection and other
respiratory virus infections by immune globulins or monoclonal antibodies. The Company agreed to pay royalties on all sales using
the licensed technology. Pursuant to the agreements, the Company paid $23.6 million in 2000, $18.4 million in 1999, and $17.8 million
in 1998, for royalties, process development and manufacturing.

Schering-Plough Corporation

In May 1993, MedImmune Oncology entered into an exclusive marketing and distribution agreement with Scherico, Ltd. ("Scherico"), an
affiliate of Schering, for Ethyol in the countries comprising the EU and European Free Trade Association (the "European
Territories"). Under this agreement, Scherico purchases Ethyol from the Company at a price based on a percentage of the net sales
price of Ethyol in Germany, United Kingdom, Spain, Italy and France. Scherico's exclusive rights to market the product will continue
through December 31, 2003. At the end of the exclusive period, the Company may co-promote Ethyol with Scherico for two years,
through December 31, 2005. Thereafter, the Company will reacquire sole marketing rights, subject to an obligation to pay Scherico a
royalty based on a percentage of net sales, if any, from the European Territories for a period of three years. Scherico may
terminate the agreement at any time by providing 180 days written notice.

MedImmune Oncology also entered into licensing agreements for Ethyol and NeuTrexin with affiliates of Schering for several additional
territories outside the United States. The licensees are required to pay the Company compensation based on their net sales of the
products, and the Company sells the products to the licensees at an agreed upon price.

Applied Molecular Evolution

On February 25, 1999, the Company and Applied Molecular Evolution ("AME", formerly Ixsys, Inc.) announced an alliance to develop four
monoclonal antibodies. Under the terms of the alliance, AME would use its AMEsystem directed evolution protein engineering
technology to optimize antibodies identified by the Company, and the Company would be responsible for clinical development,
manufacturing and commercialization of any resulting products. The Company made a $6.4 million equity investment in AME, will fund
certain research to be performed by AME and will make future milestone and royalty payments on sales of any resulting products.

Also in February 1999, the Company entered into an exclusive license with AME for Vitaxin, an anti-angiogenesis monoclonal antibody.
As part of this agreement, the Company acquired worldwide rights to Vitaxin, and will be responsible for all clinical development and
marketing for the product. AME will receive royalties on any future sales of the product, should it be approved for marketing.

Medarex, Inc.

On June 13, 2000, the Company and Medarex, Inc. ("Medarex") entered into an agreement to develop fully human antibodies to multiple
antigens using Medarex's HuMAb-Mouse technology. Under the terms of the agreement, the Company received an exclusive, worldwide
license for the use of Medarex's HuMAb-Mouse technology for the development of antibodies against respiratory syncytial virus (RSV)
and an option to further license the use of this technology for additional antigens. Medarex receives technology access fees and
could also receive license and milestone payments, as well as royalties on any product sales.

American Home Products Corporation

The Company's strategic alliance with American Home Products ("AHP") provided for the co-development and co-promotion of RespiGam by
the two companies. The agreement provided for AHP to fund a portion of the cost of the development of RespiGam and to co-promote the
product in the United States. AHP shared in the profits and losses of RespiGam in the United States. The alliance provides for the
Company to receive royalties on any sales of AHP's RSV subunit vaccine candidate, and for AHP to receive royalties on United States
sales of Synagis.

Pursuant to an amendment to the agreement signed in December 1999, AHP's obligation to co-promote RespiGam in the United States was
terminated. In addition, AHP no longer shares in any profits or losses of RespiGam in the United States; the royalty obligations for
Synagis and AHP's RSV subunit vaccine candidate remain unchanged.

Other Agreements

The Company has a number of other collaborative and business agreements with academic institutions and business corporations,
including agreements with: 1) Washington University in St. Louis, Missouri covering development of pilus-based anti-bacterial
vaccines; 2) Georgetown University, the German Cancer Research Center and the University of Rochester covering development of
vaccines for human papillomaviruses; 3) Chiron Corporation covering supply of MF59, a proprietary vaccine adjuvant to be used for B19
parvovirus and E.coli development; 4) Alkermes to develop a pulmonary formulation of Numax targeting RSV; and 5) University of Texas
covering Fc technology to increase the half life of an antibody. In addition, the Company has license agreements with third parties
for CytoGam, RespiGam, Synagis and substantially all of its other potential products. Under such license agreements the Company is
obligated to pay royalties on any sales of these products.

Marketing and Sales

The Company has developed a sales and marketing organization which it believes is responsive to the increased importance of managed
care and the need of the healthcare industry to provide higher quality care at lower costs.

The Company now employs approximately 240 people devoted to sales and marketing of its products in the United States. Approximately
50 sales and managed care representatives cover approximately 500 hospitals and clinics in the United States, which specialize in
transplantation and/or pediatric/neonatal care, for the promotion of CytoGam and Synagis or RespiGam, respectively. Each of these 50
sales representatives is responsible for promoting all three of these products. Approximately 90 pediatric specialty sales
specialists cover the top 10,000 pediatric hospitals in the United States for the promotion and detailing of Synagis and RespiGam.
Approximately 25 oncology/immunology specialists and one national accounts manager are devoted to sales and marketing of Ethyol and
Hexalen (prior to its sale to MGI Pharma) to oncologists practicing in cancer treatment centers, large hospitals and private medical
practices. These oncology/immunology specialists are also responsible for sales and marketing of NeuTrexin to physicians treating
patients at risk for PCP.

The Company has co-promotion agreements with Abbott, through its Ross Products division, and with ALZA to co-promote its products in
the United States. Through its 500 sales representatives, the Ross Products division details Synagis to 27,000 office-based
pediatricians and 6,000 birth hospitals. ALZA has approximately 90 sales and managed care representatives selling Ethyol in the
United States to medical and radiation oncologists.

Sales outside the United States are made through distributors. Abbott serves as the Company's exclusive distributor for Synagis
outside of the United States. Scherico is the exclusive distribution partner for Ethyol in the countries comprising the European
Territories. Scherico and other affiliates of Schering have various other licensing and distribution arrangements for Ethyol and
NeuTrexin outside of the United States. In 2000, CytoGam, Hexalen, NeuTrexin and RespiGam were marketed outside of the United States
under distribution agreements with various companies.

Manufacturing and Supply

The Company has entered into manufacturing, supply and purchase agreements in order to provide production capacity for all of its
products.

The Company has a manufacturing and supply agreement with Boehringer Ingelheim Pharma KG ("BI") to provide supplemental production
capacity for Synagis, a humanized monoclonal antibody product. BI is currently the primary manufacturer of Synagis. BI also fills
and packages Synagis produced at its facility. The BI facility is subject to inspection and approval by the appropriate regulatory
authorities in connection with maintaining its FDA licensure as well as for obtaining and maintaining approval from certain ex-U.S.
countries. While the Company's Frederick manufacturing facility ("FMC") was licensed for production of Synagis by the FDA in
December 1999, the Company will continue for the foreseeable future to rely upon BI for production of additional quantities of
Synagis in order to meet expected worldwide demand for the product. Should BI be unable to supply Synagis to the Company for any
reason, there can be no assurance that the Company would be able to secure an alternate manufacturer in a timely basis or without
increased cost.

The Company's manufacturing facility in Frederick, Maryland is a multi-use biologics facility containing a cell culture production
area for the manufacture of recombinant products, such as Synagis and MEDI-507, if and when MEDI-507 is cleared for marketing by the
FDA. In addition, the facility is intended to provide production capacity for the manufacture of immune globulins and by-products
from human plasma. The Company's amendment to its BLA for approval of the facility for production of Synagis was approved in December
1999. There can be no assurance that the facility will receive regulatory approval for its other intended purposes. The Company has
limited experience in commercial manufacturing. Accordingly, the Company may encounter risks associated with commercial
manufacturing, including cost overruns, product defects and environmental problems. Furthermore, there can be no assurance that the
Company will be able to manufacture products at a cost that is competitive with third party manufacturing operations or that the
production yields will be comparable or better than those achieved at third party manufacturing operations.

The Company's pilot plant facility in Gaithersburg, Maryland was licensed by the FDA for the commercial production of Synagis in June
1998. This site produces materials for the Company's clinical trials. Materials currently being used in clinical trials for
MEDI-507, UTI vaccine, Vitaxin and MEDI-491 have been produced at the Company's pilot plant.

The Company executed an agreement with Chiron Corporation ("Chiron") effective in April 1998, pursuant to which Chiron fills and
packages Synagis produced at the Gaithersburg pilot plant and Frederick manufacturing plant. The term of the agreement is for three
years. The Company is currently renegotiating an extension of this contract. Should Chiron be unable to fill and package Synagis
for any reason, there can be no assurance that the Company would be able to secure an alternate provider without increased costs or
in a timely manner.

CytoGam and RespiGam are produced from human plasma collected from donors who have been screened to have high concentrations of
antibodies against CMV and RSV, respectively. Human plasma for CytoGam and RespiGam is converted to an intermediate raw material
(Fraction II+III paste). The State Lab, which holds the sole product and establishment licenses for CytoGam and RespiGam, processes
the Fraction II+III paste into bulk product.

In December 2000, the Company received approval from the FDA for an amendment to the establishment license held by the State Lab to
allow production of Fraction II + III paste for CytoGam at the FMC. The Company has an agreement with Aventis Pasteur ("AP") to fill
and package CytoGam and RespiGam. If the State Lab or AP is unable to satisfy the Company's product requirements on a timely basis
or is prevented for any reason from manufacturing its products, the Company may be unable to secure an alternative supplier or
manufacturer without undue and materially adverse operational disruption and increased cost.

The Company incurs significant fixed costs associated with the operation of the FMC. Further the Company currently has unutilized
capacity in the plasma production portion of the FMC. Should the Company be unable to produce Fraction II & III paste at the FMC for
any reason there can be no assurance that an alternate manufacturer could be arranged at a comparable cost, or at all, or that the
Company would not continue to incur fixed costs that might not be offset by product sales.

The Company also operates a small volume parenteral products manufacturing facility in Nijmegen, the Netherlands. This manufacturing
facility received the approval of the Dutch regulatory authorities and is now able to manufacture Ethyol and the finished dosage form
of NeuTrexin for commercial sale in Europe. The Nijmegen manufacturing facility has also been inspected by the FDA and approved as a
manufacturing site for NeuTrexin and Ethyol for commercial sale in the United States.

The Company relies on third parties to manufacture drug substance for Ethyol and NeuTrexin, and to a decreasing but still important
extent, on third parties to manufacture these finished drug products.

Patents, Licenses and Proprietary Rights

Products currently being developed or considered for development by the Company are in the area of biotechnology, an area in which
there are extensive patent filings. The Company relies on patent protection against use of proprietary products and technologies by
competitors. The patent position of biotechnology firms generally is highly uncertain and involves complex legal and factual
questions. To date, no consistent policy has emerged regarding the breadth of claims allowed in biotechnology patents. Accordingly,
there can be no assurance that patent applications owned or licensed by the Company will result in patents being issued or that, if
issued, such patents will afford protection against competitors with similar technology.

The Company believes that there are other patents issued to third parties and/or patent applications filed by third parties which
could have applicability to each of the Company's products and product candidates and could adversely affect the Company's freedom to
make, have made, use or sell such products or use certain processes for their manufacture. Some of these third parties have
contacted the Company claiming patent infringement by the Company. The Company is unable to predict whether it will ultimately be
necessary to seek licenses from such third parties or, if such licenses were necessary, whether such licenses would be available on
terms acceptable to the Company. The necessity for such licenses could have a material adverse effect on the Company's business.

There has been substantial litigation regarding patent and other intellectual property rights in the biotechnology industry.
Litigation may be necessary to enforce certain intellectual property rights of the Company. Any such litigation could result in
substantial cost to and diversion of effort by the Company.

Government Regulation

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

The Orphan Drug Act was established to encourage development of drugs for rare diseases and conditions affecting a small patient
population (generally fewer than 200,000 people). Orphan designation of a product can potentially provide a company with seven years
of market exclusivity if the company is the first to receive FDA product marketing approval for the orphan drug in the designated
indication. Additionally, this designation provides a company with tax credits of 50 percent for qualified clinical research
expenses and the opportunity for clinical research grants. CytoGam, RespiGam, Ethyol, NeuTrexin and MEDI-507 have been designated as
orphan drugs for certain indications by the FDA. Accordingly, (1) CytoGam has market exclusivity for use in lung, liver, pancreas,
and heart transplants until December 2005; (2) RespiGam has market exclusivity for its currently licensed indication through January
17, 2003; (3) Ethyol has market exclusivity for its currently licensed chemoprotective indication for patients with ovarian cancer
through December 2002, and for its radioprotective indication through June 2006; and (4) NeuTrexin had market exclusivity for its
currently licensed PCP indication through December 2000. Ethyol has also been designated as an orphan drug for use as a
chemoprotective agent for use with cyclophosphamide in the treatment of advanced ovarian carcinoma, as a chemoprotective agent for
use with cisplatin in the treatment of metastatic melanoma, for the treatment of myelodysplastic syndromes, and for the reduction of
the incidence and severity of cisplatin-induced toxicities. NeuTrexin has also been designated as an orphan drug for the treatment
of metastatic colorectal adenocarcinoma, metastatic carcinoma of the head and neck, pharynx and larynx, pancreatic adenocarcinoma and
advanced non-small cell carcinoma of the lung and osteogenic sarcoma. MEDI-507 has been designated as an orphan drug for the
treatment of graft versus host disease. MEDI-491 has been designated as an orphan drug for prevention of transient aplastic crisis
in people with sickle cell anemia. Accordingly, each of these products would have market exclusivity for seven years from the date
of FDA approval if it is the first product approved by the FDA for treatment of the designated orphan indication. The orphan drug
designation for CytoGam for use in kidney transplants expired in 1997.

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

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

Competition

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

The Company is aware of certain potentially competitive products targeting areas of medical interest to the Company, including
cytomegalovirus ("CMV"), respiratory syncytial virus ("RSV"), psoriasis, human papillomavirus ("HPV") infections and organ graft
rejection. In the prevention of CMV disease, the Company's CytoGam competes with several other products including other antiviral
drugs, standard immune globulin preparations and intravenous and oral ganciclovir, marketed by Hoffmann-La Roche Inc. The Company is
aware that a number of physicians have prescribed CytoGam in combination with ganciclovir for the prevention of CMV disease in
certain patients.

The Company believes that for the prevention of RSV disease, Synagis and RespiGam are the only products currently available. However,
the Company is aware of one product in the United States, ribavirin, which is indicated for the treatment of RSV disease. The
existence of this product, or other products or treatments of which the Company is not aware, or products or treatments that may be
developed in the future, may adversely affect the marketability of products developed by the Company.

Many companies, including well known pharmaceutical companies, are marketing anticancer drugs and drugs to ameliorate or treat the
side effects of cancer therapies, and are seeking to develop new products and technologies for these applications. Many of these
drugs, products and technologies are, or in the future may be, competitive with the Company's oncology products. In the United
States, the Company believes that Bristol-Myers Squibb Company holds the largest share of the chemotherapy market both in terms of
approved products and annual sales, and therefore dominates the marketplace. Other companies maintaining an active oncology
marketing and sales presence include Schering-Plough Corporation, Pharmacia & Upjohn, AstraZeneca, Hoffmann-La Roche, Inc., Johnson &
Johnson, Immunex Inc. (a subsidiary of American Home Products), Amgen, Inc., Chiron Corporation, Aventis SA, Eli Lilly and Company
and GlaxoSmithKline p.l.c. Many of these companies have substantially greater financial, technical, manufacturing, marketing and
other resources than the Company and may be better equipped than the Company to develop, market and manufacture these therapies. No
assurance can be given that the oncology drugs developed by the Company will be able to compete successfully against therapies
already established in the marketplace or against new therapies that may result from advances in biotechnology or other fields which
may render the Company's oncology drugs less competitive or obsolete. In addition, the Company's oncology drugs may become subject
to generic competition in the future.

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

EXECUTIVE OFFICERS OF THE COMPANY
Officer
Name Age Position Since

Wayne T. Hockmeyer, Ph.D. 56 Chairman 1988
David M. Mott 35 Chief Executive Officer and Vice Chairman 1992
Melvin D. Booth 56 President and Chief Operating Officer 1998
James F. Young, Ph.D. 48 President, Research and Development 1989
Franklin H. Top, Jr., M.D. 65 Executive Vice President and Medical Director 1988
Armando Anido 43 Senior Vice President, Sales and Marketing 1999
Edward M. Connor, M.D. 48 Senior Vice President, Clinical Affairs 1999
Bogdan Dziurzynski 52 Senior Vice President, Regulatory Affairs and 1994
Quality Assurance
Scott Koenig, M.D. 48 Senior Vice President, Research 1999
Gregory S. Patrick 49 Senior Vice President and Chief Financial 2001
Officer
Michael S. Richman 39 Senior Vice President, Business Development & 2000
Administration

Dr. Wayne T. Hockmeyer founded the Company in April 1988 as President and Chief Executive Officer and was elected to serve on the
Board of Directors in May 1988. He became Chairman of the Board of Directors in May 1993. Dr. Hockmeyer relinquished his position
as Chief Executive Officer in October 2000 and now serves as the Chairman of the Board of Directors. Dr. Hockmeyer earned his
bachelor's degree from Purdue University and earned his Ph.D. from the University of Florida in 1972. Prior to founding the Company,
he served as a commissioned officer in the United States Army from 1966 to 1986. From 1980 to 1986 he was Chairman of the Department
of Immunology at the Walter Reed Army Institute of Research. In 1986, Dr. Hockmeyer joined Praxis Biologics as Vice President of
Research and Development and was there until founding the Company in 1988. Prior to his business career, Dr. Hockmeyer was
recognized internationally for his research on malaria vaccines. Dr. Hockmeyer has authored more than 70 papers and articles in the
immunology and vaccine development fields. He is a Paul A. Siple Medal winner. His achievements in business were recognized in 1993
when he was selected as the "Ernst & Young Greater Entrepreneur of the Year. Dr. Hockmeyer was recognized, in 1998, by the
University of Florida as a Distinguished Alumnus. Active in other leadership roles, Dr. Hockmeyer was appointed by Governor Parris
Glendening to the Maryland Economic Development Commission and the Maryland Technology Development Corporation. He is a member of
the Board of Directors of Digene Corporation, Aviron, Intermune Pharmaceuticals, Inc., GenVec, Inc. and Advanced Pharma, Inc. Dr.
Hockmeyer is also a member of the Board of Directors of the Biotechnology Industry Organization, the Technology Council of Maryland,
a member of the Board of Visitors of the University of Maryland Biotechnology Institute and the Board of Advisors of the Institute of
Human Virology.

In October 2000, Mr. Mott became the Company's Chief Financial Officer. He joined the Company in April 1992 as Vice President, with
responsibility for business development, strategic planning and investor relations. In 1994, Mr. Mott assumed additional
responsibility for the medical and regulatory groups, and in March 1995 was appointed Executive Vice President and Chief Financial
Officer. In November 1995, Mr. Mott was appointed to the position of President and Chief Operating Officer and was elected to the
Board of Directors. In October 1998, Mr. Mott was appointed Vice Chairman and Chief Financial Officer. Mr. Mott is Chairman of the
Board of Directors of Conceptis Technologies and serves as a member of the Board of Trustees of St. James School. He holds a
bachelor of arts degree in economics and government from Dartmouth College.

Mr. Booth joined the Company in October 1998 as President and Chief Operating Officer and was elected to serve on the Board of
Directors in November 1998. Prior to joining the Company, he was President, Chief Operating Officer and a member of the Board of
Directors of Human Genome Sciences, Inc. from July 1995 until October 1998. Prior to this time, Mr. Booth was employed at Syntex
Corporation from 1975 to 1995, where he held a variety of positions, including President of Syntex Laboratories, Inc. from 1993 to
1995 and Vice President of Syntex Corporation from 1992 to 1995. Mr. Booth is a member of the Board of Directors of NovaScreen
Biosciences Corporation and Spacehab, Inc. Mr. Booth graduated from Northwest Missouri State University and holds a Certified Public
Accountant Certificate.

In December 2000, Dr. Young was promoted to the position of President, Research and Development. He joined MedImmune in 1989 as Vice
President, Research and Development. In 1995, he was promoted to Senior Vice President and in 1999 he was promoted to Executive Vice
President, Research and Development. Dr. Young received his doctorate in microbiology and immunology from Baylor College of Medicine
in Houston, Texas and bachelor of science degrees in biology and general science from Villanova University.

Dr. Top joined the Company in June 1988 as Executive Vice President. He was elected to the Board of Directors in July 1988 and became
the Company's Medical Director in 1990. Dr. Top holds a doctorate of medicine cum laude and a bachelor of science degree in
biochemistry from Yale University.

Mr. Anido, prior to joining the Company in 1999, was Vice President of CNS Marketing at Glaxo Wellcome, Inc. from 1996 to 1999.
Prior to this time, Mr. Anido served in various positions at Lederle Laboratories from 1989 to 1995, culminating in his service as
the Vice President of Anti-Infectives Marketing. Mr. Anido is a registered pharmacist, and holds a Bachelor of Science in pharmacy
and a Master of Business Administration degree from West Virginia University.

Dr. Connor joined the Company in 1994 as the Director of Clinical Studies. He was promoted in 1995 to Vice President of Clinical
Development, and then to Senior Vice President, Clinical Development in 1999. Dr. Connor holds a bachelor's degree in biology from
Villanova University and a medical degree from University of Pennsylvania School of Medicine. He is board certified in pediatrics
and is a consultant in pediatric infectious diseases.

Mr. Dziurzynski, prior to joining the Company in 1994, was employed by Immunex Corporation beginning in 1988, culminating in the
position of Vice President of Regulatory Affairs and Quality Assurance. Mr. Dziurzynski holds an undergraduate degree in psychology
from Rutgers University and a Master of Business Administration from Seattle University.

Dr. Koenig joined the Company in 1990 as the Director of Immunology. He was promoted to Director of Research in 1994, and in 1995,
Dr. Koenig was promoted to Vice President of Research. In 1999 he was promoted to Senior Vice President, Research. Dr. Koenig holds
a medical degree from the University of Texas Health Science Center at Houston, a doctorate in Immunology from Cornell University
Graduate School of Medical Sciences, and a Bachelor of Arts degree from Cornell University. He is a board-certified specialist in
Allergy and Immunology and Internal Medicine.

Mr. Patrick joined the Company in February 2001 as Senior Vice President and Chief Financial Officer. Prior to joining the Company,
he was Chief Financial Officer for Ventiv Health, Inc., a spinoff of global marketer Snyder Communications, from 1999 through 2000.
Prior to this time, Mr. Patrick was employed by Merck & Company, Inc. from 1985 to 1999. During this period, Mr. Patrick held a
series of positions, including Vice President and Group Controller in 1999, and Vice President and Controller of the manufacturing
division from 1991 to 1999. Mr. Patrick received a master of business administration degree in finance from New York University, and
a master of engineering degree and a bachelor of science degree in environmental engineering with a minor in chemical engineering
from Rensselaer Polytechnic Institute.

Mr. Richman joined the Company in 1996 as the Vice President of Business Development. He was promoted to Senior Vice President,
Corporate Development and Administration in 2000. Prior to Joining MedImmune, from 1985 to 1996, Mr. Richman held a number of
leadership positions at Chiron Corporation, in areas including research, intellectual property and business development. Mr. Richman
received his master of science degree in international business from San Francisco State University and his bachelor of science
degree in genetics and molecular biology from the University of California at Davis.

EMPLOYEES

As of December 31, 2000, the Company had 790 full time employees. The Company considers relations with its employees to be good.

RISK FACTORS

In addition to the other information included in this report, you should consider the following risk factors. This report contains
forward-looking statements covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements involve risks and uncertainties that may affect our business and prospects. Our results may differ
significantly from the results discussed in the forward-looking statements as a result of certain factors which are listed below or
discussed elsewhere in this report and our other filings with the Securities and Exchange Commission.

Product sales may vary: The amount we receive from sales of our products may vary from period to period for several reasons,
including: seasonal demand for our principal product, general market demand for our products, which may fluctuate, availability of
other competitive products in the market, availability of third-party reimbursement for the cost of treatment with our products,
effectiveness and safety of our products, rate of adoption and use of our products for approved indications and possible additional
indications, likelihood and timing of FDA and other regulatory approvals.

We do not expect any of the products we have under development to be commercially available prior to 2003 and they may never become
commercially available.

Increased work force could result in substantial costs and time delays: Recent increases in the size of our work force and scope of
operations could be harmful to us. In connection with our increased marketing efforts for Synagis, for manufacturing in our
Frederick facility, and the acquisition of USB, we have substantially increased the size of our work force. This rapid growth and
increased scope of operations present new risks we have not previously encountered and could result in unanticipated and substantial
costs and time delays which could materially and adversely affect the Company.

Significant costs could result from our manufacturing facility: Our Frederick manufacturing facility could result in significant
costs to us. We received approval from the FDA in 1999 for an amendment to our Biologics License Application for the production of
Synagis at the Frederick manufacturing facility. Additionally, we received approval from the FDA in December 2000 for an amendment
to the license held by the State Lab for approval of a portion of the production of CytoGam. Currently, we have excess capacity in
the plasma production portion of the Frederick facility. We will continue to incur substantial fixed costs associated with the
facility that may not be offset by product revenues.

We have limited experience in commercial manufacturing: We may encounter many new risks associated with commercial manufacturing,
such as: Manufacturing processes appropriate for low-volume production may not be suitable for higher-volume production; costs of
operating and maintaining the production facility may be in excess of our expectations; product defects may result; contamination of
product or product loss could occur; our production process may result in environmental problems; and we may not be able to
manufacture products at a cost that is competitive with third party manufacturing operations. If we were to experience any one or
more of these problems, there could be a material adverse effect on our business, financial condition or results of operations.

We are dependent on third party manufacturers and suppliers: We are currently, and for the foreseeable future expect to be, dependent
on a limited number of contract manufacturers for some or all of the manufacture of our current and future products (if any). We
depend on Boehringer Ingleheim Pharma KG ("BI") to produce the majority of the Synagis we sell. BI's facility is subject to
inspection and approval by both United States and foreign regulatory authorities in order to maintain its license to manufacture our
products. Should BI be unable to supply Synagis to us for any reason, there can be no assurance that we would be able to secure an
alternate manufacturer on a timely basis or without increased cost.

We depend on the University of Massachusetts, Massachusetts Biologics Laboratories ("the State Lab") for production of our plasma
derived products. The State Lab holds the sole product and establishment licenses from the FDA for the manufacture of CytoGam and
RespiGam. We rely on the State Lab to manufacture all of the bulk product for CytoGam we sell. We rely on the State Lab to produce
all the RespiGam we sell. We also rely on Aventis Pasteur to package and fill all our plasma derived products. Our manufacturing
arrangements with the State Lab are renegotiated annually. We cannot guarantee that any new arrangements will be on terms favorable
to us. In addition, we rely on a limited number of suppliers to obtain substantially all of the plasma used as raw material for the
production of CytoGam and RespiGam. The State Lab or these suppliers of raw material could fail to meet our requirements for the
production of CytoGam and RespiGam. If we were unable to obtain these products on reasonable terms or at all, we could be unable to
secure alternative suppliers or manufacturers without unduly disrupting our operations. Such a disruption could have a materially
adverse effect on our business, financial condition or results of operations. We have previously experienced shortages of CytoGam
and RespiGam, which has limited sales of these products without reducing our sales and marketing costs.

We depend on third parties to manufacture the drug substance for Ethyol and NeuTrexin. We also depend, to a decreasing but still
important extent, on third parties to manufacture our finished oncology drug products under contract. There can be no assurance that
third party manufacturers will give our orders highest priority, or that we would be able to readily find substitute manufacturers
without significant delays or increased costs.

Our research and development activities are costly and may not be successful: A considerable portion of our annual operating budget
is spent on research, development and clinical activities. We are currently developing numerous products that may never reach
clinical trials, achieve success in the clinic, be submitted to the appropriate regulatory authorities for approval, or be approved
for marketing or manufacturing by the appropriate regulatory authorities.

Further, we rely on numerous third parties to assist us in various stages of the development process. Third-party contract costs are
typically substantial. In addition, the third party contractors we use may be unable to complete their work in a timely fashion or
in a manner that is satisfactory to us. Should they be unable to meet our needs we may have to incur substantial additional costs,
which could have a material adverse effect on our business, financial condition, or results of operation.

We are dependent on strategic alliances: We depend on strategic alliances with our corporate partners to accomplish many of our
goals. If those corporate partners fail to devote sufficient effort and attention to achieving those goals, we would be adversely
affected.

Patent protection for our products may be inadequate or costly to enforce: We may not be able to obtain effective patent protection
for products we develop. We are currently developing, or considering developing, products in the biotechnology industry, an industry
in which there are extensive patent filings. The patent position of biotechnology firms generally is highly uncertain and involves
complex legal and factual questions. To date, no consistent policy has emerged regarding the breadth of claims allowed in
biotechnology patents. Accordingly, there can be no assurance that our patent applications will result in patents being issued or
that, if issued, such patents will afford protection against competitors with similar technology. Litigation could be necessary from
time to time in order to enforce our intellectual property rights. There has been substantial litigation regarding patent and other
intellectual property rights in the biotechnology industry. If we were required to litigate, there could be substantial cost
involved and significant diversion of our business efforts.

We may be required to seek patent licenses from third parties: We believe that there are patents issued to third parties and/or
patent applications filed by third parties which could apply to each of our products and product candidates. These patents and/or
applications could limit our ability to manufacture, use or sell our products. In such a case, we may be required to obtain a patent
license in order to avoid infringing a third party's intellectual property rights. If such a license were necessary, there can be
no assurance that it would be available on terms acceptable to us or at all, which could have a material adverse effect on our
business, financial condition or results of operations.

Technological developments by our competitors may render our products obsolete: If our competitors were to develop superior products
or technologies, our products or technologies could be rendered noncompetitive or obsolete. Biotechnology and pharmaceuticals are
evolving fields in which developments are expected to continue at a rapid pace. Our success depends upon achieving and maintaining a
competitive position in the development of products and technologies. Competition from other biotechnology and pharmaceutical
companies is intense. Many of our competitors have substantially greater research and development capabilities, marketing, financial
and managerial resources and experience in the industry. Were a competitor to develop a better product or technology, our products
or technologies could be rendered obsolete, decreasing our product sales and resulting in a material adverse effect on our business,
financial condition or results of operations.

Compliance with government regulations is costly and time-consuming: Substantially all of our products require costly and
time-consuming regulatory approval by governmental agencies. In particular, human therapeutic and vaccine products are subject to
rigorous preclinical and clinical testing for safety and efficacy and approval processes by the FDA in the United States, as well as
regulatory authorities in foreign countries. There can be no assurance that required approvals will be obtained. If we were unable
to obtain these approvals on a timely basis or at all, our ability to successfully market products directly and through our
collaborators, and to generate revenues from sales or royalties, would be impaired.

Any approved products are subject to continuing regulation. If we were to fail to comply with applicable requirements, we could be
subject to fines, recall or seizure of products, total or partial suspension of production, refusal by the government to approve our
product license applications, restrictions on our ability to enter into supply contracts, and criminal prosecution.

The FDA also has the authority to revoke product licenses and establishment licenses previously granted to us. Currently, we are
marketing Ethyol for the treatment of patients with NSCLC. This indication was approved under the FDA's Accelerated Approval
Regulations. These regulations require that we conduct clinical studies to verify and describe the clinical benefit of the approved
indication. We have completed trials which we anticipate will be sufficient to meet the FDA's requirements. If the FDA is not
satisfied that we have met the requirements, they may withdraw their approval of Ethyol in the NSCLC indication. Should the FDA
revoke any product or establishment licenses granted to us, this could have a material adverse effect on our business, financial
condition, or results of operations.

The regulation of recombinant DNA technologies and the regulation of manufacturing facilities by state, local and other authorities
is subject to change. Any changes to existing regulations would obligate us to comply, which could entail additional cost, time and
risk of non-compliance.

Product liability claims may result from sales of our products and product recalls may be necessary: As a developer, tester,
manufacturer, marketer and seller of health care products, we are potentially subject to product liability claims. Our blood
products, such as CytoGam and RespiGam, involve heightened risks of claims, including the risk of claims resulting from the
transmission of blood-borne diseases. Defending a product liability claim could be costly and divert our focus from business
operations. There can be no assurance that we will be able to maintain our current product liability insurance at a reasonable cost,
or at all. If a claim were successful, there is no guarantee that the amount of the claim would not exceed the limit of our
insurance coverage. Further, a successful claim could result in the recall of some or all of our products. Any of these occurrences
could have a material adverse effect on our business, financial condition or results of operations. Additionally, blood products
like CytoGam and RespiGam are occasionally recalled from the market because of risks of contamination from infectious agents or for
other reasons. Any such recall of our products could have a material adverse effect on our business, financial condition or results
of operations.

We depend on key personnel: Our success depends upon the continued contributions of our executive officers and scientific and
technical personnel. Many key responsibilities have been assigned to a relatively small number of individuals. The competition for
qualified personnel is intense, and the loss of services or certain key personnel could adversely affect our business. We do not
maintain or intend to purchase "key man" life insurance on any of our personnel.

The price of our common stock could fluctuate significantly over time: The market price of our common stock has fluctuated
significantly over time, and it is likely that the price will fluctuate in the future. Investors and analysts have been and will
continue to be, interested in our reported earnings, as well as how we perform compared to their expectations. Announcements by us
or others regarding operating results, existing and future collaborations, results of clinical trials, scientific discoveries,
commercial products, patents or proprietary rights or regulatory actions may have a significant effect on the market price of our
common stock. In addition, the stock market has experienced extreme price and volume fluctuations that have particularly affected
the market price for many high technology companies and that have often been unrelated to the operating performance of these
companies. These broad market fluctuations may adversely affect the market price of our common stock.

Changes in foreign currency exchange rates or interest rates could cause us losses: We have entered into foreign exchange forward
contracts which could result in losses. Because we have contracts for the future purchase of inventory which are denominated in
foreign currencies, there is a chance that foreign currency exchange rate changes could result in increases or decreases in the
actual cost of our purchases. To reduce the risk of unpredictable changes in the cost of our purchases, we may enter into forward
foreign exchange contracts, which allow us to purchase, for a fixed price on a specific date in the future, the amount of foreign
currency necessary to pay for our contractual purchase of inventory. Fluctuations in the anticipated payment date for the inventory
could require us to adjust the date of the contract, which could result in a change in the foreign currency exchange rate, which
could have a material adverse effect on our financial condition. Additionally, certain of our distribution agreements outside the
United States provide for us to be paid based upon sales in local currency. Changes in foreign currency exchange rates could
adversely affect the amount we expect to collect.

A discussion of our accounting policies for financial instruments and further disclosure relating to financial instruments is
included in the Notes to Financial Statements, located in Part II, Item 8 of this report.

The success of our products may be limited by government and third-party payors: The continuing efforts of government and third-party
payors to contain or reduce the costs of health care through various means may negatively affect sales of our products. In some
foreign markets, pricing and profitability of pharmaceutical products is subject to governmental control. In the United States,
there have been, and we expect there will continue to be, various Federal and state proposals to implement similar government
controls over pricing and profitability. The adoption by Federal or state governments of any such proposals could limit the
commercial success of our existing or any future products.

Both in the United States and elsewhere, sales of pharmaceutical products depend on the availability of reimbursement to the consumer
from third-party payors, such as government and private insurance plans. Third-party payors are increasingly challenging the prices
charged for products, and are limiting reimbursement levels offered to consumers for these products. To the extent that third-party
payors focus their efforts on our products, sales of our products could be negatively impacted.

ITEM 2. PROPERTIES

The Company's principal executive and administrative offices and research and development facilities are located in Gaithersburg,
Maryland. The facilities occupy approximately 104,000 square feet and are leased until 2006. In December 2000, the Company signed a
letter of intent to execute a fifteen year lease with renewal options for approximately 210,000 square feet of administrative and
research and development space. Construction of the new facilities, also located in Gaithersburg, Maryland, is expected to be
completed in fall of 2002 at which time the Company expects to sublease its current facilities. In addition, the letter of intent
includes agreements for approximately 16,000 square feet of temporary lease space until the new facilities are completed. The
temporary leases begin in 2001 and extend for five years; however, the Company has the option to terminate the leases at any time
with six months notice. The Company has secured options for additional administrative and research and development space, if needed,
through 2015.

The Company also owns 56,000 square feet of administrative and warehouse space and a 91,000 square foot multi-use biologics facility
in Frederick, Maryland. The biologics facility includes a cell culture production area used for manufacture of products such as
Synagis, and is also used for the manufacture of immune globulins and by-products from human plasma. In addition to its Maryland
facilities, the Company leases warehouse space in Nijmegen, the Netherlands, of approximately 9,000 square feet, which is subject to
a lease that extends through 2003.

The Company previously leased approximately 37,000 square feet of administrative and laboratory space in West Conshohocken,
Pennsylvania and Exton, Pennsylvania. The leases were terminated during 2000. In addition, the Company terminated leases for
approximately 10,000 square feet of administrative space in the United Kingdom during 2000.

The Company believes that its current facilities and anticipated additions are adequate to meet its research and development,
commercial production, and administrative needs.

ITEM 3. LEGAL PROCEEDINGS

In 1996, the Company entered into a Material Transfer Agreement and a Confidentiality Agreement with MediGene AG ("MediGene")
relating to human papillomavirus vaccine ("HPV") technology in which the Company had a potential interest. In 1997, the Company
learned information that caused it to believe that such technology had been developed by employees of Loyola University of Chicago
("Loyola"). As a result, the Company acquired from Loyola a license to patent applications directed to such technology. The Company
granted to GlaxoSmithKline a sublicense under the Loyola license.

In 1998, MediGene AG initiated a legal action against Loyola University of Chicago and the Company in the U.S. District Court for the
Northern District of Illinois alleging, among other things, breach of contract and tortious interference by the Company with
MediGene's alleged contractual and prospective business relationships with Loyola and GlaxoSmithKline. The claims relate to human
papillomavirus vaccine technology allegedly covered by contracts between MediGene and the Company and by a license agreement from
Loyola to the Company, under which the Company granted a sublicense to GlaxoSmithKline. MediGene claims monetary damages from the
Company and ownership of the patents in question, as well as rescission of the Company's license agreement from Loyola or rights as a
third-party beneficiary thereof.

In November 2000, the Company and Loyola moved for summary judgment seeking dismissal of all claims. In December 2000, the District
Court granted partial summary judgment in favor of the defendants, dismissing the tortious interference with contract claim against
the Company and the breach of contract claim against Loyola. The Court reserved ruling on the summary judgment motion with regard to
the remaining claims pending additional briefing and a hearing scheduled for March 12, 2001. The previously scheduled trial date of
January 8, 2001 was vacated.

In October 2000, Celltech Chiroscience Limited ("Celltech") commenced a legal proceeding against the Company in the U.K. High Court
of Justice, Chancery Division, Patents Court. Celltech alleges that the Company failed to pay royalties with respect to its sales of
Synagis as required by a license agreement dated January 19, 1998. Under the agreement, the Company obtained from Celltech a
worldwide license to make, use and/or sell product under a patent (and related applications) pertaining to humanized antibodies. In
the proceeding, Celltech seeks payment of royalties, with interest, and certain costs, including attorney's expenses. The Company
has filed answering papers denying that any royalties are due on the basis that Celltech's patent does not cover Synagis and has
notified the court that the Company intends to seek dismissal of the case on the grounds that the legal doctrine of prosecution
history estoppel prevents Celltech from claiming that its patent covers Synagis.

On February 28, 1996, Ichthyol Gesellschaft Cordes, Hermanni & Co. ("Ichthyol Gesellschaft") filed a complaint for refrain,
information and damages with the Regional Court of Hamburg against U.S. Bioscience, Inc. on the grounds of trademark infringement in
respect of the use of the trademark "Ethyol" in Germany. The suit was dismissed on January 29, 1997 by the Regional Court of Hamburg
at which time Ichthyol Gesellschaft was given leave to appeal against the judgment rendered in favor of U.S. Bioscience. Ichthyol
Gesellschaft filed an appeal, and a judgment was rendered in favor of U.S. Bioscience in the appellate proceedings. In January
1999, Ichthyol Gesellschaft filed an appeal on points of law with the Federal Court of Justice, and in June 1999, Ichthyol
Gesellschaft filed the grounds for the appeal on points of law. In October 1999, the Federal Court of Justice accepted Ichthyol
Gelleschaft's appeal. U.S. Bioscience was advised that it usually takes a year and one-half from the acceptance of such an appeal
until a hearing is held, and it is not possible to predict the decision of the Federal Court of justice with respect to the matter.

After consultation with its counsel, the Company believes that it has meritorious defenses to the claims referred to above and it is
determined to defend its position vigorously. While it is impossible to predict with certainty the eventual outcome of these
proceedings, the Company believes they are unlikely to have a material adverse effect on its financial position but might have a
material adverse effect on its results of operations for a particular period.

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

Not applicable.

PART II

ITEM 5. MARKET FOR MEDIMMUNE, INC.'S COMMON STOCK AND RELATED SHAREHOLDER MATTERS

The Company's common stock trades on The NASDAQ Stock Market under the symbol "MEDI". At February 16, 2001, the Company had 1,723
common stockholders of record. This figure does not represent the actual number of beneficial owners of common stock because shares
are generally held in "street name" by securities dealers and others for the benefit of individual owners who may vote the shares.

The following table shows the range of high and low closing prices and year end closing prices for the common stock for the two most
recent fiscal years, adjusted to reflect a three-for-one stock split on June 2, 2000.

2000 1999

High Low High Low

First Quarter $76.25 $43.00 $22.00 $14.33
Second Quarter 80.69 42.00 24.67 15.00
Third Quarter 86.13 57.75 40.21 22.96
Fourth Quarter 72.63 44.63 58.60 29.67
Year End Close $47.69 $55.29

The Company has never declared or paid any cash dividends on its common stock and does not anticipate paying any cash dividends in
the foreseeable future. The Company currently intends to retain any earnings to fund future growth, product development, and
operations.

ITEM 6. SELECTED FINANCIAL DATA

(in thousands, except per share data)

RESULTS FOR THE YEAR 2000 1999* 1998* 1997* 1996*
Total revenues $540,495 $383,375 $227,221 $105,748 $45,565
Gross profit 368,483 266,622 107,988 39,315 23,933

Net earnings/(loss) 111,156³ 93,371² 47,187¹ (44,804) (32,358)

Earnings/(loss) per share

Earnings
Basic 0.53⁴ 0.49 0.28 (0.30) (0.24)
Diluted 0.50⁴ 0.44 0.24 (0.30) (0.24)

YEAR END POSITION
Cash and marketable
securities $526,254 $270,394 $176,860 $101,246 $74,716
Total assets 1,006,575 648,424 405,777 232,717 106,443
Long-term debt 10,302 11,856 87,910 90,276 3,829
Shareholders' equity 843,582 537,079 248,566 87,560 80,673

PRO FORMA RESULTS
The following data represents the Company's pro forma financial results assuming a retroactive adoption of a
change in accounting (SAB 101).

Total revenues $540,495 $385,222 $204,209 $87,624 $45,351
Net earnings 144,977 94,505² 33,058¹ (62,928) (32,572)
Earnings/(loss) per share
Basic 0.69 0.50 0.19 (0.42) (0.26)
Diluted 0.66 0.45 0.17 (0.42) (0.26)

*Note: Earnings/(loss) per share data have been restated to give effect for the three-for-one stock split on June 2, 2000.

1 Includes deferred income tax benefit of $47,428.
2 Includes deferred income tax benefit of $40,973.
3 Includes charge for cumulative effect of change in accounting principle, net of tax, of $33,821.
4 Includes a charge of $0.16 per share for the cumulative effect of a change in accounting principle.

QUARTERLY FINANCIAL DATA (UNAUDITED)
(thousands, except per share amounts)

2000 Quarter Ended

Dec. 31 Sept. 30* June 30* March 31*
Net sales $227,394 $47,246 $25,387 $195,776
Gross profit 172,890 31,472 13,373 150,748
Earnings (loss) before cumulative
effect of a change in accounting
principle 79,442 8,440 (5,303) 62,398
Net earnings (loss) 79,442 8,440 (5,303) 28,577
Earnings (loss) per share before
cumulative effect of change in
accounting principle:
Basic $0.38 $0.04 ($0.03) $0.30
Diluted $0.36 $0.04 ($0.03) $0.29
Net earnings (loss) per share:
Basic $0.38 $0.04 ($0.03) $0.14
Diluted $0.36 $0.04 ($0.03) $0.13

*Note: Amounts for each of the first three quarters of 2000 have been restated to give effect for the implementation of a change in
accounting (SAB 101) in the fourth quarter, retroactively to January 1, 2000. The impact of the change resulted in an increase in
other revenue of $4,182, $5,753 and $7,184 for the quarters ended September 30, June 30, and March 31, respectively, and an increase
in net earnings (loss) before change in accounting of $2,568, $3,532 and $4,411 at September 30, June 30, and March 31, respectively,
as compared to amounts previously reported. The change in accounting resulted in an increase in basic and diluted earnings (loss)
per share before the change in accounting of $0.01, $0.01 and $0.02, respectively. See Management's Discussion and Analysis of
Financial Condition and Results of Operations. The quarter ending March 31 earnings per share data have also been restated to give
effect for the three-for-one stock split on June 2, 2000.
1999 Quarter Ended

Dec. 31 Sept. 30 June 30 March 31
Net sales $171,459 $38,631 $13,311 $133,414
Gross profit 132,088 26,305 7,697 100,532
Net earnings 34,151 2,788 30,7191 25,713
Earnings per share *:
Basic 0.17 0.01 0.17 0.15
Diluted 0.16 0.01 0.15 0.13

*Note: Amounts have been restated to give effect for the three-for-one stock split on June 2, 2000.

1 Included deferred income tax benefit of $40,973.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

We are pleased to report to you on our financial condition and results of operations. During 2000, the Company achieved another year
of record revenues and earnings. The following discussion should be read in conjunction with the accompanying financial statements
and related notes.

OVERVIEW

The Company, since inception, has incurred significant operating expenses developing its products and experienced substantial
operating losses until achieving profitability in 1998. The profitability was driven by sales of Synagis, the Company's second
generation anti-RSV drug which was approved by the FDA on June 18, 1998 and by the Centralized European Agency for the Evaluation of
Medicinal Product