- The Washington Times - Monday, March 1, 2004

Gaithersburg biotechnology company MedImmune Inc. said yesterday it is pinning its hopes for the success of FluMist on government approval to administer the nasal spray vaccine to toddlers.

MedImmune said itplans to continue producing FluMist despite disappointing sales in its first season. In January, company officials said they were uncertain whether they would keep selling the vaccine.

“We continue to believe it is a very good product,” Chief Executive Officer David Mott said in a conference call with analysts yesterday.

However, MedImmune reduced its earnings outlook. Company officials said the vaccine would not produce significant revenue until 2007, prompting the value of its stock to fall more than 6 percent to close at $24.10 on the Nasdaq Composite Index yesterday.

Part of the reason for FluMist’s slow start appears to be a failure of MedImmune to win over opinions of medical experts, according to industry analysts.

“If they can convince the medical community that this is not just a convenience but a superior product, then it could do well,” said Alex Hittle, biotechnology analyst for the investment firm A.G. Edwards.

FDA approval for use on toddlers could be a crucial factor in FluMist’s success or failure, he said.

“That’s a market where you’re likely to find people who are willing to pay up to avoid tears,” Mr. Hittle said about the inhalable vaccine.

The wholesale price of $46 per dose was about three times higher than that of a flu shot, which is administered by needle. The shot also had to be given by a health care professional, rather than purchased in a store, which is how MedImmune hoped to distribute it.

The FDA, when approving the vaccine, said it could not be used on people older than 49 or children 5 and younger. Small children and older adults are most vulnerable to flu.

The company seeks to expand the age limit for older adults after first winning approval to administer FluMist to children 5 and younger.

During the fall rollout of FluMist, MedImmune produced more than 4 million doses of the vaccine and staged a $25 million advertising campaign.

However, the company estimated it distributed only about 830,000 doses and ended up giving some away to doctors and pharmacies, despite a shortage of injectable vaccine.

FluMist was marketed by Madison, N.J.-based Wyeth Pharmaceuticals, a MedImmune partner.

Mr. Mott said he was uncertain whether Wyeth would continue in the partnership.

A Wyeth spokesman said the company was still in “an evaluation process” on FluMist’s future, but expected to make a decision soon.

MedImmune estimates that by 2007, the drug could generate more than $500 million in sales annually in the United States and $800 million worldwide, assuming the FDA approves administering it to small children within two to three years.

FDA regulators wanted more proof the live virus used in the vaccine would not cause respiratory problems.

Traditional injected vaccines use dead viruses, which MedIummne says are less effective.

• This article is based in part on wire-service reports.

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