- The Washington Times - Tuesday, December 24, 2002

Shares for biotechnology company MedImmune Inc. remained strong after the company secured support from an advisory panel to the Food and Drug Administration last week for its nasal spray flu vaccine.
Stock for the Gaithersburg company closed yesterday at $28.89, 15 percent higher than $24.99 a week before the panel's recommendation for FDA approval.
While the recommendation for FluMist doesn't guarantee FDA approval, the agency generally accepts the panel's decisions, said Will Roberts, manager of investor relations at MedImmune.
"There are certainly some big regulatory hurdles we have to go through for final approval, but the panel's recommendation does put us in better standing," Mr. Roberts said.
Mr. Roberts said MedImmune expects a decision from the FDA by mid-March and plans to market the nasal spray for the 2003-04 flu season that traditionally runs from October to January.
MedImmune reported mounting research, development and operating costs to acquire rights and manufacture FluMist in addition to profit losses for the third quarter ended Sept. 30.
Research costs increased 13 percent to $31 million from $21 million last year. Losses soared 94 percent to $36.2 million (14 cents per share) from $18.6 million (9 cents) a year earlier.
Most of the costs were one-time expenses to acquire rights for FluMist, said Philip Nadeau, vice president and biotechnology analyst with SG Cowen, a New York brokerage.
"Because the company's marketable drug, Synagis, is seasonal and shows profits in the first and fourth quarters, the quarterly earnings are often a misleading representation given the time you look at them," Mr. Nadeau said, rating the company a strong buy.
For the first nine months of the year, MedImmune showed a $1.18 billion loss compared with profits of $50.4 million for the like period last year.
Mr. Nadeau projected another jump in MedImmune shares after FDA approval, which he said would be likely in late February.
"Any move that propels FluMist closer to public consumption takes away more of the risk generally associated with biotechnology stock, pushing up investor trading," Mr. Nadeau said.
Quick FDA approval is expected because of few discrepancies between government and MedImmune officials during the panel's meeting, said David Webber, a biotechnology analyst with First Albany Corp. who changed his neutral rating to a buy after the panel's recommendation.
"When the government and company officials are on the same page with interpreting the data, it usually means a quicker approval," said Mr. Webber.
Mr. Webber said the major variation was the panel's decision to limit FluMist to patients ages 5 to 49.
"Even with the limitation, MedImmune is poised to penetrate the market with a more convenient way to get flu vaccinations," he added.
But Dr. Anna Kazanchyan, director of biotechnology research for Investec Inc., a New York brokerage firm, said the company lost 30 percent to 40 percent of its target market for FluMist.
"The panel's cut of two important age groups adults over 50 and children under ages 5 cuts a majority of the market that actually get flu shots," said Dr. Kazanchyan, who advised investors to sell. "FluMist still faces a high regulatory hurdle, and I get the sense it's not going to be a blockbuster product in its initial launch."

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