Monday, October 18, 2004

The outlook for MedImmune stock is good until the flu season ends early next year, but not nearly as good as it would have been if the company produced more FluMist vaccine, according to industry analysts.

Gaithersburg-based MedImmune’s stock closed up almost 7 percent yesterday from Friday’s close at $28.13 a share on the Nasdaq Stock Market, the highest level so far this year.

The stock value has risen 15 percent since Oct. 5, when Chiron, the manufacturer of half the U.S. flu vaccine, said it would not release any more vaccine this flu season because of contamination at its British manufacturing plant.

Yesterday’s edition of Schaeffer’s S&P 500 Index of Hot Stocks listed MedImmune among the top stock picks, largely because of the new market opportunities created by the flu vaccine shortage.

“The thing that is making the shares move is whether they can capitalize on this year’s flu season,” said Alex Hittle, a biotechnology analyst for the Wall Street investment firm AG Edwards. “Last year they failed to sell as many doses as they made and intended to sell. This year, they’re going to get a another crack at it.”

The flu season typically extends from October through January.

The shortage prompted by Chiron’s production problem could have meant a much bigger market for FluMist, if it had produced more of the nasal spray vaccine, Mr. Hittle said.

MedImmune produced only enough FluMist for its projected 1.1 million sales in 2004. The projection was based on orders placed by doctors last summer.

The company said it can manufacture only another 1 million doses before demand drops off this flu season. Manufacturing more would be costly and take too long.

“They’ve got about $50 million in fixed costs that they need to overcome,” Mr. Hittle said.

Chiron was scheduled to deliver 48 million doses before British authorities shut down the Liverpool plant.

MedImmune officials concede that although the flu vaccine shortage has focused public attention on FluMist, making a profit on it is not always easy.

“We don’t expect FluMist being a significant contributor to our bottom line until 2007,” said Jamie Lacey, MedImmune spokeswoman.

MedImmune sells a variety of medications, including serums for cancer and transplant patients.

The company plans to release a liquid form of FluMist in 2007 that can be administered to high-risk groups, such as infants and older adults. The current form of FluMist requires special storage facilities.

FluMist continues to face the same market obstacles encountered when MedImmune introduced it last year.

The Food and Drug Administration has cleared it for use only on healthy people between the ages of 5 and 49.

In addition, the price is higher than traditional injectable vaccines, which sell for $8 to $15. FluMist doses sell for $16 to $23.50.

FluMist is available at some doctor’s offices and pharmacies, such as Giant Food Store pharmacies in Northern Virginia.

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