Firms team up on drug for infants Abbott Laboratories to assist MedImmune in marketing


December 02, 1997|By Mark Guidera | Mark Guidera,SUN STAFF

MedImmune Inc. and pharmaceutical giant Abbott Laboratories said yesterday that they've struck an alliance to market MedImmune's promising new drug to prevent a common infant respiratory disease.

The agreement, potentially worth more than $60 million for the Gaithersburg-based biotechnology company, covers marketing rights for Medi-493. MedImmune is developing the drug to prevent respiratory syncytial virus, or RSV, in infants.

RSV is the most common cause of hospitalization for children under 1 year old in the United States, striking about 90,000 children annually, according to pediatric experts. About 4,500 babies die annually of its complications.

Analysts were bullish on the potential in the deal for boosting MedImmune's profit picture and overall outlook.

Caroline L. Copithorne, a New York-based biotechnology analyst with Prudential Securities, said the deal should project 6-year-old MedImmune into profitability next year if the drug receives regulatory approvals in the United States and Europe.

"This is a very advantageous deal for MedImmune," she said.

"This is a fabulous deal with a powerful global partner," said Dr. Laurence Blumberg, a biotechnology and medical device industry analyst at New York-based Alliance Capital Corp., MedImmune's largest institutional investor.

If MedImmune is able to post a profit, it would join the ranks of the select few publicly held U.S. biotechnology companies that have crossed into the black. News of the deal pushed shares in MedImmune to a 52-week high of $42.75 yesterday, before falling back to close at $42.12 yesterday, up $3.87. More than 1 million shares traded.

Shares in Abbott Park, Ill.-based Abbott rose $1.93 for the day to close at $67.06

MedImmune said yesterday that it expects to seek marketing clearance from the U.S. Food and Drug Administration for the drug by the end of the year, and European clearances early next year.

MedImmune, which lost $40.2 million on $37.2 million in sales in the first nine months of this year, received a $15 million signing payment from Abbott.

The biotechnology company said it will get another $30 million payment if Medi-493 receives marketing approvals from U.S. and European regulatory agencies, and another $15 million payment when certain sales levels for the drug are achieved.

Analysts said that payment would likely be triggered when sales top $350 million -- what MedImmune expected it could sell on its own.

It will likely take several years of marketing the drug to hit that milestone, but Blumberg at Alliance said he expects a "very rapid uptake of the drug into the market," because it's easy to use and powerful.

The drug is expected to sell for about $4,500 per treatment, which is likely to involve one injection each month during the RSV season. That season lasts from November through April.

Copithorne, the Prudential analyst, said Abbott believes its 500-person pediatric sales force can generate about $500 million in Medi-493 sales.

The first $350 million in U.S. sales would go directly to MedImmune, said Copithorne.

Abbott would pay MedImmune an estimated royalty of 30 percent to 35 percent on sales above $350 million in the United States.

In a separate but related agreement, Abbott's international division will have exclusive rights to sell Medi-493 outside the United States.

MedImmune would manufacture the drug and sell it to Abbott, but would not get any sales royalties, said Mark Kaufmann, associate director, strategic planning and investor relations.

The companies said they believe the potential market for XTC Medi-493 -- the number of children at risk for the disease -- is about 325,000 in the United States and about the same in Europe.

MedImmune said yesterday that it has signed an agreement with a subsidiary of Boehringer Ingelheim to provide supplemental manufacturing of Medi-493, so MedImmune can keep pace with production needs. The drug will be produced at the company's new state-of-the-art production facility in Frederick.

That plant is expected to open next year.

MedImmune markets another drug for the disease, RespiGam, which is administered over several hours through an intravenous drip.

Pub Date: 12/02/97

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