Medimmune seems on track to gain approval of FluMist

4Q earnings decline, while sales improve

January 31, 2003|By Julie Bell | Julie Bell,SUN STAFF

MedImmune Inc. reported yesterday that its fourth-quarter earnings declined on acquisition-related costs despite increased sales and said it plans to answer within a week the Food and Drug Administration's five remaining questions about its application to market its flu vaccine.

The Gaithersburg-based biopharmaceutical company said the FDA outlined the questions about FluMist in what is known as a complete response letter. It was the third time the regulatory agency formally had asked for more information while deciding whether to approve the nasal-mist vaccine that MedImmune hopes will be its next blockbuster product.

Analysts Stefan D. Loren of Legg Mason Wood Walker and Robert A. Parente of Leerink Swann & Co. said MedImmune previously had indicated that it expected another such letter from the FDA. They also noted that it arrived about a month earlier than expected and contained questions the company thought it could easily answer.

"Getting it with only five questions that management thought were lay-ups also was an upside surprise," Parente said.

Shares of MedImmune rose $1.96 to $29.85 yesterday on the Nasdaq stock market, a gain Loren said was propelled by the market's belief that FluMist will now be approved.

"It's highly unlikely at this point that this is a zero," Loren said of the vaccine.

MedImmune said the FDA's five outstanding questions are one related to the vaccine's labeling, one related to proposals for studies of FluMist after it's on the market and three related to technical clarifications of quality-control tests done during production. No additional tests of the vaccine in people were requested, the company said.

Parente said he now expects FluMist, which would be the nation's first nasally inhaled vaccine for the flu, to receive FDA approval in the second or third quarter of this year - though approval is not assured. An FDA advisory panel made up primarily of vaccine experts found in December that FluMist was safe and effective for healthy people ages 5 through 49, a finding that amounts to its recommendation for approval in those age groups.

The FDA usually has followed the advice of such panels.

Separately, the company said it earned $84.6 million, or 33 cents a diluted share, in the fourth quarter. Analysts had predicted earnings of 33 cents a share, according to the average estimate of 23 analysts surveyed by Thompson First Call. The company earned $98.5 million, or 45 cents per diluted share, in the corresponding period a year earlier, before its $1.6 billion stock acquisition of Mountain View, Calif.-based Aviron - the original developer of FluMist.

Fourth-quarter revenue increased 30 percent to $381.8 million, driven largely by sales of MedImmune's Synagis drug that protects against severe respiratory infections in premature and other at-risk infants. Worldwide sales of Synagis increased 25 percent to $312 million from $250 million in the year-earlier period. U.S. sales of Synagis in the recent fourth quarter were $298 million, ahead of Parente's initial expectation of $275 million.

For the year, MedImmune lost $1.1 billion, or $4.40 per share, on revenue of $847.7 million. On an adjusted basis - one that excludes certain amounts related to the acquisition of Aviron, now known as MedImmune Vaccines - the company earned $106.6 million, or 42 cents per diluted share.

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