MedImmune, Wyeth end collaboration over FluMist

Md. firm assumes control of poorly-selling vaccine

April 27, 2004|By William Patalon III | William Patalon III,SUN STAFF

MedImmune Inc. will assume global control of the FluMist influenza vaccine program after it and partner Wyeth yesterday ended their collaboration, the two firms said.

As part of the deal, the Gaithersburg biotech also will gain the rights and clinical research data for an improved version of FluMist, a nasal-spray flu inoculation. The new version, called CAIV-T, is projected to reach the market in 2007.

"As we have said, we do remain committed to FluMist," said MedImmune spokeswoman Jamie Lacey.

Financial terms were not disclosed, although Wyeth will also receive an unspecified upfront payment, progress payments and royalties on future sales, the two firms said. MedImmune will acquire Wyeth's distribution facility in Louisville, Ky., as part of the deal.

FluMist ran into trouble almost from the start, first because the Food and Drug Administration put stricter-than-hoped-for limits on who was eligible for the vaccine, and then because Wal-Mart Stores Inc. scrapped plans to sell the vaccine in 1,000 of its stores nationwide.

MedImmune launched FluMist with a $25 million advertising campaign, and 4 million doses were produced. But with a wholesale price of about $45, compared with $5 to $10 for a conventional injection, analysts said the partnership had made a strategic misstep by pricing itself out of the market.

Even during an especially virulent flu season that caused vaccine supplies to run low this past winter, fewer than 1 million doses of FluMist were sold, and not even a $25 rebate or outright giveaways were enough to save the product.

That disastrous start prompted both partners to announce they were re-evaluating FluMist.

MedImmune's reassessment was more tactical: It repeatedly reiterated its belief in the vaccine, and in the potential for its successor, though it also warned that its profits for the next few years would be lower than expected until the successor, CAIV-T, and other new drugs hit the market.

However, many analysts predicted that Wyeth would back away from the FluMist program. Then last month, Wyeth said it would fire 440 workers and close a plant in Pennsylvania after it finished its agreed-upon part of a production experiment involving CAIV-T.

Even though those moves were said to be part of the existing partnership agreement, some investors took that as a sign that Wyeth would be ending the collaboration.

MedImmune is to hold an early morning conference call with investors today to discuss the dissolution of its partnership with Wyeth.

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