MedImmune loss smaller than expected

Gaithersburg biotech firm lost 12 cents a share in quarter

July 23, 2004|By William Patalon III | William Patalon III,SUN STAFF

MedImmune Inc. reported a smaller-than-expected second-quarter loss yesterday, but must now focus on improving its existing drugs, including its problem-plagued FluMist, even as it works to bring promising new products to market.

"MedImmune's main focus must now be on [long-term] growth," said Jennifer M. Chao, a senior biotechnology analyst for Deutsche Bank in New York. "We don't expect to get any major news - such as clinical trial results - until the end of this year" at the earliest.

Gaithersburg-based MedImmune reported a net loss of $100 million, or 40 cents per share, for the second quarter that ended June 30. Excluding charges of more than $109 million - related to the termination of MedImmune's FluMist marketing partnership with Wyeth - the loss was 12 cents per share.

MedImmune was expected to lose 14 cents per share, according to a survey of 19 analysts conducted by Zacks Investment Research. The biotechnology firm reported a profit of $13 million, or 5 cents per share on a fully diluted basis, for the second quarter of 2003.

Revenue in the second quarter of this year was $94 million, down from $113 million for second-quarter 2003. However, revenue in last year's second quarter included $32 million that consisted mostly of one-time milestone payments from marketing partners, according to the company.

MedImmune shares rose 68 cents, or 3 percent, to close at $23.18.

After having to cut its 2004 profit outlook twice in less than two months, MedImmune yesterday was able to affirm the third-quarter guidance it had provided Wall Street in April: Revenue is projected to range between $85 million and $90 million, while the third-quarter loss - excluding charges - was forecast at 22 cents to 25 cents per share.

"We continue to be very pleased with the progress we've made in several areas of our business," said David M. Mott, MedImmune's vice chairman, president and chief executive officer.

That progress must continue - with the drugs MedImmune has on the market, as well as with products that for now remain part of the company's extensive "pipeline," Deutsche Bank's Chao said.

Two important drugs are Synagis and FluMist. Synagis, used to prevent infections of the lower respiratory tract in infants, has been a success for MedImmune, generating nearly $850 million in sales for all of 2003, and the company is testing an improved version.

FluMist, a nasal spray influenza vaccine, was a big disappointment during the most recent flu season, prompting the breakup this year of MedImmune's partnership with Wyeth.

MedImmune subsequently took sole control of FluMist, halved the drug's price, and intends to pursue federal approval for a broader eligible-age range for the vaccine. It also expects to introduce an improved version, called CAIV-T, though likely not until 2007.

A drug with promise is Vitaxin, according to MedImmune. Vitaxin stems from the so-called "monoclonal antibody" technology that's considered to be one of the company's core strengths.

Vitaxin may prove useful in battling diseases from rheumatoid arthritis to cancer, and MedImmune has been conducting clinical trials to test the drug's effectiveness against melanoma and prostate cancer.

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