MedImmune Inc. reported yesterday first-quarter earnings that walloped Wall Street predictions despite increased research and development costs and poor sales of the company's best-known product, the nasal spray vaccine FluMist.
Net income in the quarter that ended March 31 was $114.1 million, or 45 cents per share. Analysts had predicted earnings of $94.4 million, or 36 cents per share, according to Thompson First Call. In the corresponding quarter last year, profit was $111 million, or 43 cents per share.
MedImmune stock climbed on the Nasdaq stock market after the announcement, with shares trading at three times their usual volume and closing up 3.7 percent yesterday at $25.76.
The Gaithersburg-based company credited the increase to a 12 percent rise in worldwide sales of its most popular product, Synagis, a treatment for respiratory infection in infants. Synagis sales were $472 million, up from $422 million in the first quarter of last year.
Sales of Cytogam, a treatment to prevent infection after organ transplants, increased to $12 million in the quarter from $10 million a year ago.
Sales of the company's two other products fell.
Ethyol, which moderates certain side effects of cancer treatments, dropped 4 percent to $23 million compared with the first quarter of 2004. FluMist sales plunged 88 percent to $3 million compared with sales of $26 million in last year's quarter.
During a conference call yesterday morning, the company's chief financial officer, Lota Zoth, pointed out that the 2004 quarter's earnings were misleading because they took into account revenue from 2003.
Company officials have repeatedly said they don't expect Flu- Mist to contribute to profits until a second-generation formula - CAIV-T, which is believed to have wider application and be easier to store - is approved.
This year, efforts were put into "educating as many pediatricians and primary care physicians as we can" about the vaccine in hopes that the new version will be quickly adopted, said Armando Anido, executive vice president for sales and marketing.
Revenue overall was $510 million, up 4 percent from $489 million in the corresponding quarter last year. Research and development expenses increased 38 percent in the first quarter to $69 million from $50 million last year because of clinical trial costs associated with CAIV-T and Numax, a second generation of Synagis. Sales and administrative costs jumped to $158 million from $124 million last year.
Chief Executive Officer David M. Mott said the company is on track to bring the second-generation products, along with two others, to market by 2010 as part of the company's five-year plan.
MedImmune predicted annual revenue growth of 10 percent, with earnings per share of 35 cents to 40 cents.
Wire reports contributed to this article.