MedImmune CEO about flu

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November 07, 2006|By New York Times News Service

David M. Mott, the chief executive officer of MedImmune, returned recently from a week on the road with his sales staff. Top on everyone's mind is the flu season.

MedImmune's nasal spray to fight the flu, FluMist, became well-known two years ago amid nationwide vaccine shortages. But the Gaithersburg company also is heavily marketing Synagis, its best-selling drug to prevent viral pneumonia in high-risk infants. Mott discussed those two products, plus legal issues and growth.

Following are excerpts:

Will there be flu shots and FluMist for everyone who wants it this season?

I'm pretty confident there'll be an adequate supply because of the tremendous progress we've made in accelerating our supply chain. This year we began shipping our flu vaccine in July, and by mid-September all of this year's supply had been released by the Food and Drug Administration, so all of our product is available to customers now.

After the 2004 shortage, you have more competition. How does that affect MedImmune?

Really not very much because our strategy all along has been to develop a totally unique vaccine, which is a more effective way to prevent influenza and is administered in a needleless spray.

What is your plan for FluMist - which right now is restricted to those age 5 to 49 (because it is a live virus), which eliminates the youngest and oldest who are often flu victims?

We began developing CAIV-T, which is a refrigerated stable version, in 2004, and we hope to launch it for the 2007 influenza season. We've completed a large clinical study to expand the label below 5 years of age - down to one-year-olds - and we think this has the potential to be a better way to prevent flu in kids.

Have you been able to cut the price per dosage, which has made FluMist more expensive than injections?

Yes, we brought the price down substantially, to around $18 per dose, and our expectation is that we will keep the price the same when we re-introduce the improved version next year.

You have been battling Genentech over the patent for your biggest product, Synagis, which prevents viral pneumonia in infants. This is a fight that reached the Supreme Court in October. What is the heart of the dispute?

It is about whether a license holder has the ability to challenge the validity or enforceability of a patent without breaching the underlying license agreement.

Your revenue for 2005 was about $1.2 billion, and Synagis provided about 85 to 90 percent of that, so this case would seem to be important financially for MedImmune. Can you say how much is involved?

If we were to prevail, potentially we'd no longer be obligated to pay royalties. I'm not at liberty to disclose the amount, but ... it would be a significant benefit.

You raised the price of Synagis quite a bit last summer, and how has that affected sales?

Last summer we introduced an improved formulation that moved from a powder to a new liquid that is much easier to prepare and administer. The price increase has not affected our share of the market.

MedImmune agreed to pay Infinity Pharmaceuticals Inc. as much as $500 million for a stake in cancer treatment it is developing. How does this fit strategically?

The challenge for us is to build a pipeline of next generation products, and the Infinity alliance is the newest addition to our oncology portfolio. We have now gone through a period over the last five to six years where we have increased our investment in research and development from about $60 million a year back in 2000 to approximately $400 million a year now. We have taken our products development staff from 180 people to just under 1,000.

All that investment is focused around driving the company into a new phase of revenue and earnings growth, which we suspect is going to begin in 2007. The first thing that is going to drive it is our HPV cervical cancer vaccine technology, for which we are now beginning to receive royalties and milestone payments. It is being commercialized by our partners, Merck and GlaxoSmithKline, but the early work was right here at the MedImmune labs.

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