MedImmune Inc. agreed to produce 3 million doses of its FluMist spray flu vaccine this season with the encouragement of federal health officials, but now it appears the company may sell only one-third that number of doses.
The estimate that the Gaithersburg company will sell about 1 million doses this year, released yesterday by investment bank Lazard Freres & Co., points to another in a string of setbacks the Gaithersburg company has faced in trying to persuade Americans to adopt a nasal spray alternative to the standard flu shot.
"It's really shocking," said Scott Gottlieb, a former senior policy adviser at the Food and Drug Administration who studies the vaccine market at the American Enterprise Institute. "It surprises me that they can't peddle 3 million doses. You've got to figure there were 3 million people who couldn't get the flu shot who would try to get FluMist."
Jamie Lacey, a MedImmune spokeswoman, declined to comment yesterday, saying the company does not comment on analysts' reports and will not detail sales figures until it announces its quarterly earnings.
The company launched FluMist last season with a $25 million ad campaign. But many doctors and patients balked at its price, and federal regulators did not allow the company to market the vaccine to children under age 5, a key market because it could spare children painful injections. Despite a particularly aggressive flu season, FluMist did not catch on with consumers.
After selling fewer than 500,000 of 4 million doses, MedImmune said it would produce only 1 million to 2 million doses for this flu season, and it cut the wholesale price from $46 to $23.50 a dose. But in October, Chiron Corp. announced that it couldn't ship nearly half of the U.S. flu shot supply because of manufacturing problems in England.
Federal health officials scrambled to find more vaccine, advising healthy people to avoid the flu shot and encouraging them to use FluMist.
The opportunity seemed a good one for MedImmune because its vaccine is approved only for healthy people ages 5 through 49. Later that month, chief executive David M. Mott met with Tommy G. Thompson, secretary of the Department of Health and Human Services. They announced that MedImmune would make 3 million FluMist doses available to help stem the shortage.
But the company appears to have sold far less because of a mild start to the flu season and waning demand for flu vaccinations, particularly among the healthy adults who can use FluMist.
Walter A. Orenstein, former director of the National Immunization Program at the Centers for Disease Control and Prevention, said the public may have been confused -- hearing the agency's message that healthy people should avoid flu shots but not its advice that they could turn to FluMist instead.
"It was the right message, but a really difficult one to convey," said Orenstein, now associate director of the Emory Vaccine Center in Atlanta. "With the discouragement of healthy people from getting the vaccine, it appears many took that as the basis for not getting any vaccine."
CDC officials said yesterday that the percentage of healthy people vaccinated this flu season had fallen to 4.4 percent from 23.9 percent a year ago.
Bill Pierce, a Department of Health and Human Services spokesman, said yesterday, "We acted to make sure we were prepared." He said the flu season typically peaks between December and March so there is still plenty of opportunity for people to seek flu vaccines.
To come up with its estimate, Lazard Freres contacted 121 physicians and pharmacies in 60 major metropolitan areas that MedImmune had listed as ordering FluMist last year or this year. A majority said they had either not ordered FluMist this season or were left with unused doses.
Joel Sendek, a Lazard analyst who downgraded MedImmune stock yesterday from "hold" to "sell," said that only 4,031 doses of FluMist were ordered by those surveyed. Sendek calculated total sales using methods from his survey last flu season, which accurately predicted FluMist sales. His new calculation is supported, he said, by federal health statistics showing that only 1.6 percent of all vaccinated adults surveyed have received FluMist.
"I was surprised," Sendek said. "I really thought MedImmune was in a good position this year."
Regardless of the final sales this season, MedImmune executives have made it clear that they do not expect FluMist to be a significant part of the company's business until they get a new version on the market, not likely until 2007.
The new version would be refrigerated, rather than frozen, eliminating storage problems. And MedImmune is conducting several studies to show that FluMist works better than a flu shot, particularly in children under 5, which could persuade the FDA to permit its use for that age group.
Shares of MedImmune closed yesterday at $25.25, down $1.12, or 4 percent.
