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MedImmune Has A Higher Loss In Third Quarter

By Michael S. Rosenwald
Washington Post Staff Writer
Friday, October 22, 2004; Page E05

MedImmune Inc. reported a third-quarter loss yesterday, despite $61 million in sales of its lead product, Synagis, a 25 percent increase over the same period a year ago.

The Gaithersburg biotech company reported a third-quarter loss of $65 million (26 cents a share), up from a loss of $16 million (7 cents) in the corresponding quarter a year ago.

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Revenue for the quarter was $93 million, down from $99 million last year, despite the increased sales of Synagis, which prevents certain viral infections in babies.

MedImmune has become best known for FluMist, its nasal flu vaccine. The company said it expects an extra $10 million in revenue this flu season from FluMist because of the shortage of traditional flu shots.

Before manufacturing problems wiped out about half of the U.S. vaccine supply, the company had said sales of the flu vaccine in spray form would not exceed 450,000 doses, the amount sold during last year's disastrous launch, which would have generated sales of about $35 million to $45 million.

During yesterday morning's conference call on its earnings, executives of the Gaithersburg company said they expect to sell 1 million to 2 million doses this flu season. But late in the day, MedImmune chief executive David M. Mott appeared alongside Health and Human Services Secretary Tommy G. Thompson as he announced MedImmune now expects to produce 3 million doses for this flu season.

Nonetheless, Mott said in an interview that he would not change the company's projection of $45 million to $57 million in sales, which was based on selling no more than 2 million doses. He cited uncertainty over how many additional doses will actually reach the marketplace.

Regardless of the final sales figure, MedImmune made clear it expects FluMist to be a money-losing product this flu season. After cutting the price in half to $23.50 per dose, MedImmune would need to sell 6 million to 8 million doses just to break even, Mott said in the conference call, and it's too late to produce that much.

Earlier this year, MedImmune and pharmaceutical giant Wyeth ended a partnership to market FluMist. Expenses from dissolving the arrangement contributed to the quarterly losses.

MedImmune's research and development costs soared from $54 million in last year's third quarter to $73 million this year for a new version of FluMist that it hopes could be marketed more broadly by 2007. The current vaccine is approved only for healthy people ages 5 to 49.

Mott said the company is waiting for guidance on the vaccine market from federal health officials before deciding to increase production of FluMist for next year.

Shares of MedImmune closed yesterday at $26.40, down 77 cents.


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