A Turnaround for MedImmune
Biotech Firm Swings to Profit as Sales Surge and FluMist Costs Fall
By Michael Barbaro
Washington Post Staff Writer
Friday, July 25, 2003; Page E05
MedImmune Inc., the Gaithersburg biotechnology company that developed the first nasal flu vaccine, reported a profit for the second quarter as revenue soared, thanks to increased sales of its two leading drugs.
The company said it earned $13.5 million (5 cents per share) for the quarter, compared with a loss of $29.5 million (12 cents) a year earlier, when the company shouldered higher research-and-development costs tied to its nasal-spray flu vaccine, FluMist.
For the quarter ended June 30, MedImmune's revenue jumped 85 percent, to $117.8 million, from $63.7 million a year earlier. Sales of Synagis, a treatment for infant lung infections, grew 69 percent, to $55 million, while sales of the cancer drug Ethyol increased 49 percent, to $25 million. MedImmune booked an additional $28 million in revenue from its partners for obtaining regulatory approval of FluMist and for exceeding $100 million in end-user sales of Synagis.
MedImmune, already one of the world's biggest and wealthiest biotechnology companies, is poised for considerable growth. For the full year, the company forecasts net income of up to 89 cents per share on revenue of up to $1.15 billion. In the past year, the company added 40 employees to its sales and marketing force responsible for Synagis and FluMist.
In something of a surprise, chief executive David M. Mott revised downward the number of FluMist doses MedImmune will produce for the 2003-2004 influenza season, from between 4 million and 6 million to between 4 million and 5 million doses, saying the higher number would have required perfect timing after federal approval of the vaccine. The company still forecasts FluMist-related revenue of $120 million to $140 million this year.
Shares of MedImmune closed yesterday at $39.03, down $1.07.
MedImmune and its partner, Wyeth, will spend $50 million to market FluMist in advance of this year's flu season, which begins in September. Of that, $25 million will be spent on direct-to-consumer marketing, an unusual tactic for vaccines.
The marketing campaign, set to include television and print advertising, will focus on the health risks of the flu and the convenience of FluMist, which is squirted into the nose rather than injected in the arm. It is approved for people between the ages of 5 and 49.
But price remains a potential barrier to consumer adoption. At $46 per dose before markups by retailers, FluMist costs at least twice as much as the traditional flu shot. "The main burden for MedImmune is to convince people they need to spend that much more," said Stefan D. Loren, an analyst at Legg Mason Wood Walker.
So far, Mott said, MedImmune's "marketing messages have been well received" by doctors and pharmacists, who will administer the vaccine and could, in many cases, recommend it to needle-shy patients. Mott himself became the first customer to be vaccinated with a commercialized version of FluMist, which has been used by thousands of patients as an experimental drug in patient tests. |
