MedImmune Shares Under the Weather
MedImmune (MEDI) has been pushing hard in recent years to grow sales of its FluMist nasal-spray vaccine and its respiratory virus antibody Synagis. But the biotech announced quarterly results on Feb. 7 that disappointed the market's hopes.
To be sure, the Gaithersburg (Md.)-based company posted a profit of $120.7 million during the three months ended Dec. 31, compared to a loss of $22.4 million during the same period last year. "During 2006, we made major progress in building key aspects of our business to be prepared for the substantial growth we have projected for 2007 through 2009," CEO David M. Mott said in a press release Feb. 7.
But the mean analyst estimate had been for the company to post total revenue of $555.5 million during the quarter, according to the San Francisco research firm StarMine. Instead MedImmune's total revenues increased 7% year over year to $529 million during the quarter.
"Sales of Synagis and Flumist were both disappointing, in our view, despite enhanced marketing efforts," Standard & Poor's equity analyst Paul Starsia said in a research note. (S&P, like BusinessWeek.com, is owned by The McGraw-Hill Cos.) Starsia downgraded the stock to sell from hold.
Investors sold the stock 9.1% to $30.90 per share on the Nasdaq Feb. 7.
MedImmune is no stranger to making a comeback. When the company debuted its much-anticipated FluMist nasal-spray vaccine a few years ago, critics said the price was high, it had to be stored in special freezers, and the Food & Drug Administration approved it only for those between the ages of 5 and 49. MedImmune went back to the drawing board and developed a new product, CAIV-T, which can be stored in refrigerators (see BusinessWeek.com, 10/18/04, "MedImmune's Second Shot at the Flu").
Now Medimmune finally announced on Jan. 8 that the FDA has approved the new refrigerated formulation of FluMist for use in helping to prevent influenza in healthy children and adults from 5 years to 49 years of age. Time will tell what happens to sales once the new product is available for the 2007-2008 influenza season.