Maryland flu vaccine maker gets boost from competitor

News that a competing flu vaccine maker is suspended from shipping doses to the United States on the eve of flu season drove MedImmune Inc.'s stock up 6 percent yesterday, but analysts don't expect the suspension to buoy the Gaithersburg-based drug maker's profits in the long term.

MedImmune's common stock closed at $25.78, the highest it has been at closing since February.

The British regulatory agency suspended Chiron Inc.'s manufacturing license for three months at its Liverpool plant, a move that stops the company from releasing any of the 46 million to 48 million doses of Fluvirin it planned to send to the United States for the flu season, which begins this month.

The suspension sparked concerns of vaccine shortages yesterday. In Maryland, the Anne Arundel Department of Health said it will cancel all of its flu clinics.

Although MedImmune's signature drug is a nasal spray flu vaccine for use in 5-to-49-year-olds, the company said it will not increase production of its FluMist to help fill the gap.

A spokeswoman for the company said it cannot produce more than the 1 million to 2 million doses it had planned to make for this year's flu season because the production cycle is months-long.

Analysts say the looming vaccine shortage could boost demand for the spray that performed dismally when it debuted last year - only about a half million of the 4 million doses produced sold.

The lackluster launch prompted a May breakup between MedImmune and its FluMist co-marketer, Pennsylvania-based Wyeth Pharmaceuticals.

But even a blockbuster flu season will have a minimal effect on the company's bottom line.

If the company sells all 2 million doses at $23.50 each, total revenue for the drug is $47 million, only 4 percent of the company's total projected revenue, said Philip Nadeau, an analyst with SG Cowen.

This really doesn't help them out. On top of that, the price they're selling it at this year is low, he said. It's good for sentiment around MedImmune stock because FluMist had such a bad year last year. Everyone has kind of forgotten about the product. Maybe the buzz will get people thinking about it again.

Even in the context of a vaccine shortage, another analyst, Mark Karvosky of Piper Jaffray, does not expect FluMist sales this season to top 1 million doses.

The Wall Street Journal is reporting a tiered vaccine recommendation. You may see healthier people who want to get vaccinated migrate toward FluMist, said Karvosky. But the way we're looking at it is longer term. We have a long-term view on FluMist.

Now that the company knocked down the price from $46 to $23.50 per dose to better compete with conventional flu shots, which cost about $8, analysts are anxious to see MedImmune expand the spray's label to include infants and older adults, the groups most at risk from the effects of the flu, and to gain approval for a refrigerated version of the drug.

The current vaccine must be stored frozen.

MedImmune reported a net loss of $100 million, or 40 cents per share, for the second quarter ended June 30 on revenue of $94 million.

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