West Coast Editor

MedImmune Inc.'s sale of all rights to CytoGam brings $50 million up front and another potential $70 million in milestone payments for programs more in line with its main focus.

The King of Prussia, Pa.-based ZLB Behring, a subsidiary of the Australian firm CSL Ltd., agreement to buy worldwide rights to the drug means 10 cents to 12 cents more per share this year to MedImmune's bottom line, but other transactions before the end of December might offset the gain, so the company is not revising its financial guidance.

MedImmune's stock (NASDAQ:MEDI) closed Thursday at $32.49, down 83 cents.

Doctors use CytoGam, an intravenous immune globulin enriched in antibodies against cytomegalovirus, to prevent CMV infection during organ transplants. Last week's third-quarter earnings showed sales of CytoGam (and byproducts that result from the manufacturing process) dipped to $8.7 million for the period, compared to $10 million last year, and sales of the product so far in 2006 total $22.7 million, compared to $32.7 million by the end of 2005's third quarter.

"The decrease was attributable to lower sales of CytoGam resulting from plasma supply constraints and the transition to a new third-party manufacturer," MedImmune noted in its third-quarter earnings filing with the SEC.

Kate Barrett, spokeswoman for MedImmune, told BioWorld Today that, "about two years ago, we indicated an intent to move away [from CytoGam]" when a third party took over manufacturing. The deal with ZLB will be accretive to earnings over the next three years if CytoGam sales hit milestone levels, she added.

CytoGam was the first of Gaithersburg, Md.-based MedImmune's four products to reach the market, including the lead seller Synagis, for respiratory syncytial virus, which sold $111.6 million in the third quarter, a rise of 11 percent. FluMist for influenza sold $15.9 million, a 52 percent increase over last year. Ethyol (amifostine) for renal toxicity associated with repeated cisplatin therapy and for xerostomia in patients undergoing postoperative radiation, fell to $22.4 million from $24.7 million last year.

Sun Pharmaceutical Industries Ltd. is trying for a generic version of Ethyol, and MedImmune has filed a lawsuit. But another court case has drawn more attention: MedImmune's challenge of intellectual property (the Cabilly patent) that it licenses from South San Francisco-based Genentech Inc. in order to make Synagis. That case has progressed all the way to the Supreme Court. (See BioWorld Today, Oct. 11, 2006.)

This week, MedImmune offered results from a Phase III trial with Numax, the next-generation Synagis, which proved the new drug's noninferiority in 6,600 infants at risk for RSV. Numax showed a 26 percent reduction in RSV hospitalizations compared to Synagis (p=0.01), with the overall attack rate 1.4 percent for Numax patients compared to 1.9 percent for those who got Synagis.

Brian Lian, analyst with CIBC World Markets in New York, wrote in a research report that Numax "could be a growth driver for MedImmune in the long term, as physicians and payers should view reduced hospital visits positively," although whether the firm will be able to charge significantly more for Numax is not yet clear.

Others working in the CMV space include Vical Inc., of San Diego. In February, Vical started enrolling patients in a Phase II trial of its CMV vaccine in donors and patients undergoing stem cell transplants. The vaccine received orphan designation for stem cell and solid-organ transplants, and that program has been helped by $4.1 million in funding from the National Institutes of Health.

George Fulop, analyst with Needham & Co. in New York, told BioWorld Today that, "as of [the] last earnings call, the number of sites are increasing and enrollment continues to build, but vaccines in the transplant setting require education of both donors and patients in this instance, and will take time to build up a head of steam."

Also Thursday, MedImmune officials said they filed an investigational new drug application with the FDA to start human testing of a cell culture-based seasonal flu vaccine using its live, attenuated, needle-free influenza technology. The filing represents a milestone under the terms of a five-year, $170-million contract with the Department of Health and Human Services. MedImmune uses chicken eggs to make FluMist, as do other makers of flu vaccines, but that method is slow and could lead to shortages. (See BioWorld Today, May 5, 2006.)

The FDA is reviewing a supplemental biologics licensing application to switch formulations from frozen FluMist, currently approved in healthy individuals 5 to 49 years of age, to the refrigerator-stable CAIV-T (cold-adapted flu vaccine, trivalent formulation) of FluMist for the same population. The new formulation could be launched for the 2007-2008 flu season.