MedImmune Inc. reported a wider third-quarter loss than last year, due in part to research and development expenses that increased as the company began a pivotal Phase III trial of CAIV-T, its refrigerator-stable intranasal influenza vaccine.

MedImmune, which took the first intranasal flu vaccine to the market a year ago but had disappointing sales, expects its next-generation product to live up to the promise FluMist (influenza virus vaccine live, intranasal) failed to meet. And in light of the ongoing flu vaccine shortage, look for the Gaithersburg, Md.-based company's profile to benefit, as well as that of CAIV-T (cold adapted intranasal influenza vaccine, trivalent).

The head-to-head study will compare the safety and relative efficacy of CAIV-T to the injectable flu shot, TIV (trivalent influenza vaccine), during this flu season. It will involve about 7,000 children between the ages of 6 months through 59 months who will be randomized one-to-one to receive either CAIV-T or TIV, but all participants will receive both an intranasal mist and an intramuscular injection, one of which will be placebo.

"CAIV-T is based on the virus strains that we used for FluMist, but it goes through a slightly different manufacturing process that makes it refrigerator stable," John Filler, MedImmune's manager of investor relations, told BioWorld Today. "Wyeth had been working on this for a number of years, and had it in about 15 Phase II and III trials outside the U.S. in about 30,000 patients."

Specific findings from one study in 2,200 patients, who ranged in age between 6 months and 71 months, showed that those receiving CAIV-T had a flu rate of about half that of those who were injected with the regular flu shot. Results from another study in 2,200 patients, whose age ranged between 6 and 17 years old, showed that CAIV-T produced a 35 percent lower flu rate compared to the injectable vaccine.

"We're trying to do something similar where we show that [CAIV-T] is better," Filler said in describing the new study's primary endpoint. The trial also is designed to evaluate whether the drug has any effect on asthma and wheezing, an effect observed in a FluMist study that prevented MedImmune from having the product labeled for children younger than 5 years old.

The current FluMist label, in which the product is indicated for people between 5 and 49 years old, would apply to CAIV-T. The company plans to have an expanded label, good for patients between 6 months and 49 years old, for the 2007-2008 flu season.

MedImmune also said it completed enrollment in a bridging study designed to establish that CAIV-T is equivalent to the frozen FluMist formulation. The company also continues to conduct a number of post-marketing and safety studies of FluMist.

Collectively, all the new and ongoing flu product studies and others relating to Numax and Vitaxin led to increased research and development expenses during MedImmune's three-month period ended Sept. 30. The company had $73 million in such costs, up from $54 million a year earlier.

In the fourth quarter, MedImmune plans to begin a Phase III trial of Numax, its next-generation product for respiratory syncytial virus. The multinational study will test the drug in a head-to-head comparison with Synagis (palivizumab), the company's marketed RSV product. It will include 5,750 patients and last over the course of two Northern Hemisphere winters.

Vitaxin is in Phase II studies for metastatic melanoma and prostate cancer. Data from the melanoma trial are expected later this year, while findings from the prostate cancer study are expected late next year.

Overall in the period ended Sept. 30, MedImmune reported a net loss of $65 million, or 26 cents per share. The EPS figure was higher than consensus estimates of a 21-cent-per-share loss for the quarter, and also an increase over last year's third-quarter figures of $16 million, or 7 cents per share.

"[The loss] is related to all of the clinical programs that we have ongoing," Filler said. "And the Phase IIIs, of course, are more expensive. That's the biggest impact."

Total revenues fell this quarter compared to a year ago, down to $93 million from $99 million. The higher figure from a year ago included $17 million in other revenues, comprised primarily of milestone and other payments for FluMist from Madison, N.J.-based Wyeth, the company's former co-promotion partner for the vaccine. FluMist's revenues totaled $33 million thus far this year; MedImmune has all rights to FluMist as a result of the dissolution of its agreement with Wyeth, but would owe Wyeth royalties on eventual CAIV-T sales.

In connection with the relationship's dissolution, MedImmune identified charges that would affect its results for the remainder of this year, including estimated costs associated with the impairment of intangible assets and acquired in-process research and development, as well as technology transfer and transition expenses. (See BioWorld Today, April 28, 2004.)

Filler said MedImmune is manufacturing up to 2.1 million doses of FluMist this year, adding that the FDA has released 1.1 million doses already. The company upped sales guidance to 1 million to 2 million this year, well over last year's figure of 400,000. The product's cost is about half of last year's, when its price was $46 per dose. This year it costs $23.50 per returnable dose and $16 per non-returnable dose, which Filler noted is comparable to the $12 price of the flu shot from Aventis Pasteur Ltd., of Lyon, France.

On the positive side of MedImmune's earnings, third-quarter product sales increased 12 percent to $92 million compared to last year, primarily due to a 25 percent increase in sales of Synagis to $61 million. Sales of Ethyol (amifostine) increased 4 percent to $21 million.

Looking ahead in terms of financial guidance for the year, MedImmune projected its revenues would range from $1.11 billion to $1.15 billion. It predicts Synagis will increase about 10 percent, Ethyol will stay comparable to last year and FluMist revenues should be between $45 million and $57 million.

Cash and marketable securities totaled $1.6 billion at the end of the quarter, at which time the company had about 249 million shares outstanding.

On Thursday, its stock (NASDAQ:MEDI) dropped 77 cents to close at $26.40.

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