By Debbie Strickland
With almost $450 million in the bank as of June 30 and an established pediatric sales force, MedImmune had many options for advancing a new Streptococcus pneumoniae vaccine technology. The company opted for an outlicensing deal with SmithKline Beecham Biologicals.
SB Biologicals agreed to pay up to $30 million in up-front and milestone payments for worldwide rights to the preclinical technology. MedImmune also will receive royalties on any sales. The companies already are collaborating on a human papilloma virus vaccine in Phase II testing under an $85 million agreement signed in December 1997.
"We like working with them - they're a good partner and they get things done," said Lori Weiman, spokeswoman for MedImmune. "They are experts in this particular field [S. pneumoniae] of vaccine development. We did what we do best, which is identify the proteins."
According to the Centers for Disease Control, S. pneumonia infections each year cause an estimated 2,600 meningitis cases, 63,000 bacteremia cases, 100,000 to 135,000 hospitalizations for pneumonia and 7 million otitis media cases. Children under 2 and adults over 65 are at the highest risk for pneumococcal infection.
"You'll find that most physicians will treat a lot of these conditions with the old faithful - antibiotics," said Alan Chandler, a spokesman for Rixensart, Belgium-based SB Biologicals. He said the company has a preventive S. pneumoniae vaccine already in Phase II trials.
In addition to disclosing its latest deal, MedImmune also reported second-quarter results after the market closed Wednesday. The loss per share of 4 cents was a penny more than Wall Street's consensus estimate, but analysts for the most part took the news in stride, noting that revenue growth is strong at nearly 60 percent. Dain Rauscher Wessels, however, downgraded the stock from strong buy to buy, a move that helped send the shares down by about 10 percent.
MedImmune's shares (NASDAQ:MEDI) closed Thursday at $60.375, down $7.12.
For the quarter, MedImmune's revenues totaled $29.5 million, a 59 percent gain over the same period last year. MedImmune's second-quarter numbers, however, are less meaningful than first- and fourth-quarter totals because those are the seasonal peak periods for sales of the company's top product, Synagis, a monoclonal antibody for prevention of serious lower respiratory tract disease caused by respiratory syncytial virus in pediatric patients at high risk for RSV disease. Synagis sales for the 1999-2000 season totaled $359 million, up 58 percent over the product's launch season in 1998-99.
In 2000-01, sales likely will grow further as the product has its first full season on the European market. MedImmune sells Synagis in the U.S., and partner Abbott Laboratories has rights elsewhere.
Sales of two other key products, CytoGam and Ethyol, jumped 70 percent compared to the second quarter of 1999. CytoGam is marketed as prophylaxis against cytomegalovirus disease associated with transplantation of the kidney, lung, liver, pancreas and heart. Ethyol is an intravenous cytoprotective agent marketed to protect some cancer patients against side effects of cisplatin and radiation.
MedImmune's second-quarter loss totaled $8.8 million, vs. income of $30.7 million in the second quarter of 1999. Factors affecting the bottom line included increased cost of goods, costs associated with increased marketing activities and one-time legal expenses. For the first half of 2000, revenues hit $227.8 million, up from $154 million, and earnings were $49.2 million, down from $56.4 million.