MedImmune Inc. announced Wednesday that it will earn up to$30 million from a U.S. marketing and development alliancewith American Cyanamid Co.

MedImmune (NASDAQ:MEDI) of Gaithersburg, Md., will sharetwo of its products being developed for respiratory syncytialvirus (RSV), a leading cause of potentially fatal pneumonia andbronchiolitis in infants. Cyanamid (NYSE:ACY) will contribute avaccine it is developing for RSV and Zosyn, an antibiotic beingdeveloped for intravenous use by its Lederle LaboratoriesDivision.

Already available overseas, Zosyn is expected to receive approval later this year. A combination ofpiperacillin, a semisynthetic penicillin, and tazobactam, a beta-lactamase inhibitor, the drug has potent activity against aerobicand anaerobic Gram-positive and Gram-negative organisms.

MedImmune filed a product license application (PLA) inJanuary for use of its polyclonal antibody Respivir to preventRSV disease in children. The company is also developing asecond-generation monoclonal antibody that is part of theagreement. Cyanamid's Lederle Praxis Biologicals division hasbeen working for almost 10 years on a third-generationproduct, a vaccine for RSV disease which is in clinical trials,said David Mott, MedImmune vice president of businessdevelopment and planning.

Besides collaborating on the RSV products, the companies planto co-promote in the U.S. all four products subject to theagreement. MedImmune would book sales for Respivir and theRSV monoclonal antibody product, and Cyanamid wouldaccount for sales of Zosyn and the RSV vaccine.

"It's a sign of the maturation of the industry overall," Mott said,"that we are co-promoting a pharmaceutical company'sproducts."

Although MedImmune didn't initially seek a U.S. partner, Mottadded, the companies made overtures to each other because oftheir work in RSV products. The companies intend to share RSVproduct development costs and profits.

"We expect this alliance to enhance our market presence," saidWayne Hockmeyer, MedImmune's chairman and chiefexecutive officer. He added that the cash from Cyanamid willfund Respivar's inventory and market development, as well asfuture RSV compounds.

"It looks like a winner for both companies," said MontgomerySecurities analyst Brandon Fradd, adding that he expects to seemore such co-promotion agreements in which partnersmutually expand marketing rather than give away rights.

MedImmune in December reacquired worldwide marketingrights to CytoGam, its immune globulin preparation to preventcytomegalovirus in kidney transplant patients, and thefollowing month marshaled a 15-person U.S. sales force thathas been presenting the product to the country's 280transplant centers.

The CytoGam detail force will add Zosyn to its portfolio, gainingmore leverage and credibility, Mott said. MedImmune expectsto expand its Zosyn co-promotion over time.

The commitment for the smaller company to keep a marketingforce is one of the more notable aspects of the deal, Mott said.

Meanwhile, Cyanamid will help Respivir penetrate the marketby co-promoting this product to pediatric offices and hospitalsthrough Lederle's force of more than 1,000 salesrepresentatives.

Severe RSV disease occurs most frequently in children underthe age of 2 and causes more than 91,000 hospitalizations and4,500 deaths each year in the U.S. Children with pre-existingconditions, including lung or heart disease, premature birth orimmunosuppression, are at significantly increased risk.

There is currently no approved product to prevent RSV diseasein the U.S. MedImmune has started two Phase II/III trials todetermine Respivir's efficacy in treating the disease.

Shaman Pharmaceuticals Inc. (NASDAQ:SHMN) of San Carlos,Calif., has completed a challenge study in healthy male adultswho were given RSV and treated with the anti-viral compoundProvir. Another competing RSV treatment is the anti-viralribavirin, by ICN Pharmaceuticals (NYSE:ICN) of Costa Mesa,Calif.

The terms of the MedImmune/Cyanamid alliance, spelled outin a letter of intent, have been approved by the boards ofdirectors of both companies but are subject to negotiation andexecution of definitive agreements.

MedImmune's stock picked up $3.25 a share on Wednesday,closing at $22.

-- Nancy Garcia Associate Editor

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