By Karen Bernstein
BioWorld Staff

Investors sheared 20 percent off MedImmune Inc. shares on Thursday, in what analystsdescribed as an overreaction to its announcement that sales of CytoGam would be lower thanexpected this year.

At the annual shareholders meeting, Wayne T. Hockmeyer, president and CEO, saidMedImmune does not expect to ship any additional product to distributor ConnaughtLaboratories this year after completing scheduled product deliveries in the secondquarter. Connaught is working down CytoGam inventories.

The stock (NASDAQ:MEDI) closed at $22.75, down $5.75 on Thursday.

The Gaithersburg, Md., company still expects 1992 revenues to be 20 percent above the1991 figure of $14 million, said David Wright, executive vice president. That would bebelow analyst estimates of about $19 million and $21 million, he said.

The company attributed decreased sales of CytoGam, which is approved to treatcytomegalovirus (CMV) in kidney transplant patients, to competition from off-label use ofSyntex Corp.’s ganciclovir anti viral.

A full course of CytoGam therapy costs $8,000 to $9,000, compared with about $2,000 to$4,000 for ganciclovir, Wright told BioWorld.

Bear Stearns analysts Joseph Riccardo and Jami Rubin lowered their CytoGam salesprojections to $2.5 million from $7 million Product sales were $5.6 million in 1991.

MedImmune has recently entered the clinic with CytoGam for use against CMV in AIDSpatients. The drug won’t face the same competition for that indication, said Wright,because ganciclovir can’t be taken with AZT.

“The key is that everything else at the company is on track and we’ll stillbe profitable,“ Wright said. MedImmune has more that $50 million in cash and willbring in research revenues from two AIDS agreements with Merck and an agreement withConnaught to develop four infectious disease vaccines.

MedImmune still expects to increase R&D spending this year by 60 percent of the1991 figure of $7.7 million.

“The investment story in MedImmune is not CytoGam, which is a smallproduct,“said Smith Barney analyst Denise Gilbert.

The Bear Stearns analysts concurred. “We continue to rate MEDI a buy because ofthe company’s near-term product Hypermune RSV, diverse product pipeline, experiencedmanagement and strong financial resources,“ Riccardo and Rubin wrote.

Gilbert expects the company’s Hypermune-RSV, which targets the $375 million U.S.market for respiratory syncytial virus, to win approval in 1994. MedImmune plan to file aProduct License Application in September.

She also projects 1995 approval of MEDI-488, the anti-HIV monoclonal antibody indevelopment with Merck. The first chimpanzee studies of the drug are scheduled to beginlater this month.

MedImmune also said it plans to file in the second half of the year to begin trial ofB-19 Parvovirus vaccine, and hopes to file for its BCG-Lyme disease vaccine late this yearor early in 1993.

Bear Sterns forecasts 1992 earnings of about 11 cents to 12 cents, compared with 11cents in 1991.

Gilbert lowered her 1992 earnings estimate to 7 cents from 16 cents.

The stock has been one of the high flyers of the biotech group. After going public at$9.25 last May, it hit a high of $53.50 in November as part of the market’s romancewith companies developing AIDS products, Rubin said.