FluMist ready for flu shot shortage

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the current flu-vaccine shortage is shaping up as a boon for MedImmune's FluMist, which failed to sufficiently capitalize on last year's shortage.

FluMist, a nasal spray rather than a needle injection, sold only 10% of the 4 million doses it produced last year; the rest were destroyed. But this time, FluMist seems to be in a better position. Not only are 1 million doses frozen and ready to go, but 1.1 million doses were approved by the Food and Drug Administration on Oct. 7. That happened just two days after it was announced that a plant contamination in England would cause the U.S. to come up short on almost half its expected 100 million doses of flu shots.

MedImmune, moreover, cut the cost of a dose of FluMist to $16 for a non-returnable vaccine and $23.50 per unused returnable dose. Insurers such as Blue Cross Blue Shield and Aetna have said they are now likely to cover the cost of the product.

professional marketing

Demand is anticipated to be strong even without consumer marketing. "We expect to have 2 million doses available this year," a MedImmune spokeswoman said, "but we are only marketing on the professional side." Havas' Euro RSCG Worldwide, New York, handles professional advertising of FluMist. Publicis Groupe's Saatchi & Saatchi has the consumer business.

After spending $43 million in measured media on the product last year, and then watching it flop even in the midst of shortage, MedImmune has spent just $266,500 on FluMist through the first six months of this year, according to TNS Media Intelligence/CMR.

The drug was a spectacular collapse for several reasons. It was not made for children under 5 years of age or adults over 49, the two age groups most at risk to get the flu. It was not covered by many insurance companies-a situation that may now be rectified, as was its high price-last year it cost $46 a dose, triple the price of a traditional flu shot.

military matters

Furthermore, FluMist could be looking at a huge boost, not only because of the shortage here, but because of the military. The U.S. has more than 500,000 troops abroad who are traditionally given a flu shot. But since the shortage has forced health officials to ask that only toddlers and seniors be given injections first, the Department of Defense is now considering FluMist as an alternative.

MedImmune's stock was up 5.5% for the week, as several stock analysts noted the shortage will help FluMist establish a beachhead in the market. Morgan Stanley & Co. issued an analyst's report that speculated that "this event may represent a small benefit to the FluMist franchise as patients and physicians gain experience with FluMist."

Other pharmaceutical companies expected to benefit, though not as much as MedImmune, are the Roche Group, maker of TamiFlu, and GlaxoSmithKline, maker of Relenza. TamiFlu comes in pill form; Relenza is a powder that must be inhaled through a device. Both companies plan to increase the supply of their respective flu drugs, which are treatments that cannot be taken until the onset of flu symptoms.

Neither marketer returned calls, but London-based pharmaceutical analyst Alastair Campbell of Smith Barney said he expects to see TamiFlu increase its advertising. Mr. Campbell also said he expected TamiFlu sales to be higher than Relenza.

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