Status of Saatchi on $40 Million Account Still Unknown

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DETROIT ( -- MedImmune today said it will continue producing troubled nasal flu vaccine FluMist, despite slumping sales and the possibility of a $75 million write-off if Wyeth bows out of a co-marketing agreement on the drug.

David Mott, president-CEO of Gaithersburg, Md.-based MedImmune, said during a financial presentation that discussions with Wyeth regarding the commercial and product development plan for FluMist remain ongoing. No final decisions have been made regarding price, production or Wyeth's role for 2004 and beyond.

Deal ends 2014
Under the current agreement, Wyeth's co-development and co-promotion rights in the U.S. revert to MedImmune in 2014. Should Wyeth exit the partnership earlier than 2014, MedImmune would write-off approximately $75 million and assume responsibility for all future investment. Excluding the one-time write-off, MedImmune projects Wyeth's exit from the partnership would lower earnings by 10 to 20 cents per share through 2007.

Mr. Mott said 2004 sales and earnings for the company will fall below analyst estimates due to a larger investment in research and development.

Saatchi & Saatchi
Still unknown is whether Publicis Groupe's Saatchi & Saatchi, New York, will retain the $40 million creative duties on FluMist. Mr. Mott last month said that "everything is on the table" when it came to evaluating FluMist's future, but he did not make mention of the account during the morning presentation. A MedImmune spokesman said the marketing and advertising on the product was still Wyeth's call as long as Wyeth remains in the partnership.

A Wyeth spokesman said, "We are still evaluating the marketing of this product. Beyond that, I cannot comment."

Despite FluMist's flop -- more than 3 million doses of the product had to be destroyed, even with a heavy flu outbreak and the shortage of traditional flu shots this winter -- Mr. Mott was emboldened by late-stage, clinical trials that show a new refrigerator-stable version of FluMist was statistically more effective than a flu shot in preventing culture-confirmed influenza.

Reaching more patients
MedImmune will also spend the next two years redeveloping FluMist so that it may receive Food and Drug Administration approval for use in patients under the age of 5 and older than 49. Part of FluMist's flop was that it was not approved for toddlers or senior citizens, the two age groups most susceptible to the flu.

FluMist also cost an average of $46 a dose, more than three times what a traditional flu shot costs.

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