Astrazenecas Vaccine Buy May Yield $2.3 Billion Windfall
AstraZeneca is testing the nasal-spray technology used in MedImmunes seasonal flu vaccine FluMist, for a new product to tackle swine flu, also known as the H1N1 virus. FluMist, which is only approved in the U.S., generated only $104 million last year, compared to 736 million euros ($1.05 billion) rival Sanofi-Aventis SA brought in from its flu shots.
London-based AstraZeneca expects to produce 200 million doses of the vaccine by March, potentially garnering sales of $2.3 billion over 2009 and 2010, according to Jefferies International Ltd. That would make the spray one of the best- selling products for MedImmune, helping to counter concerns by investors that AstraZeneca overpaid for the U.S. company at $15.2 billion in 2007.
“This puts MedImmune in a better light and helps pay back some of that $15 billion,” Jeffrey Holford, a Jefferies analyst who has an “underperform” rating on AstraZeneca, said in an interview. “This is the first positive surprise thats tangible.”
AstraZeneca, the most exposed European drugmaker to generic competition, trades at about 9.8 times reported earnings, below the 13.6 times for the Bloomberg Europe Pharmaceutical Index. The U.K. drugmakers shares have lost 1 percent this year.
Growing Virus
Rivals including Sanofi and GlaxoSmithKline Plc have found it difficult to cultivate the quantities of virus needed for a swine flu vaccine because the strain didnt initially grow well in chicken eggs. The vaccine makers are scrambling to make the inoculations available as soon as September amid a swine flu pandemic that has sickened more than 182,000 people worldwide as of Aug. 13, according to the World Health Organization in Geneva.
The setbacks may prove an advantage for AstraZeneca because it makes a so-called live attenuated vaccine, which contains weakened forms of a live virus and may require a much lower dose to build up ample immunity. The live vaccines might help extend supplies in any potential shortage and incite a stronger immune response, especially in children, said John Treanor, who helped develop what would later become FluMist at the U.S. National Institutes of Health in Bethesda, Maryland.
Traditional flu shots work by priming the immune system with dead versions of a virus, prompting the body to make customized antibodies to attack it. Live vaccines work faster because virus particles continue to reproduce beyond the initial inoculation.
Live Vaccine
“A live vaccine would be the optimal response to a pandemic,” said Treanor, a professor at the infectious disease unit of the University of Rochester Medical Center in Rochester, New York. “Live vaccines are especially good in children because they normally dont have any built-in immunity. In adults, maybe there wouldnt be as much replication so there wouldnt be as much protection. But with a totally new strain, like a pandemic, the idea is maybe everybody would be like children.”
Treanor, who doesnt receive funding from AstraZeneca, said the nasal sprayer also offers an alternative to the painful prick of a needle.
40 Million Doses
“We really feel that this vaccine could have benefits in various parts of the world and were doing everything we can to make it available,” Kathleen Coelingh, senior director of scientific affairs at MedImmunes vaccine unit, said in an interview.
The drugmaker said last month 40 million doses will be filled into sprayers and ready by March. The product may be available in the U.S. as early as September if government health officials determine a need for emergency use of an H1N1 inoculation before the completion of AstraZenecas clinical tests that start this week. Both FluMist for seasonal flu and the pandemic vaccine could be marketed in Europe by the middle of next year.
While governments havent decided yet how many doses would be needed for MedImmunes swine flu spray, vaccines made by Sanofi, Glaxo, Novartis AG and Baxter International Inc. will probably require two shots given three weeks apart, and the body wont produce antibodies for two additional weeks, according to an Aug. 7 report by the Department of Health and Human Services.
Priority Review
While company spokeswoman Sarah Lindgreen said the 2010 target for the vaccines approval in Europe is “based on average approval timelines,” European regulators said last month that they are giving pandemic vaccines a priority review.
“Under normal circumstances we would wait until the company has all the data together before accepting an application,” European Medicines Agency spokeswoman Monika Benstetter said in an interview. “Now as they are developing the data, they submit that to us, so that kind of rolling review speeds up the process.”