Markets
Hot Stock? Only the Nose Knows
A nasal flu vaccine generates good news for patients who hate needles and a mixed outlook for investors.
From Kiplinger's Personal Finance magazine, December 2003
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While needle-phobes are getting their first whiff of FluMist, a nasal-spray flu vaccine, analysts sniffing out investment opportunities are adopting a wait-and-see attitude toward MedImmune, which makes the vaccine.
In a sector noted for its volatility, "MedImmune is one of the more profitable biotech companies," says John McCamant, editor of the Medical Technology Stock Letter, and it is making the transition to biopharmaceutical firm. The company has launched a $25 million ad campaign and is giving 10% discounts to companies that offer FluMist to their employees. MedImmune's stock rose earlier this year following the vaccine's approval by the Food and Drug Administration. At $32 a share recently, it is trading in the middle of its 52-week price range.
But further price appreciation depends heavily on FluMist's success, and that isn't guaranteed. So far the FDA has approved the vaccine only for healthy individuals between the ages of 5 and 49. That excludes preschool children and the elderly, who are prime candidates for flu shots. FluMist, which is administered at pharmacies and doctors' offices nationwide, costs between $46 and $55 per dose, compared with $10 to $25 for a regular flu shot.
If strong sales make short work of the 4.5 million doses available this season, MedImmune's share price could pick up later this winter. Otherwise, don't expect much price movement until next flu season. The company hopes to build demand for the vaccine over several years. --C.S.