With an eye to boosting future profits, Gaithersburg's MedImmune Inc. said yesterday, it spent $10.25 million to pay off two patent holders for its new drug to treat potentially life-threatening respiratory infections in infants.
In developing Synagis, which is under review by the Food and Drug Administration, the company used 10 patented technologies. Under licensing agreements, MedImmune was to pay each patent holder about 1 percent or 2 percent of future sales.
MedImmune made the payments to the two patent holders in lieu of giving them a share of future profits. The company declined to say who holds the patents or how much each received.
The drug is aimed at preventing a respiratory syncytial virus disease that causes pneumonia and bronchitis and is especially serious for premature infants. According to MedImmune, 4,500 children in the United States die of the disease every year and 85,000 are hospitalized for it.
"If [Synagis] is licensed by the FDA, then this will be a deal well worth doing," said Mark Kaufmann, MedImmune's associate director of strategic planning and investor relations. "If the FDA believes this is a safe and effective drug, then it would be a major advance in the medical care of premature infants."
Wall Street apparently has high hopes for FDA approval: MedImmune's stock rose $3 yesterday to close at $50.75 a share.
"I think it's a great move," said Caroline Copithorne, a biotechnology analyst at Prudential Securities Inc. "People are very confident. The only negative is that it cuts back on earnings this year, but I don't think that's what people are focused on."
MedImmune had been expected to post a profit of about $15 million this year, Copithorne said. Annual sales of Synagis are expected to reach more than $300 million by 2000, she said.
That's especially good news for the 10-year-old company, one of Maryland's first biotechnology start-ups to become profitable.
After 21 quarters of losses, fourth-quarter earnings last year were $3.3 million. This year, first-quarter earnings rose to $13.2 million, compared with a $14.3 million loss in the same quarter of last year.
MedImmune, which has about 450 employees in Maryland and 50 salespeople nationwide, produces CytoGam, for prevention of a disease seen in kidney-transplant patients, and RestiGam, which, like Synagis, treats respiratory infections in children.
The company is building a production plant in Frederick.
If the FDA approves Synagis, Kaufmann said, RestiGam sales will decrease dramatically, but the marketplace overall will expand.
Pub Date: 6/17/98