MedImmune Reaches for a Blockbuster

The strategic reasoning for MedImmune Inc. 's $1.5 billion acquisition of Aviron is obvious: Maryland-based MedImmune is currently generating some $500-600 million a year from Synagis (pavilizumab), an antibody treatment for respiratory syncitial virus that predominantly affects infants and children. But the drug's growth is slowing, and although MedImmune has been steadily building its pipeline through acquisition, the firm has no near-term follow-up. Acquiring Aviron brings it a product—FluMist, a nasally inhaled influenza vaccine—that could receive FDA approval in time for the 2002 flu season. The vaccine fits nicely with MedImmune's established strengths in pediatric medicine and infectious respiratory disease. Moreover, FluMist has the potential to be a blockbuster product. Because it's formulated as a nasal spray rather than an injectable, the drug could expand flu immunization beyond the traditional high-risk population of the very young, the very old, and immunosuppressed people, to all healthy individuals.

MedImmune is betting that FluMist can become a truly big product, fast. The firm expects the vaccine will generate $500...