Will MedImmune's Financial Performance Ever Justify Its Stock Price?

With a market cap of $8.4 billion, or 30 times sales, MedImmune (MEDI Quote) is riding a wave of investor enthusiasm over last year's rollout of Synagis, a treatment for a serious respiratory disease in infants. Some analysts have called the drug one of the most successful launches ever in the biotech industry.

While there can be little dispute about the success of Synagis, there's plenty of dispute between the shorts and longs about how fast its sales will grow. (What else is new?) Analysts are expecting the drug, which accounts for most of MedImmune's revenue, to chug along at a growth rate of 40% this year and 30% next. MedImmune itself has done little to put the kibosh on such bullish forecasts. As recently as a week ago, at an investment conference, CFO David Mott reportedly said he was comfortable with analyst projections of $1.80 to $1.90 per share for next year (up from $1.05 for 1999). According to Dow Jones, during a breakout session, Mott even upped sales estimates for Synagis.

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