took Wall Street by surprise Thursday, saying its first-quarter revenue unexpectedly dropped from a year ago as sales of its main drug Synagis got off to a rocky start in 2006.
Revenue fell to $498 million from $510 million in the same quarter last year. Analysts had been anticipating that overall sales would actually increase to $540.3 million, according to Thomson Financial.
Shares of MedImmune were sinking after the report and lately shed $4.38, or 12.4%, to $30.96. About 12 million shares had changed hands, more than six times the daily average. The stock fell as low as $29.53 earlier in the session.
MedImmune earned $47 million, or 18 cents a share, including stock-based compensation costs. Excluding that expense, the Gaithersburg, Md., company earned 23 cents a share. Analysts had been expecting a profit of 27 cents.
Worldwide first-quarter sales of the respiratory drug Synagis were $463 million, down from $472 million a year ago. The company blamed the decline on the slower-than-expected start to the 2005-06 respiratory syncytial virus season, changes in payer guidelines and the lingering effects of hurricanes Rita and Katrina.
MedImmune expects "Synagis sales to resume a pattern of high single-digit growth rates in the second half of this year," said David Mott, the company's president and chief executive.
Respiratory syncytial virus is the primary cause of bronchiolitis, an inflammation in the lungs, and pneumonia in children younger than 1 year old, according to the Centers for Disease Control and Prevention. The first effects of the virus are usually fever, runny nose, a cough and sometimes wheezing, the CDC says.
First-quarter sales of the ovarian cancer drug Ethyol were $20 million, compared with $23 million last year, mainly because of competition from other cancer therapies, the company said.
Mott chose to look forward. "We have one of the most robust pipelines in the biotechnology industry," he said. "We expect this pipeline will deliver meaningful returns on our current investment in the 2007-to-2009 time frame."
MedImmune said that while it continues to make progress toward its goal of $2 billion in revenue and $2 in earnings per share in 2009, not including share-based compensation expenses, "our recent sales results have been disappointing."
Separately, the company said it signed a licensing agreement with privately held Elusys Therapeutics to develop and market new drugs for infectious diseases. According to the terms of the agreement, Elusys will receive an undisclosed upfront payment, milestone payments and royalties on future products.