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MedImmune Plant Has Problems

Still, shares are higher.

Investors in

MedImmune

(MEDI)

are shrugging off news that the federal government has detected problems with a plant that makes the nasal-spray flu vaccine FluMist.

MedImmune made the announcement on Friday after the market had closed, assuring investors that the findings by the Food and Drug Administration wouldn't affect the pending $15.6 billion takeover bid by

AstraZeneca

(AZN) - Get Report

.

On Tuesday, MedImmune's stock rose 39 cents to $57.75, just below the $58 a share

offer fromAstraZeneca. A tender offer for MedImmune is scheduled to expire at midnight May 31.

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The FDA's inspection raised questions about the MedImmune plant's quality control, record-keeping, disinfection efforts and prevention of contamination. Karen Lancaster, a company spokeswoman, said the FDA's review of the Liverpool, England, plant won't affect production of FluMist.

However, until the problems are fixed, the FDA won't act on MedImmune's application to expand FluMist's use to children between the ages of 12 months and 59 months who don't have a history of wheezing or asthma.

An FDA advisory panel supported the request two weeks ago. The FDA usually follows the recommendations of its outside advisers. FluMist is now prescribed for healthy people between the ages of 5 and 49.

When the FDA cites a company for manufacturing problems, the company can be blocked from selling drugs made at the plant until the matter is resolved.

Wyeth

(WYE)

recently faced this dilemma, but it

fixed the problems at a Puerto Rico plant before new products were scheduled to reach the market.

MedImmune said the FDA has approved a revised label for FluMist and post-marketing activities by the company to reflect the expanded use of the vaccine. MedImmune expects to produce 7 million doses for the upcoming U.S. flu season.

Makers of standard vaccines plan to provide up to 125 million doses for the U.S. market.