MedImmune's

(MEDI)

shares sank Thursday after the company swung to a loss in the latest fourth quarter and issued disappointing 2006 guidance.

On a GAAP basis, the Gaithersburg, Md., drug company lost $22.4 million, or 9 cents a share, on revenue of $492 million for the three months ended Dec. 31. For the same period in 2004, the company earned $50.5 million, or 8 cents a share, on revenue of $465.8 million.

MedImmune lost $16.6 million, or 7 cents a share, with revenue of $1.24 billion for the full year. In 2004, it lost $3.8 million, or 2 cents a share. Revenue was $1.14 billion.

This year, MedImmune says it should earn 40 cents to 45 cents a share and post revenue of $1.4 billion. The profit forecast excludes one-time items and the impact of stock-option expensing, which should amount to 12 cents a share on a pretax basis. The Thomson First Call estimate, excluding items, is for earnings of 46 cents a share and revenue of $1.39 billion.

MedImmune's stock lost $1.58, or 4.6%, to $32.90, on trading volume that was more than triple the daily average for the past three months. The stock fell as low as $31.81 intraday.

The company sells three products, the largest of which is Synagis for preventing a serious lung disease, caused by the respiratory synctial virus, in infants and young children. Synagis accounted for $1.06 billion in sales last year, up 9% from 2004.

The others are the nasal spray flu vaccine, FluMist, which had $21 million in sales last year, and Ethyol, a treatment for certain side effects caused by cancer chemotherapy and radiation. Ethyol had sales of $95 million last year.

FluMist turned in another meager performance. MedImmune, which had been expected to produce as many as 3 million doses, sold 1.3 million doses and donated 300,000 doses last year. Total sales last year were 56% less than in 2004.

"Fourth-quarter 2005 margins on FluMist were lower than the fourth quarter 2004 due to the write-off of unusable inventory," MedImmune said. The company sold 2 million doses and gave away 100,000 doses in 2004.

MedImmune is counting on a more convenient nasal spray flu vaccine called CAIV-T to replace FluMist. The company, which has submitted an application to the Food and Drug Administration, hopes the vaccine will be available in 2007.

"As previously indicated, we don't expect frozen FluMist to contribute meaningfully to revenue growth until we introduce the next generation of the vaccine, CAIV-T," said David M. Mott, MedImmune's chief executive.

Mott also hopes CAIV-T will be available to more people. FluMist is approved for healthy people between ages 5 and 49, thus excluding the most vulnerable customers. Although MedImmune has filed its CAIV-T application with the FDA for the same age group, Mott is seeking to treat younger people.

The company recently reported a late-stage clinical trial showing that CAIV-T was 55% more effective than traditional flu shots in preventing flu among children age 6 months to 59 months.

MedImmune records most of its sales and profit in the first and fourth quarters each year. The company said its fourth-quarter and full-year performances were affected by a big increase -- to $498 million from $399 million -- in marketing and administrative expenses. Additionally, R&D spending jumped to $383 million from $300 million.

The extra overhead was attributable to the company's repurchasing of all Synagis marketing rights in the U.S. from

Abbott

(ABT) - Get Report

, higher Synagis promotion expenses and expansion of its sales force. The company is conducting clinical trials on Numax, a successor to Synagis.