The FDA can be so cruel sometimes. Two weeks ago, AstraZeneca's (NYSE:AZN) investors were as happy as clams because an FDA advisory panel had just recommended that the company's latest acquisition, MedImmune (NASDAQ:MEDI), be able to expand labeling for its influenza vaccine, FluMist. On Friday, happy clams turned into sour grapes.
MedImmune reported that it had received a warning letter about compliance issues at its U.K. bulk manufacturing plant, and the supplemental biologics license application to expand the labeling was put on hold until the manufacturing issues are worked out. Because the issues involved an annual inspection at the plant in March, the Food and Drug Administration must have known that the warning letter was coming well in advance of the advisory panel's meeting -- cruel, indeed.
After giving investors the entire holiday weekend to fret about how bad the compliance issues would be, the FDA posted the warning letter on its website Tuesday. The problems stem from microbial contamination during production and cleaning at the facility. Because the vaccine is made from chicken eggs, a certain level of microbes are unavoidable, but MedImmune hasn't shown the FDA that it can stop the contamination from reaching unacceptable levels.
Chiron, now a unit of Novartis (NYSE:NVS), had similar contamination problems in 2004. Half of the U.S. supply of flu-season vaccinations was lost, which may be prompting the FDA to take a harder line with contamination issues.
MedImmune's problems don't appear to be as severe, and management believes it can take care of the issues without any delay in producing this year's vaccine. Investors should hope so; FluMist sales rose 71% last year to $36 million, and the expanded labeling for younger children should help MedImmune increase sales even further.
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Fool contributor Brian Orelli, Ph.D., washes his hands 20 times a day so he doesn't contaminate his experiments. He doesn't own shares of any companies mentioned in this article. The Fool's disclosure policy is as clean as a whistle.
